About editor2

This author has not yet filled in any details.
So far editor2 has created 3 blog entries.
20 May, 2019

Blog: OECD Report shows that Ireland needs to improve Regulatory Performance

2019-05-20T09:58:41+01:00May 20th, 2019|News|Comments Off on Blog: OECD Report shows that Ireland needs to improve Regulatory Performance

There is scope for Ireland to improve its regulatory performance according to statistics produced recently by the OECD. The statistics are contained in the recently published ‘Better Regulation Practices across the European Union, 2019’. This report was prepared by the OECD at the invitation of the European Union  http://www.oecd.org/publications/better-regulation-practices-across-the-european-union-9789264311732-en.htm

 

Why improve Regulation Policies?

Laws and regulations affect the daily lives of businesses and citizens. High-quality laws promote national welfare and growth, while badly designed laws hinder growth, harm the environment and put the health of citizens at risk. The introduction to the OECD Report points out that  – “... Countries need to strengthen their regulatory processes and the institutions involved. At a time of fiscal stringency and heightened global uncertainty, regulatory policy remains a key government tool for ensuring the safety and well-being of citizens while stimulating innovation and economic growth and prosperity , Despite some improvements much work remains to be done to reap the rewards of better regulation”. http://www.oecd.org/publications/better-regulation-practices-across-the-european-union-9789264311732-en.htm

 

The OECD’s Scoring System

The OECD uses three main indicators to measure regulatory performance:-

  • An indicator on Regulatory Impact Assessment (RIA);
  • An indicator on Stakeholder Engagement and
  • An indicator on Ex-post Evaluation, i.e. reviewing performance.

In turn, each of these indicators has four components:

  • Methodology: how good or bad is the methodology used for RIAs;
  • Oversight: If there is an oversight body, how effective is it;
  • Adoption: How consistently are RIAs undertaken, and
  • Transparency: To what extent are results of RIAs made publicly available.

The maximum score for each component is one and the maximum score for each aggregate indicator is four. A perfect country could score twelve points i.e. three times four. No such score has ever been recorded by any Member State.

 

Ireland’s Performance for RIAs

Table 1 reproduces the OECD scores, for 2014 and 2017, for Ireland’s performance of in the area of Regulatory Impact Assessment (RIA). The overall results show Ireland achieving a “good pass”, but not an “honours” result in both years. It is interesting to note that where Ireland achieved an aggregate result of 2.09 in 2017, the European. Union achieved an aggregate result of 3.28. Put differently, Ireland only achieved 64 per cent of the EU result in 2017.

Table 1: IRELAND - Regulatory Impact Analysis for Primary Laws
Category Year 2014 Year 2017 Change
Methodology 0.72 0.73 0.01
Oversight 0.19 0.15 -0.04
Adoption 0.80 0.80 0.00
Transparency 0.41 0.41 0.00
Aggregate 2.12 2.09 -0.03
Note: Maximum score of 1 for each category and
maximum score of 4 for the aggregate of four categories

 

Ireland’s Performance under Stakeholder Engagement

Engaging with those concerned and affected by regulations is fundamental if the quality of regulations is to be improved. OECD now produces statistics on stakeholder engagement. Table 2 reproduces OECD scores for Ireland on stakeholder engagement in 2014 and 2017. The results are quite disappointing. Where Ireland achieved an aggregate result of 1.7 in 2017, the European. Union achieved an aggregate result of 3.41. Put differently, Ireland only achieved half of the EU result for stakeholder engagement in 2017.

 

Table 2: IRELAND - Stakeholder Engagement for Primary Laws
Category Year 2014 Year 2017 Change
Methodology 0.44 0.44 0.00
Oversight 0.00 0.25 0.25
Adoption 0.62 0.62 0.00
Transparency 0.31 0.39 0.08
Aggregate 1.37 1.70 0.33
Note: Maximum score of 1 for each category and
maximum score of 4 for the aggregate of four categories

 

