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Speaking to the Daily Mail in March, sources at the department for Communities and Local Government argued

Emperor Marcus Aurelius, Palazzo dei Conservatori, Rome. Photo: author’s own

that “there was really no need for councils who opt for an elected mayor to have a chief exec – because the mayor can take on the executive role and could deal with the directors of various government departments himself.”

Since then, most of England’s cities have rejected the government’s proposal for directly elected mayors, but what of the argument that elected mayors should take on the role of chief executive?

As I have argued before, while some councils will re-badge their senior officer, not many will experiment for long without a senior officer. The reasons for this are well argued in a new report by the Group of 30, an international grouping of central bankers and senior financiers. In their paper on governance of financial institutions they outline 10 tasks that well-functioning boards should discharge. Two in particular concern the role of the chief executive:

Appoint the CEO and gauge top talent in the firm, assuring that the CEO and top team possess the skills, values, attitudes, and energy essential to success. A very good CEO is preferable to a “star” CEO. The board must confirm the appointment of independent members of the executive team, including the chief risk officers (CROs) and head of internal audit, and should be consulted with respect to other very senior appointments. Boards should maintain a focus on talent development and succession planning, which are critical components of organizational stability.

Respect the distinction between the board’s responsibilities for direction setting, oversight, and control, and management’s responsibilities to run the business. It is misguided and dangerous to conflate the responsibilities of management with those of the board. The board’s primary responsibilities include: (a) reaching agreement on a strategy and risk appetite with management, (b) choosing a CEO capable of executing the strategy, (c) ensuring a high-quality leadership team is in place, (d) obtaining reasonable assurance of compliance with regulatory, legal, and ethical rules and guidelines and that appropriate and necessary risk control processes are in place, (e) ensuring all stakeholder interests are appropriately represented and considered, and (f) providing advice and support to management based on experience, expertise, and relationships.”

The Financial Times today reports on the woes to befall Jamie Dimon the chairman and chief executive of JP Morgan Chase and quotes Robert McCormick, chief policy officer of Glass Lewis & Co on the joint role “It is potentially insurmountable conflict. How can you oversee yourself?”

This idea of checks and balances is as essential in the corporate governance of democratic institutions as it is in financial institutions. Human beings are not omniscient creatures, we all require advice, cooperation and partnership to achieve all but the most simple of tasks. It is no dilution of democracy to recognise that political leaders also require others to achieve their goals. And of what value is it to be surrounded by people whose roles you think you can do better than them? JP Morgan Chase seems to be the latest to discover the myth of the emperor-like, all-powerful leader who acts without any real challenge to his authority. Without the cooperation of others who bring new capacity, knowledge and skill, leaders ultimately deny themselves any hope of success. Eric Pickles should listen to the bankers in the Group of 30 and stop encouraging mayors to go macho.

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A little over a year ago, I was called to a meeting with two senior civil servants, from two different government departments, to be briefed on the government’s public service reform white paper, Open Public Services. The aim of the paper was to present a new angle on the government’s strategic agenda. Yes, there was austerity, yes there would be cuts, but the white paper would present the positive case for reform, joining up the change agendas in health, police, schools and local government. It was explained that, at the next election, the government wanted to be able to say more than it had cut the deficit. It also wanted to be able to articulate its underlying strategy and achievements in public service reform.

 


However, the white paper, as then drafted, never saw the light of day. It was caught up in inter-governmental disagreement, partly between Conservatives and Liberal Democrats, partly between departmental interests, and partly between those who believed in harder or softer policy. In the end the paper was re-written several times and, although accompanied by a strongly worded article by the Prime Minister in the Telegraph, it was eventually launched to a bit of a shrug of the shoulders from public service chief executives. Everyone could see its pro-market  rhetoric, but what impact would the words on the page actually have in the real world of services designed or commissioned? It was written as if market forces didn’t already exist in great swathes of public services and yet had little to say about how more would be done in this direction.  Furthermore, perhaps because it was read as a post-hoc attempt to make sense of existing (and much harder-edged) policy commitments in health, police, schools and local government, it had nothing like the bite of those departmental drivers.

Interestingly, therefore, Ben Brogan at the Telegraph has an update today saying that “Downing Street is starting all over again on public service reform.”

I agree with Fraser Nelson who says this is “depressing,” but it is not surprising. The white paper was always a bit of a badge, stuck on to create the impression of change, but running the risk of over-promising what the government had no idea how to deliver.

Grant Shapps is out to make a name for himself and he knows that one of the easiest ways to do that is to tear up a few paper tigers.  Controversy and a bit of tough-guy knockabout where no one really gets hurt is, of course, classic Punch and Judy

Punch and Judy by Phillie Cssablanca http://www.flickr.com/photos/philliecasablanca/5669454111/ CC

politics. This is probably how best to understand the comments reported on the MJ’s localgov.co.uk site yesterday that the Housing Minister is calling on “all public bodies to cease funding SOLACE”.

My ex-colleagues in SOLACE will react to this kind of play with their usual dignity. They know there is nothing in it for them to take on a national politician. After all, Mr Shapps is simply exercising his right to make political capital at the expense of hard-working public servants. Mr Shapps is neither the first nor the worst offender.

However, before we let him off with the usual shake of the head, let’s just see what Mr Shapps’s objection is. He is quoted as saying “I fail to see the business case for the public funding a body that has acted as a broker for local authority chief executives helping to bump up their pay as they move from council to council.

There is an urgent need to rein in excessive chief exec pay packets and exercise some restraint, which is why I am calling on all public bodies to cease funding SOLACE.”

So, just a quick fact check ….

1. Do public bodies fund SOLACE? No, they do not. A number of local authorities and public bodies certainly pay SOLACE for services, but none give funding, in the sense that Shapps suggests. SOLACE. As is well known in local government circles, most of SOLACE’s income comes from commercial arrangements with private and voluntary sector bodies who want to tap into SOLACE’s policy expertise. SOLACE has been working with private and voluntary sector suppliers for years in a way which is strikingly in line with government policy indeed ….

2. Is SOLACE responsible for excessive chief executive pay? Hardly! This part of Mr Shapps comment will have raised a hearty laugh in the offices of SOLACE Towers. What Mr Shapps seems to mean here is that the activities in the recruitment market of SOLACE’s trading arm, SOLACE Enterprises, have been used (clandestinely, or conspiratorially, perhaps?!) to push up levels of senior pay.  I must say that for someone who worked there for many years, and indeed for anyone who knows anything about SOLACE Enterprises, this will be an amusing idea. SOLACE Enterprises is quite simply a small player in a highly competitive market for recruitment consultants dominated by the big private sector specialists such as Veredus, Gatenby Sanderson and Odgers. The suggestion that tiny SOLACE Enterprises has influenced this market does not stand a moment’s scrutiny.

Mr Shapps is, of course, entitled to his moment of August Punch and Judy publicity. In fact, I secretly welcome his comments because it allows me to to introduce my new tag of Punch and Judy localism, and its up-market cousin, ironic localism, a term that will undoubtedly recur in the future posts …..

Thanks to Phillie Casablanca for the picture under CC

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