Rob Whiteman's presentation to CIPFA Brussels and the Federation of European Accountants (Fédération des Experts Comptables Européens) on 31 October 2013

1. cipfa.org.uk
Improving Public Sector Governance
International guidance developments
Rob Whiteman
CEO CIPFA

2. cipfa.org.uk
Governance in context
 We have all seen the recent wide reaching and devastating
consequences of poor governance
 Even as crisis subsides huge global risks and downsides
 We all need to tackle the on-going ramifications of the crisis
 But CIPFA sees that future challenges are just as great:
 Population growth
 Continued stratification of society & growing inequality
 Natural resource scarcity
 Continued globalisation & interconnectedness
 Technological advances & cyber expansion

3. cipfa.org.uk
Governance in context
cont..
 Good governance is at the heart of tackling these challenges
and ensuring they become opportunities
 Recent Oxford Martin Commission for Future Generations
says in its report: Now for the Long Term:
 “We need governance to ensure that resources are well-managed, growth
is sustainable and that poverty can be reduced.”
 We cannot be short sighted or fight yesterday’s battles
 We need to be more attentive to the future, planning and
building the right structures to ensure our collective success.
 If we get the foundations right now, we can use the
opportunities presented to us and mitigate the risks.

4. cipfa.org.uk
CIPFA’s work on Good Governance
 CIPFA is working in the UK and internationally to build better
governance in the public sector.
 In the UK we work with SOLACE to produce Delivering Good
Governance in Local Government: Framework
 Internationally since 2011 CIPFA & IFAC have been working
on an international frame work for good governance.
 The CIPFA/IFAC public consultation on our International
Good Governance in the Public Sector document closed for
comments in September.
 We are aiming to finalise and bring forward a final version of
our Good Governance Principles for the Public Sector in the
new year.

5. cipfa.org.uk
Public sector governance:
Supporting UK guidance
 Our work internationally comes from our foundations of ongoing work on governance in the UK for example:
 The Good Governance Standard for Public Services
(CIPFA/Office for Public Management (OPM)) (2004)
 Delivering Good Governance in Local Government:
Framework (CIPFA/SOLACE)
― Framework Addendum (2012)
― Guidance Note for English Authorities (2012 edition)
― Delivering Good Governance in Local Government:
Guidance Note for Police (2012)
 CIPFA Board Governance Essentials

6. cipfa.org.uk
CIPFA/IFAC project overview:
 An International Framework for Good Governance in the
Public Sector
 Builds on previous work by both CIPFA and IFAC
 International Reference Group (IMF, OECD, World Bank)
 Founded on the work each organisation has done:
― CIPFA Whole System Approach to Public Financial
Management
― Integrated Reporting <IR> Framework
 Underwent an initial (limited) consultation to guide
development

7. cipfa.org.uk
Public Financial Management:
CIPFA Whole System Approach
Outcomes
Sustainable social benefit
Delivery of services and products
Institutional
Framework
Public Financial
Management
Governance
Demand for services and projects
Stakeholder consultation
www.cipfa.org/Policy-and-Guidance/Reports/Whole-System-Approach-Volume-1
Enablers

8. cipfa.org.uk
<IR> Framework: Value creation process
Source: IIRC (2013) Consultation draft of the international <IR> framework

9. cipfa.org.uk
Governance: Initial working definition
The arrangements necessary to ensure that the intended
outcomes for citizens, service users, and other public sector
stakeholders, are delivered in a transparent and accountable
manner that is efficient, effective, ethical, and sustainable.
Plus six principles of good governance

10. cipfa.org.uk
Support for initial consultation proposals
• International principles-based public sector governance
framework (15 of 17 respondents)
• Framework and principles should be relevant at both
entity and whole system levels ( 14 of 16 respondents)
• Proposed governance definition as starting point but:
― Clarify ‘arrangements necessary’
― Discuss ‘ethical’ in more detail
― Emphasise accountability and social outcomes
• Framework should address:
― Nature and composition of the governing body
― Integrating sustainability

11. cipfa.org.uk
Governance: Revised definition
The arrangements put in place to ensure that the
intended outcomes are defined and delivered
• ‘Arrangements’ include:
― Political
― Economic
― Social environmental
― Administrative
― Legal

12. cipfa.org.uk
Governing body: Definition
The person(s) or group with primary responsibility
for overseeing the strategic direction and
accountability of the entity
•
Applicable to different structures:
― Separate legislature and executive
― Different executive and non-executive structures
― All levels – use of term ‘entity’

13. cipfa.org.uk
The Public Interest: Definition
The net benefits derived for, and procedural rigor employed on
behalf of, all society in relation to any action, decision or policy.
•
Key factors:
― Independence
― Competence
― Adherence to due process
― Participation
― Transparency
― Accountability

14. cipfa.org.uk
Framework structure and approach
•
Two overarching principles required for acting in the
public interest
•
Five additional principles
•
Sub-principles plus supporting commentary
•
Examples
•
Assessment questions
•
Further reading

15. cipfa.org.uk
Good Governance
in the Public
Services:
International
Framework

16. cipfa.org.uk
Acting in the Public Interest requires:
A. Strong commitment to integrity, ethical values, and the
rule of law; and
B. Openness and comprehensive stakeholder engagement

17. cipfa.org.uk
Achieving good governance in the
public sector also requires:
C. Defining outcomes in terms of sustainable economic,
social, and environmental benefits
D. Determining the interventions necessary to optimise the
achievement of intended outcomes
E. Developing the capacity of the entity, including the
capability of its leadership and the individuals within it
F. Managing risks and performance through robust internal
control and strong public financial management
G. Implementing good practices in transparency and
reporting to deliver effective accountability

18. cipfa.org.uk
The next stage
• Revised framework put out to full public consultation
which ended September 2013.
• Generally responses have been largely supportive and
have had some positive comments:
The Framework and its ...principles are comprehensive, well thought
through and thoroughly elaborated; the examples and evaluation questions
are well selected (FEE)
• CIPFA & IFAC are analysing the comments we’ve
received and are looking to issue final guidance in
Spring 2014.
• This will of course lead to the eventual revision of UK
guidance as well.