#SupremeCourtJudgment was a “board evaluation” of the Cabinet

Para20

The full Judgment of The Supreme Court concerning the Prorogation of Parliament was, effectively, “a board evaluation” of the Cabinet.

Can you recall the top seven decisions your management or main board took last year? Imagine if 11 experts in corporate governance and best practice leadership behaviour were to sit in judgment on the most important of those decisions? How sure would you be of a judgment “in your favour”?

The Supreme Court Judgment contains a paragraph – Para 20 – which refers to the Minutes of a Cabinet meeting held by conference call on Wednesday 28 August 2019 shortly after the Queen was advised by the Prime Minister to prorogue Parliament.

CXOs/NEDs on management and main boards keen on learning from the decision-making processes of others may find Para 20 in particular, and the entire Judgment in general, of particular interest especially since Cabinet Minutes are usually not published for 30 years.

Para 20 states: “The Prime Minister explained that it was important that they were “brought up to speed” on the decisions which had been taken”.

This implies that the Cabinet was not up to speed and therefore presumably had not entirely or fulsomely contributed, as a Cabinet, to the decision by the Prime Minister to advise the Queen to prorogue Parliament.

Amber Rudd who resigned from the Cabinet, and the Whip, not long after the decision said that “Cabinet ministers had also not been shown legal advice to the prime minister about his decision to prorogue” (BBC News website).

Para 20 continues: “In discussion at the Cabinet meeting, among points made was that “any messaging should emphasise that the plan for a Queen’s Speech was not intended to reduce parliamentary scrutiny or minimise Parliament’s opportunity to make clear its views on Brexit….Any suggestion that the Government was using this as a tactic to frustrate Parliament should be rebutted”.

This means that the Cabinet took a decision on “messaging ” concerning a decision to which it had not fully contributed.

Is this familiar? Have you sat in management and main board meetings and been brought up to speed on decisions already taken and then discussed how these should be “socialised”? I have. Many clients have too.

So what?

The point is that in business and government there has been a falling off in recent years in honouring the role and purpose of formal meetings and in following good corporate governance practice and behaviour in reducing the risk of boards and governments taking poor decisions.

In the Chilcot Report into the invasion of Iraq, the then Prime Minister was criticised for what has become known as his “sofa” style government “which meant that the Prime Minister did not face ‘frank and informed debate and challenge’ over his actions.

The House of Commons Report into the collapse of Carillion states that the “system of internal and external checks and balances are supposed to prevent board failures of the degree evident in Carillion. These all failed…The company’s non-executive directors failed to scrutinise or challenge reckless executives.”

Carillion’s directors would surely have preferred that the company had not collapsed; the then Prime Minister would have preferred the Iraq outcome to have been different, and the current Prime Minister would surely have prefered not to have to been dragged back to Parliament by The Supreme Court.

Since even small changes in decision-making behaviour might have altered those outcomes why is that those leaders and many of the CXOs and NEDs you know, and I encounter in my practice, don’t appear to be sufficiently incentivised by the risks created by their conduct to avoid unilateral decision-making?

The answer lies in their belief that they will achieve better outcomes faster if they hog all the power. Conversely, they believe that if they yield power to others or discussions, that “things” will get “bogged down”.

It boils down to a lack of trust.

In my work, I facilitate members of management and main boards to take risks in trusting each other by yielding power through formal processes and then experiencing, over time, how that trust can pay off in reduced risk events and higher chances of exploiting opportunities that are frequently missed by that lack of trust.

When people on boards for whom distrust is a default mode try out trusting each other, just a little, they connect with a capacity to take better collective decisions and more creative risks in the service of a shared purpose.

Considering the impact on your organisation of your decision-making processes, would your management and or main board survive such a judgement process? Be honest, if only with yourself.

Ciarán Fenton

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