Does Mrs May’s Cabinet decision-making processes reflect a wider malaise in UK corporate governance?

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“The cabinet has not discussed, let alone agreed, precisely what kind of relationship with the EU the UK should be seeking” writes James Forsyth in The Spectator (2 Dec) and he made the same point at a panel discussion on a review of 2017 and a preview of 2018 hosted by DLA Piper in London recently.
During the Q&A session at that event I asked him, from the floor, if he agreed that the decision-making reforms recommended in The Chilcot Report after the Iraq war have not been implemented in Cabinet.

Chilcot called out the negative role “sofa” decision-making processes played in Mr Blair’s approach.

Mrs May doesn’t use a sofa, we hear, but neither does she appear to make full use of the boardroom either. But to be fair to Mrs May, is she not doing what many Chairs and CEOs do “up and down” the country: that is to pay scant attention to the Noddy basics of good corporate governance?

These basics include a) meeting regularly b) a democratic agenda and open discussion including welcoming and hearing contrary opinions c) a decision which everyone backs, and if they can’t they must resign.

How many boards do you know that come anywhere near that standard? Few, I assume. And yet we expect our politicians to behave in a manner we eschew.

Whether in the Cabinet Room or The Board Room the cost of ignoring basic corporate governance is potentially catastrophic.
The Iraq example is well documented, and when historians come to write the story of Brexit – or if, as some believe, a public enquiry into the manner in which the Referendum was conducted – I suspect that the decision-making processes in Cabinet will become a subject of scrutiny.

For example, and whether you voted Leave or Remain, I’m sure you would have expected a) a meeting of the Cabinet to come to a shared view on the future relationship with the EU b) a decision on how to address the DUP and Dublin issues and an agreement with those parties c) and these steps would have been taken shortly after the Referendum because the equivalent of a corporate risk register would have flagged those issues then.

Please let me know if you can think of any part of those basic expectations that are unreasonable. If you can, I can’t.

When I put this to James Forsyth he made the reasonable point that the Cabinet is so large that folding chairs are required to supplement the basic set. No danger of a comfy sofa, then?

But surely this problem is resolved by doing what most businesses do which is to have a Main Board and an Operating Board or ExCo for day-to-day matters, where the bigger number can be represented by a COO.

But even if the Cabinet operated an OpsBoard or ExCo system it wouldn’t make any difference if they continue to ignore corporate governance basics?

And why don’t Prime Ministers, CEOs and Chairs follow the rules? Is it because they feel that such rules restrict their power? Or is it because they fear being voted down?

The answer isn’t as obvious as it may appear because, apart from the psychopathic leaders, most have high enough IQ if not EQ to value input from others. Big egos don’t do corporate governance is an answer, but a superficial one.

The deeper truth is that they fear confrontation, are unable to negotiate needs productively, and deeply distrust the world outside their own framing of it.

What if by some magic Mrs May woke up tomorrow and suddenly realised that what she desperately wants but is clearly not securing could be secured by holding proper meetings, would she hold them?

I believe she would. But such magic doesn’t exist in government. However, in the business world you don’t need sorcery to run good meetings, just a modicum of trust.

 

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