Probation Board for Northern Ireland:

CORPORATEGOVERNANCE

October 2006

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Probation Board for Northern Ireland:

CORPORATEGOVERNANCE

Report of an inspection in Autumn, 2005

Presented to the Houses of Parliament by the Secretaryof State for Northern Ireland under Section 49 (2) of theJustice (Northern Ireland) Act 2002.

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List of abbreviations iv

Chief Inspector’s Foreword v

Executive Summary vii

Recommendations ix

Chapter 1: Introduction 3

Chapter 2: Progress in relation to the Strategic Review 51 PBNI governance 62 Disclosure and information 83 Corporate and business planning 94 Financial planning, budgeting and expenditure authorisation 95 PBNI internal organisation 106 Resourcing and the relationship between PBNI and the NIO 11

Chapter 3: Beyond the Strategic Review 137 Context 138 Positive findings 139 Concerns 1410 Conclusion 15

Appendix 1: Methodology 18

Contents

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List of abbreviations

PBNI Probation Board for Northern Ireland

NIO Northern Ireland Office

CJB Criminal Justice Board

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This was the first inspection that CJI had undertaken into the corporate governance of acriminal justice organisation in Northern Ireland. We decided to initiate it as a follow up tothe Deloitte MCS Strategic Review of PBNI, which reported in April 2004 and which led tothe most recent developments in the organisation’s corporate governance framework.

The inspection made some significant findings, which have since been followed up by theBoard. There were real problems in the management style of the organisation, resulting indissatisfaction among both staff and Board members. In an exception to CJI’s usual practice,publication of the report has been delayed to give the Board time to reflect upon therecommendations. CJI will re-visit PBNI in 2007 to examine progress.

The inspection team, led by Tom McGonigle and myself, appreciated the frankness andgenerous level of co-operation received from Board members and managers whocontributed to the inspection. Particular thanks are due to the Chairman and ChiefExecutive, and to Graham Kelly, who acted as a contact point. CJI received access to allpeople and material that were requested for the inspection.They were without exceptionopen and welcoming of the inspectors.

Kit ChiversChief Inspector of Criminal Justice in Northern Ireland

Chief Inspector’s Foreword

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Executive Summary

The inspection found that PBNI could demonstrate the appropriate procedures, structuresand accountability mechanisms that would be expected of a medium size public body with astaff of 280 and a £15.3m budget. These included clear roles and reporting lines for Boardmembers and staff, appropriate interfaces with government, relevant policies, processes forconducting Board and management business, and a range of internal and external scrutinyarrangements. Registers for risks, complaints, disciplinary actions and grievances were held,with supporting documentation.

The meetings of the Board and its subcommittees that were observed showed a processwhich was working smoothly. PBNI demonstrated openness by providing ready access forinspectors to sensitive material and views in the course of this inspection.The organisationhad benefited from the 2004 Strategic Review, and had implemented many positiverecommendations to strengthen its functioning.

There were nevertheless areas of serious concern within PBNI, some of which had already become evident from a Staff Survey in 2005. The survey revealed a high level ofunhappiness among staff, which was confirmed in interviews with Inspectors. There wasalso dissatisfaction expressed by Board members.

The inspection identified a need for a more positive, open and empowering managementculture in the organisation. The proper role of the Board vis à vis the executivemanagement of PBNI needed debate and clarification. Several members felt that the Board was not being properly utilised, while staff reported a need for clearer direction from the Board.

Inspectors repeated the Strategic Review recommendations that were relevant to corporategovernance and had not yet been achieved, while suggesting that one Strategic Reviewrecommendation should be ignored. There are recommendations, too, about considerationof the Board’s future, the Northern Ireland Office’s role in relation to PBNI, a requirementfor updated legislation, development of a more critical approach to self-reporting againstobjectives, and greater clarity around risks and the outcomes of complaints.

