Business Experts on Public Sector Boards: What Do They Contribute?

Abstract

Although public management reforms around the world have given business experts an enhanced role in the governance of public sector organizations, the impact of this change is poorly understood. Drawing from the literature on board human capital as a theoretical framework and focusing on the case of hospital boards in the English National Health Service, this concern is addressed by investigating whether increasing the presence of individuals with business expertise has any significant relationship with organizational performance. The findings show that while business expertise appears to have no influence on service quality, it does have a positive effect on financial performance. However, this only applies to governing boards that are less experienced in terms of their collective tenure. The findings lend partial support to board capital theory but also show that in certain conditions generic business expertise can be a valuable asset for public sector organizations.

The impact of management consultants on public service efficiency

“…As such, higher outcome values of the RCI correspond to lower levels of organisational efficiency. In this way, the RCI gives an indication of both process and allocative efficiency, capturing invested resources and activities performed in the delivery of front-line services (Kirkpatrick, Vallascas and Veronesi, 2017b;Marini, Miraldo, Jacobs and Goddard, 2008).…”

Are Public Sector Managers a “Bureaucratic Burden”? The Case of English Public Hospitals

“…Here, it would be useful to investigate the impact of managers focusing on their ability, motivation and opportunity (Appelbaum, 2000). Concerning ability, the distinctive human capital of (some) managers may directly contribute to improved resource allocation (Kirkpatrick, Vallascas and Veronesi, 2017b) or better planning and 'internal synchronization' (Van Helden and Huijben, 2014). The motivation of managers to focus on the organisational performance goals may also be significant, especially when coupled with incentive policies such as performance related pay (Weibel et al, 2009).…”

Understanding self‐regulation for political control and policymaking: Effects of governance mechanisms on accountability

“…In the context of personnel governance mechanisms, the composition of the board and the appointment of directors is a key topic for political control of SOEs (Flinders, 2009; Kirkpatrick et al, 2017; Leixnering, Meyer, & Polzer, 2020; Schillemans & Bovens, 2019). The directors supervise and advise the EDs—responsible for the day‐to‐day management—and are involved in decisions of fundamental importance and decisive accountability issues.…”

“…For an additionally understanding of the effects of self‐regulation it is theoretically rewarding to consider potential interaction effects with board composition (Kirkpatrick et al, 2017; OECD, 2015). Since the directors on SOE boards are expected to oversee the political goal achievement and ensure compliance with accountability rules, they might influence the effects of self‐regulation.…”

“…Therefore, political control is not solely a choice between appointing/removing politicians as directors in the board, but rather a decision of the public authority/government to equip the board with the right mix of appropriate individuals that ensure the realization of political goals. A related and strongly discussed issue in the governance debate is appointing civil servants to SOE boards additionally or instead of politicians (Kirkpatrick et al, 2017; OECD, 2015; Whincop, 2016). The rationality of civil servants in public administration often is to avoid rule violations for which they could be blamed.…”