Explaining governance failure: accountability spaces in-between and bias

Abstract

The paper is based on a two-year participant observer study of the governance failures in a UK housing association that experienced significant adverse performance resulting in its near collapse. Concerned with the accountability of boards of directors, the study extends research by Roberts (1991Roberts ( , 1996Roberts ( , 2001) who distinguishes between formal and informal forms of accountability, and Collier (2005) who identifies accountability spaces in-between where governance may be lost. The present research builds on this discussion by introducing socio-psychological factors underlying a reluctance of boards to adequately explore governance issues hidden in these spaces. As informal reporting systems are increasingly important drivers of the control role of boards (Parker, 2008), the paper emphasizes the need for boards to adopt procedures aimed at mitigating the effects of bias on the quality of board decision-making.Keywords: Quasi-public sector; governance; accountability; boardroom decisionmaking; bias mitigation; new public management;. 2 IntroductionThe paper explores limitations of formal, accounting-based systems of accountability and inadequacies of informal, sense-making narrative systems (Roberts, 1991(Roberts, , 1996(Roberts, , 2001Collier, 2005). The sense-making narrative terminology builds on the contrast made by Roberts (1991) between a formal, hierarchical system of accountability based on calculative accounting, and an informal, socialising form, which in boardroom discussions increasingly replaces the focus on the technical and rulebased (Parker, 2008). Hidden between the two systems, Collier (2005) identifies accountability spaces in-between where neither the formal nor the informal ensures that issues important to the organization are sufficiently explored and where governance can be neglected and lost. The present research inquires into sociopsychological causes for the reluctance of boards to investigate these spaces. The paper suggests that cognitive bias in judgment frequently inhibits an adequate articulation and exploration of issues critical to the governance of organizations, thereby undermining the value of the narrative form of accountability (Langevoort, 2001a,b;Prentice, 2003;Bazerman and Malhotra, 2006;Forbes and Watson, 2010;FRC, 2011; APB, 2012).With the rise of New Public Management (NPM) and the subsequent increase in the use of performance measurement in the quasi-public sector (Collier, 2005;Bogt and Scapens, 2012), a discussion on bias in the boardroom provides useful insights on potential problems and dysfunctional consequences of the adoption of this model in the public sector (see, e.g., Hood, 2007;McLean et al., 2007;Broadbent and Guthrie, 2008;Lapsley, 2008). New Public Management, although changing over time and from country to country, stresses the use of explicit quantitative performance 3 measures and external audits, output controls, and private sector management methods to advance public sector performance and accountability (Hood, 1995(Hood, ,...

Accountability Performance Public Service: Community Based Organization Solution for Base Public Service

“…CBOs have a limited number of memberships, so the learning process is easier. Members of this group are very easily influenced to accept new ideas [11]. Community-based organizations (CBOs) define as organizations that provide social services at the local level.…”