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Recommendations

All the recommendations in this report that are accepted should be included in an ActionPlan, jointly developed and managed by PBNI and the NIO. Inspectors recognise that therewill need to be a phased timetable for introduction of changes, as some will be morereadily achievable than others. CJI will wish to review progress in 2007.

We restate Strategic Review recommendations that are relevant to corporate governancewhere their “Achieved” status is not yet complete, and recommend that one of the StrategicReview’s recommendations not be pursued.

The following recommendations have been made:

• Board and committee minutes should show explicit outcomes, with the responsibleperson and dates for achievement included and timescales for action specified.Paragraph 1.5.

• The External Complaints Register should explicitly record the outcomes of complaints.Paragraph 2.4.

• The Chief Officers and Board Chair should take the lead on PBNI’s objective setting andreporting and policy formulation with a view to the process becoming morecomprehensive, accurate and accountable. Paragraph 3.3.

• PBNI should conduct formal exit interviews with all leavers and should extend this toBoard members when they leave. Paragraph 3.4.

• The NIO should take steps to improve its ability to handle its sponsorshipresponsibilities in a professional and expeditious way. Paragraph 6.4.

• The NIO should introduce updated legislation to reflect PBNI’s current functions at thenext opportunity. Paragraph 6.5.

• There is a need for more open communication between the Chairman, Board membersand the Chief Officers. Paragraph 9.2.

• Guided by the Board, the Chief Officers need to develop a more positive, open andempowering culture. Paragraph 10.2.

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Restated Recommendations from the Strategic Review

• R 9 – “The respective roles of PBNI and the Youth Justice Agency in relation to aspectsof juvenile justice services and youth conferencing should be clarified and communicated.The NIO should take a lead role in this process”;

• R 17 – “The Board should regularly review its training needs to ensure that memberscontinue to have training and support appropriate to their responsibilities”;

• R 29 – “The PBNI Board should have a clear and proactive strategic role in influencingthe use of community development grants and project funds, in accordance with relevant policy”;

• R 27 (and 41 and 42) – “The NIO should review the present delegated spending limitsfor PBNI in the context of a new Management Statement/Financial Memorandum”;

• Rs 32-34, 39 – These recommendations relate to aspects of PBNI’s internal organisationthat should be accorded priority to generate tangible outcomes, including workloadmanagement, career development opportunities, staff roles and salaries.

Strategic Review Recommendations not to be pursued

• R 13 – “The Chief Executive should become an executive member of the Board ….”

Inspection Report

PART 1

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The Treasury’s code of good practice on corporate governance, published in July 2005,defines corporate governance as:

“the way in which organisations are directed and controlled. It defines the distribution ofrights and responsibilities among the different stakeholders and participants in theorganisation, determines the rules and procedures for making decisions on corporateaffairs, including the process through which the organisation’s objectives are set, andprovides the means of attaining those objectives and monitoring performance”.

Accordingly CJI does not interpret corporate governance narrowly as financial checks andbalances, independent audit arrangements and so forth but more widely as the whole set ofarrangements for the good strategic management of the organisation. We sought in thisinspection to check that those arrangements were such in PBNI as to ensure not just thatthings did not go wrong, but that they positively supported good planning and performancemanagement.

CJI looked at the structures and functions of PBNI and its Board, and the relationshipsbetween the Board, the management, the staff and the sponsor department (the NIO) tosee that they were clear and fit for purpose. On the one hand the Board is sovereign, andmanagement must respond to any reasonable request it may make. On the other hand anon-executive Board has a responsibility to show restraint: not to involve itself in executivematters but to confine itself to its proper functions of setting the strategic direction andholding the management to account. We also sought evidence that the actions andbehaviours of the Board and senior managers were constructive and cooperative, workingin the best interests of the public to deliver policy outcomes.

It is important to make clear how terms are used in this report.“ The Board” refers to all the members of the Board, including the Chairman; and likewise “managers” or“management” refers to managers up to and including the Chief Officers.The “leadership”of the organisation refers to the top management and the Board.

Introduction:What is Corporate Governance?

