If you sit on the Board of a regulator, congratulations! You are probably overworked, under-compensated, little appreciated and not understood. After all, regulatory Boards are strange creatures. Whilst they often look like Boards of corporate entities, their remit isn’t to increase profits but to reduce harm. In a company, profit is easily measured and seen. In a regulator, however, harm reduction is often difficult to measure, and almost always invisible. On the contrary, in a regulator it is harm, not harm reduction that is visible. The media don’t report that no one got Salmonella poisoning today. But when there is an outbreak you can be assured it will be front page news, and your regulator will be on the hot seat.
I have been a senior leader in a regulator, reported to a Board as a CEO and worked with many regulatory CEOs, Chairs and Board members, so I have a broad perspective on the challenges of managing and leading teams, particularly regulatory teams. I’ve learned the hard way that not many people understand regulatory practice or regulation. This can include ministers who appoint regulatory Board Chairs and members, and sometimes even those Chairs and members themselves. If you have been a Board member for any length of time this probably isn’t a surprise to you.
For that reason it would be quite handy to have a standard regulatory Board member induction program. Unlike corporate Boards and even most not-for-profit Boards, where one’s outside experience is sufficient to perform the role, regulatory Boards also require expertise not found outside the regulatory ecosystem. So if you come from industry or government or have a legal background, how are you supposed to lead your regulator?
This year I had the chance to work with Better Regulation Victoria (BRV) to host a workshop with regulatory Chairs with the aim of discussing and sharing regulatory approaches to support improved practice. BRV has already published a Towards Best practice guide and supporting document for boards (well worth a look by the way), and the workshop was another step to put a greater focus on the role of regulatory board members and the importance of induction and support programs for regulator Board members.
At the time of writing this, there are almost 60 government regulatory agencies in Victoria and half of them have Boards. The workshop I conducted comprised Chairs from fifteen regulators, good people, with good experience trying to lead good regulators.
Here’s my takeaways from that discussion.
COMMUNICATION
Board Chairs need to have regular, scheduled briefings with the Minister to avoid a crisis mentality. This needs to be a trusted relationship with no surprises, which provides advanced warning of issues and upcoming risks, with mitigation strategies. It is important to share good news stories and focus on the prevention of harms that your regulator achieves.
There needs to be a close relationship between the Board and the CEO to know when to bring the CEO or other regulatory staff to Ministerial briefings. When possible you should also include department staff in briefings to pick up on the shared issues, especially in areas where roles or obligations are unclear. Ministerial advisors should also be included when possible.
Board members should respect and engage with Ministerial staff, who are the gatekeepers, and seek their feedback on complex issues. Bring as many people as you can on the journey of what it means to be the regulator and minimise harm. Invite the Minister or their staff to events and ceremonies. Make it real for them. Let them see the stakeholders and dutyholders as people and not just numbers on a report. Don’t let the Minister’s busy schedule discourage you.
Try to sensibly influence any Statement of Expectations (SoE) applied to you – if that’s the model you have in your jurisdiction, especially during periods of change. Outside of your legislation, it’s the signpost for what you are expected to do and should reflect an aspiration for reducing harms and moving towards greater maturity in regulatory practices.
ROLE
It is important as a Board member to understand your ability to manage the issues brought before you. Are you qualified to comment on them? Should outside experts be brought in for support?
It is important to step back from issues that you are passionate about and ask if this is a key issue for the Minister, the regulator, the public and other stakeholders, or just for you? Continually remind yourself of your desired regulatory outcomes, why your regulator exists, the harms you care about and the priorities in your strategic plan.
It is important to understand the limitations and capacity of management to cope with the Board’s expectations. Are you asking too much of them? If so, are there ways to increase their capacity or review your SoE?
It is important for leadership to understand the public’s expectations. Do you have a plan for managing these?
CULTURE
Ask yourself the following questions to determine your board culture. If you cannot answer in the affirmative, explore ways to improve your culture:
Is regulatory culture on the Board’s agenda? And not just Board culture, but culture across the regulator? Is culture built into your strategic planning?
Do you acknowledge that organisational culture is heavily influenced by the Board’s lead and that it needs to be consciously signaled?
Is your culture one of learning rather than fear? Is there a clarity of risk appetite and an associated risk plan?
Do leaders get out and speak to teams? Are leaders seen?
Are co-regulators, key partners and critical stakeholders invited to present at Board meetings?
Are you clear when you appoint people to operational regulatory roles – are they the right people with the right set of skills?
Is there continuity between Boards? Are there protocols for handling the transition of new board members, Chairs or deputy Chairs?
Are Board members encouraged to understand other members positions before meetings begin in order to support a productive discussion?
If someone finds a Pandora’s box, does your culture encourage and empower them to open it?
PEER NETWORK
The peer network for corporate Boards is generally other Boards. But the role of a regulator is unique and, as we’ve discussed, there is not the same commonality between serving on a corporate Board and serving on a regulatory Board.
Your true peer network, therefore, is other regulatory Boards. This might seem counterintuitive at first, because regulators deal with such a wide range of issues. What does the Game Management Authority have to do with the Architects Registration Board or the health and safety regulator?
But there is a shared base of values and professionalism that inform the role and responsibilities of the regulator and a significant amount of commonality in terms of the challenges and issues they face. And even understanding the differences helps to better understand your own Board’s functions.
So reach out to other regulators, especially small regulators, to help improve your communication, your culture and to strengthen your practice to solve complex compliance challenges and reduce harm.
The community need good regulators and regulators with boards, need good regulatory boards.