Ireland’s Performance under Ex-post Evaluation

Only after laws have entered into force can governments assess their full effects on society. Conditions change over time and even regulations can become outdated. Accordingly, the OECD advises countries to regularly review their stock of existing regulations. For its part, the OECD measures the extent to which countries carry out ex-post evaluations. Table 3 reproduces OECD scores for Ireland for ex-post evaluations in 2014 and 2017. The aggregate results are extremely low, with some components actually recording zero results.  Where Ireland achieved an aggregate result of 0.79 in 2017, the European. Union achieved an aggregate result of 3.08. Put differently, Ireland only achieved a quarter of the EU result for stakeholder engagement in 2017

 

 

Table 3: IRELAND - Ex-post Evaluation for Primary Laws
Category Year 2014 Year 2017 Change
Methodology 0.00 0.00 0.00
Oversight 0.00 0.17 0.17
Adoption 0.43 0.49 0.06
Transparency 0.13 0.13 0.00
Aggregate 0.56 0.79 0.23
Note: Maximum score of 1 for each category and maximum score of 4 for the aggregate of four categories

 

Scope for improvement

There is certainly scope for Ireland to improve its regulatory performance if Ireland’s scores, as published by the OECD, are accepted as reflecting actual performance. In the text accompanying the statistics, the OECD notes that – “ Ireland recently made some improvements to its regulatory policy system, particularly in the areas of consultation and ex post evaluation”. However, it suggests that - “ In order to more effectively monitor and assess the quality of RIA implementation, Ireland should consider establishing a central oversight body”. This suggestion of having an oversight body was also made recently by The Law Reform Commission – see my blog https://www.pai.ie/is-there-a-need-for-a-regulatory-guidance-office/ . While the advent of a robust oversight body would be helpful, it would be only one of a number of things that needs to be done to improve regulatory performance across the public sector. The overall objective should be one of designing, developing and delivering good regulatory policies for all citizens.

 

Tom Ferris is a Consultant Economist specialising in Better Regulation. He lectures on a number of PAI courses and contributes blogs regularly to PAI. He was formerly the Senior Economist at the Department of Transport.

 

Tom Ferris

2 May, 2019

Blog: Corporate Governance in Sport

2019-05-02T16:05:44+01:00May 2nd, 2019|News|Comments Off on Blog: Corporate Governance in Sport

With major concerns being raised in relation to corporate governance arrangements within the FAI and Scouting Ireland and previously in other voluntary sporting organisations, it is timely for sports Clubs generally to be reviewing their own governance arrangements in line with best practice, but, in addition, do the public at large need higher levels of assurance in relation to compliance with the law generally.

Sports Clubs fall into various legal categories.

Some are companies limited by guarantee regulated by the Companies Registration Office, with the ODCE overseeing compliance. Others are charities regulated by the Charities Regulator and ensures compliance in that sector. Most sports clubs are, however, registered clubs with the District Court, under the Registration of Clubs (Ireland) Act,1904 which introduces very minimum governance requirements. For the purpose of obtaining sports grants and other State funding, sports clubs are obliged to hold tax exempt status from Revenue which imposes certain governance requirements in relation to disposal assets or surpluses in the event of wind up, but many clubs do not fall into this category.

We traditionally think of corporate governance arrangements in terms of prudent financial management and compliance with companies act obligations, but there are broader obligations in which compliance must be assured to be taken into account in sport e.g. in the areas of health and safety and the safeguarding of children.

Available at www.goverancecode.ie is a Governance Code which is a resource to assist community, voluntary and charity (CVC) organisations develop their overall capacity in terms of how they run their organisation. It a voluntary code provided free to all boards/committees/ executives of not-for-profit groups to encourage them to check themselves against best practice in the management of their affairs.

Given the dependence of Clubs on voluntary donations and State funds, is it time for NGBs in sport to be critically reviewing governance arrangements within member clubs and requiring them to have annual/ biennial compliance audits in respect of all their statutory obligations undertaken by an external body, in the interest of members and all stakeholders. The same applies to registered clubs generally and is the Registration of Clubs(Ireland) Act 1904 in need of updating?

In short, perhaps is it now time for all community, sporting and voluntary groups to have an external review undertaken of their all their governance arrangements and obligations on an annual/biennial, with external support.

 

By: Andrew Cullen, Corporate Governance Consultant, PAI.