CHAPTER 1:

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The inspection took as its starting pointthe recommendations of the April 2004Strategic Review of PBNI which broadlyrelate to corporate governance.TheStrategic Review made a total of 48recommendations, which were overseen bya joint PBNI/NIO implementation group.The group decided its work was completedby May 2005, at which stage the declaredstatus of the recommendations was:

Achieved 25

Actioned 5

Ongoing 13

Beyond scope of the Project Board 2

Rejected 3

Inspectors felt some of these hardlymerited the status of a formalrecommendation in the first place e.g.Recommendation 1:“PBNI should continueto focus on excellence in servicedelivery….”; or Recommendation 40:“NIO and PBNI should continue to investin building confidence in their relationship”.There were triplicate recommendations(27, 41 and 42) around the same issue

of developing a new ManagementStatement and Financial Memorandum.Recommendation 2, which related to PBNI and the NIO taking action onstakeholder feedback, was very wide-ranging, and should represent ongoing work for any organisation.

Concern was expressed to inspectors that some of the recommendationsdeclared as “Achieved” were far fromcompletely fulfilled. Some would have beenmore accurately reflected as “Actioned”,e.g. in relation to Recommendation 9,which stated that the NIO should take alead role in clarifying respective roles ofPBNI and the Youth Justice Agency inrelation to juvenile justice services.Theoutcome of this process was reported asfar from clear, and whatever may have been“achieved” had not been communicated tomany managers and Board members.

On the following pages we outline progresson specific areas of recommendationsrelevant to corporate governance withinthe Strategic Review.

The Strategic Review and progresson its recommendations

CHAPTER 2:

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Chairman and Deputy Chair are exofficio members of all Committees,with the exception that the Chairmanis not a member of the AuditCommittee. The Board andsubcommittees normally meet on asix-weekly cycle, except the AuditCommittee which meets quarterly.The subcommittees had clear terms ofreference and reporting arrangements.Their membership and chairmanshipwere determined by the BoardChairman in consultation withmembers, taking account of members’interests, experience and availability.The Board will need to review itscommittee arrangements if itsmembership is reduced to 12.

1.3 In relation to Recommendation 17 ofthe Strategic Review, Board memberssuggested they had had no trainingopportunities recently. Subsequentdiscussions showed that members also wanted opportunities to learnmore about the day to day work ofofficers working in the front line.We reiterate Recommendation 17,which states that the Board shouldregularly review its training needs to ensure that members continue to have training and supportappropriate to their responsibilities.Board members in turn need to availthemselves of training opportunitieswhen they are provided: they have notalways done so.

1.4 In CJI’s opinion the Strategic ReviewRecommendation 31 for a revisedBoard Secretary/compliance functionhaving shared reporting lines to theChief Executive and Chairman was notappropriate.The Board Secretary, as amember of staff, should report to theChief Executive but be placed by the

1 PBNI governance

1.1 PBNI’s Board currently comprisesfifteen members, all appointed underNolan principles, having applied inresponse to public advertisement. Assuggested in the Strategic Review, theprocess of reducing the size of PBNI’sBoard had been ongoing, and the boardhad reduced from 18 members to 15 during the previous year throughnatural wastage. Furthermore sevenmembers’ terms of office are due toexpire at 30th November 2006. Someof the subcommittees seemed undulylarge, especially when the Chair andDeputy Chair attended ex officio.Inspectors endorse Recommendation11 of the Review and suggest that theBoard should comprise not more than12 members from 1 December 2006.

1.2 The Board subcommittee system was changed in February 2005. Thenew Chairman wanted to provide astronger focus on human resourceissues and on policy development; hebelieved that the Board should have aRemuneration Committee to deal with pay and performance at the toplevel; and he wanted to increase theopportunity for Board memberinvolvement in the work of theorganisation. There were previouslythree subcommittees, and this wasincreased to four: Audit – 4 members;Human Resources – 8 members; Policyand Practice – 7 members; Finance,Emergency and Remuneration – 7members. The Finance, Emergency andRemuneration Committee comprisesthe Chairman and Deputy Chair, theChairs of the other Committees andtwo other members with experienceon remuneration committees.The

Chief Executive at the disposal of the Chairman and Board, and theChairman should be consulted inpreparing his regular appraisals.

