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Sankar Radhakrishnan

For over a decade now, Mr Michael Gillibrand has been an observer of the good governance practices in India's private and public sectors. A former senior advisor to the Commonwealth Secretariat in London, he continues to be associated with the organisation as a consultant. Also a consultant to the UK's Department for International Development, he serves as an independent director in the UK and Ireland.

In Thiruvananthapuram recently to participate in a workshop on governance of public service providers and state-owned enterprises, Mr Michael Gillibrand spoke to Business Line on various aspects of governance in public services.

Edited-excerpts from the interview:

How would you define good governance, especially in public service agencies?

I think the simplest sound-bite is the one I was using, which originates from Prof Bob Tricker — ``good governance is doing the right thing and good management is doing things right''. It is the difference between the right things in ethical and functional terms as opposed to just being efficient... It is setting the direction of the organisation and making sure that you are operating according to ethical standards as well.

What do you believe are the key issues in governance?

Governance covers such a wide spectrum. I was emphasising (at a workshop on governance of public service providers and state-owned enterprises) about the difference between public and corporate governance, organisational and economic governance.

One of the key issues is to recognise this broad spectrum of governance. However, one of the problems I come across often is the narrow focus on one particular aspect of governance to the neglect of the others.

You have been visiting India, and South Asia, for the past decade or so. In this period, has the interest in governance risen in the region?

Yes, to a great extent. There has been quite a transformation, which indicates India's strengths vis-à-vis China and many other countries.

India was very concerned and confident about its democracy till it recognised that democracy is only a part of good governance. In jocular terms, people talk about `bureau-crazy' and `demo-crazy', which only indicate some of the inadequacies. Also, it is important to look at all the dimensions of governance — panchayat governance, community governance, the rule of law and its weaknesses.

One of India's strengths is its strong intuitive perception on the issues of governance. Where it lags is in transferring the intuitive perceptions to a more conceptual perception and management of the issues of governance. India has a lot to offer in this area. In the area of corporate governance, India has moved incredibly fast... Some of the highest standards of corporate governance were set in India.

Do you think Indian society has acknowledged that government agencies are public service providers and must adopt governance practices?

For long, I have been in India talking about the need for the Government to shift from being a service provider to a purchaser. And state enterprises, instead of providing and delivering services, should shift to becoming a purchaser, but procuring it on behalf of the Government.

This is a significant shift, whichI think has been well recognised in India. But I have not yet seen the change in philosophy. To effect this change, a political shift is needed. But, in practice, there have been some significant changes, particularly with the state enterprises. They have become much more efficient. However, the focus is on efficiency rather than restructuring the fundamental philosophy, which is more difficult.

As a country adopting governance in public service agencies, what are some of the best practices that India can implement?

One must take a look at the good codes of practice, which can be applied to public sector agencies. That is actually an extension of corporate governance practices.

Corporate governance codes and practices are well-established, including aspects such as corporate social responsibility. And those codes have led to a behavioural change in corporates. I think we could get a similar behavioural change in public service agencies through the mechanisms of codes. Codes are a means to an end. I am astonished at the changes in the UK which have been achieved through codes. Going back 10 years, people were not particularly interested in codes. Codes were for the private sector, not for `us guys' in the public agencies. There have been several changes in fact coming from the Cabinet Office in the UK.

What sort of performance indicators can India adopt to check if public agencies are implementing good governance practices?

What is most important is to obtain different types of indicators and make a distinction between strategic and operational performance indicators. The focus is often on the latter, which is micro management, because it is within the easy comfort zone of management.

Really important is to look at the strategic performance indicators, because that is testing the comfort zone of the managers and of the Government.

A look at an example that is critical for Kerala and other parts of India. We know that the fiscal deficit is really serious. Much of it is because of the subventions to state enterprises and public boards. So, if one of the criteria is that every board, agency, state enterprise has to micro manage the amount of borrowing, the amount of subvention they receive from the government and reduce that... that is a key performance indicator.

Once those are aggregated for all the state enterprises in Kerala and all the public boards, that will become a signal to the Chief Minister to look at the extent to which the public debt has been reduced.

Strategic indicators will take some years to come through. But by applying technology, you can drill down to performance indicators, which might lead us to seeing whether there are real changes in the quality of life.

How should India go about creating awareness on the need for governance in public service agencies?

This is precisely why the press has such a vital role to play. One of the problems we had in the UK relates to cronyism in all these boards. And it was the press which alerted that.

Simon Jenkins was a prominent journalist of The Times... He did a study and published an article demonstrating the extent to which cronyism was influencing appointments to boards. Without him, I think people would not take an interest. So the press has a vital role to play.

But, in addition, talking about governance, I am back to the role of civil society. Without a consumers' association — you have got a strong one here — without citizens' consumer groups, without shareholders' groups you will never get the discipline to down public walls...

There is a vital role for the customers to turn around and say ``we need to be in the driving seat''. For example, is there a complaints system in place? That is a vital monitoring key to whether you can improve performance and deliver.

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