Andrew Cullen is course leader on PAI’s Certificate in Public Sector Corporate Governance.

Andrew is a former Assistant Secretary in the Civil Service, where his career focused mainly on corporate governance and regulation in the transport, energy and telecommunications sectors, and strategy and investment in the public transport sector. He has extensive experience in dealing with State bodies and with the EU and international bodies, including serving for a period in Brussels with the Department of Foreign Affairs.

 

24 Apr, 2019

The Code of Practice for the Governance of State Bodies should be immediately amended…

2019-04-24T13:38:54+01:00April 24th, 2019|News|Comments Off on The Code of Practice for the Governance of State Bodies should be immediately amended…

I hope to address this challenging topic at the forthcoming PAI Governance Conference in May. Herewith are a few of the issues I’ll be raising. Comments or counterviews will be warmly welcomed.

The SDGs

Along with 192 other countries, Ireland signed up to the UN 2030 Agenda in 2015. That Agenda is comprised of 17 Sustainable Development Goals (SDGs) and their 169 targets. From the outset, the UN declared that the SDGs could not be achieved without the business community being actively involved on a global scale. Its Global Compact (UNGC) division was appointed to develop the guidelines and roadmaps that would encourage businesses to engage and report their progress on an annual basis up to 2030. To-date over 12,000 companies from 160 countries have enrolled including a modest 13 from Ireland. The question arising is:

Why has Irish business not yet bought into the SDGs and the transformative sustainability revolution currently underway across the commercial world?

The Business Perspective

I conducted a recent round-table discussion on this question among a group of my business clients to determine board member interest in SDGs as change of this nature must be led from the boardroom. The following comments summarise the exchange:

  • “What are SDGs?
  • “That’s overwhelming – that’s for governments not business”.
  • “In Ireland, over 90% of businesses are SMEs. Our priority is survival. The last thing we need are another 169 compliance obligations”.
  • SDGs - CSR - KPIs – GRIs – IAEG – ESG - UNGC – EUNFR - TCFD – it’s bewildering.
  • “I don’t hear anything from government about SDGs. I hear energy, carbon and climate change but not SDGs”.
  • “That’s too big an agenda for SMEs – government agencies must take the lead”.
  • “State bodies are not adopting their own SDGs – I see no example being set there”.
  • “The State Body Governance Code does not even mention SDGs”.
  • “Large corporates are very active in this space through the CSR Forum”.
  • We’d have an interest but on a scale we could manage – we’d need help”

The State Body Perspective

I came away from this round-table with the impression that State bodies are perceived to be giving mixed signals to the business community on SDGs. The fact that the Governance Code, which defines how State boards should run their organisations, doesn’t mention SDGs is testimony to that. Initiatives like the SDG Stakeholder Forum are great but all State bodies should be leading by example. Every State body should then be partnering with business groups within their jurisdictions to establish sectoral SDG Networks. The message is clear, all State boards should show leadership in rallying businesses behind the SDGs with particular focus on SMEs. I concluded that the starting point was an SDG addendum to the Code of Practice for the Governance of State Bodies that would give immediate effect to these actions.

The Governance Code

The recent revision of the Code was published in 2016, one year after the signing of the UN 2030 Agenda. There is a lot of noise being correctly made by the DCCAE and its agencies on climate change but the SDGs go much wider than that to cover economic, social and environmental topics. Yet there is potential SDG alignment in the current Code where, in the introduction to Section 8, it defines good governance in these terms…

“Good governance… requires effective arrangements for defining outcomes in terms of sustainable economic, social, and environmental benefits which should be included in the State body’s oversight agreement with their relevant Minister/parent Department”.

So, emerging thinking suggests that the starting point to showing leadership on SDGs is to build on the above principle and insert an immediate addendum to the Code that would encourage State boards to both:

  • adopt SDGs relevant to their own State Body and annually report outcomes
  • partner with businesses to form Sectoral SDG Networks sharing common targets.

Might that be a runner I wonder?

 

 

By: Alan McDonnell, Founder & Principal Good Governance Solutions

 

To book your place on PAI's upcoming Corporate Governance Conference click here.