1.5 As recommended in the StrategicReview, circulation of subcommitteeminutes to all Board members hadcommenced.While minutes were feltto be well recorded by the Secretariat,issues were sometimes reportedly leftsomewhat vague, and there could be alack of clarity about what preciselyneeded to be done by whom. Werecommend that Board minutesshould have explicit outcomesrecorded, with names ofresponsible owners for eachaction attached and timescalesfor action specified.

1.6 The Criminal Justice Review raised thepossibility of probation services beingprovided by a next steps agency withinNIO. There are sharply divided viewson whether this would be a sensiblestep and about whether the futureprovision of probation services canproperly be determined withoutincluding the future of other parts ofthe criminal justice system, includingprisons and youth justice. The decisionhas been taken to leave considerationof this matter to be explored afterdevolution of responsibility forcriminal justice.

1.7 In the meantime, the Board is to becommended for initiating its owndebate about what value it adds andhow it can further improve its business performance. In addition,it is welcome that the Board haslaunched a process to explore how its contribution to the criminal justiceprocess might be increased. This

process involves a number of, whathave been called, blue skies seminarsthat will examine the facts about thelevels of crime, the effectiveness ofpresent interventions, the lessons tobe learnt from best practiceelsewhere, and the further measuresthat might be appropriate and mightform an agenda for a devolvedadministration with law and orderresponsibilities. It is the intention tomanage this process in a manner thatenables wide participation by thosekeen to make a constructive input.We recommend that PBNIshould be encouraged to developits analysis of the value that theBoard adds and to promoteserious discussion about its futurerole and contribution to criminaljustice.

1.8 CJI’s view differs from that of theconsultants who undertook theStrategic Review in relation toRecommendation 13 which stated thatthe Chief Executive should become amember of the Board. Inspectors donot agree that it would be appropriatefor a Chief Executive to become amember of their own board, either on the grounds outlined (due toAccounting Officer status, and toenhance influence at the CriminalJustice Board) or for any other reason,in a medium sized public organisation.We suggest Recommendation 13 ofthe Strategic Review should not bepursued.

1.9 Some Strategic Reviewrecommendations, such as theProfessional Staff RemunerationReview and the Estate Review, hadbeen completed in practice though notin spirit, insofar as they had not yet

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delivered any tangible outcomes. It isin the nature of such matters that theyare complex. However the length oftime which might be necessary tocomplete the estate development wasa major source of frustration for bothstaff and Board members.They hadanticipated a shorter timetable inresponse to this, their third estatereview in five years. Many Boardmembers were genuinely sympathetictowards staff, and frustrated by theirinability to progress positive changemore promptly. It was thereforeencouraging to learn that the way hasbeen cleared for PBNI to initiateconsultation on its preferred optionunder the Estates Review, though thetimetable for action to achieve realand much-needed improvements inaccommodation remains uncertain.

2 Disclosure and information

2.1 There were five Strategic Reviewrecommendations in this section, andthey were reported as achieved.Theydealt with management informationand risk management.

2.2 In the course of this inspectioninspectors viewed PBNI’s Internal andExternal Complaints Registers,Disciplinary Register, Risk Register, aswell as a sample of accompanying files.

2.3 The Internal Complaints Registerrecorded twenty-seven complaints andgrievances that were lodged during2000-2005, plus two that predated2000. It was a clearly recordedregister.

2.4 The External Complaints Registerlisted thirty-one cases which wereinitiated during 2000-2005, plus sixthat predated 2000. It was less clearthan the Internal Register, in thatoutcomes were not always clearlyidentified as “Upheld” or “NotUpheld”, e.g.“Closed” or “Letter sent”did not represent complaint outcomes.We recommend that the ExternalComplaints Register shouldexplicitly record the outcomes of complaints.

2.5 Six complaint files and one grievancefile were viewed.All were typed,contained detailed supporting material,with comprehensive analyses andreflected a fair approach.Theoutcomes suggested that PBNI waskeen to learn from its complaintsprocess.

2.6 Within the 2005-06 Risk Registerthere was no clear distinction betweencorporate and practice risks.There did not seem to be a rationale for the types or levels of risk that wereincluded, and those that appeared wereinterspersed with Key PerformanceIndicators: we could not understandthe reason for this.The riskregistration process still needed tobecome more embedded in PBNI, andthe Register was a limited documentwhich should be more comprehensive.We reiterate Recommendation 20 of theStrategic Review, which states that PBNIshould include broader considerationswithin its Risk Register.

2.7 While the Risk Register may have been a limited document, PBNI’smanagement of arson attacks on two of their premises during civil

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disturbances in 2005 provided anexample of good learning about riskmanagement. Managers and supportstaff worked hard to reinstate locally-based services as quickly as possible.This situation heightened awareness of the need for backup of electronicinformation and contingency planning.

3 Corporate and businessplanning

3.1 As recommended in the StrategicReview, PBNI had made good progresson reducing the size and complexity ofits corporate plan, and moving it ontoa rolling basis, with annual revisions.The organisation’s consultationprocesses concerning its future planswere thorough, and were open tocommunity feedback through publicevents. Inspectors regarded this as anexample of good practice.

3.2 Some interviewees were concernedabout a move towards the use of veryshort, simple policies, which passedthrough the internal consultationprocess quickly. The problem was thatthese policies did not have attached tothem the detailed procedures whichstaff needed to deliver the detail.It was suggested that Board members did not possess the background tochallenge such matters effectively –this placed them in an uncomfortable“rubber-stamping” position which didnot add value. Likewise executive staffquestioned the Board’s understandingof statistical and performance data thatwere provided in monitoring reports.Formulation of professional policiescould be an area of training for Boardmembers.

3.3 Inspectors were told of deficiencies inrelation to the 2004-05 annual report,relating to some objectives whichwere said to be poorly written, andmanagers reporting loosely on theirperformance against their objectives.It was felt that there was not thenecessary ‘challenge culture’ to identifyfailure to achieve objectives frankly andhonestly. Members complained thatthey had not been given sufficient timeto comment on important documents.We recommend that the ChiefOfficers and Board Chair lead on PBNI’s objective setting andreporting, and policy formulationwith a view to the processbecoming more comprehensive,accurate and accountable.

3.4 The Board had identified that staff whowere leaving the organisation were notoffered exit interviews. Exit interviewsprovide an important source of humanresource information, especially attimes of difficulty. We recommendthat PBNI should conduct formalexit interviews with all leavers,and should extend this to Boardmembers when they leave.

4 Financial planning, budgetingand expenditure authorisation

4.1 There had been variable progress inrelation to financial recommendations.The Board’s financial managementcapacity was felt to be much strongersince appointment of the Director ofCorporate Services. He provided clearguidance and reports that enhancedBoard members’ confidence in fulfillingtheir financial governance duties.

4.2 On the other hand PBNI still workedwithin the same delegated spendinglimits as it had at the time of theStrategic Review, and they werecontained within the sameManagement Statement. Developmentof the new Management Statement andFinancial Memorandum were cited asexamples of tardiness by the NIO,despite significant work by PBNImanagers, that caused frustration forstaff and Board members.

4.3 PBNI had developed a newCommunity Development Policy, whichaimed to standardise and clarify thecriteria for its £1.5m budget of grantaid to community groups. This wasconsidered important to remove anysuggestion of arbitrary access to, ordecision-making around, this budget.The policy was implemented in April2006. It is essential that the Board hasclearly stated objectives underpinningits expenditure in this area and thatthe arrangements for determining whatactivities should be supported aresoundly based and provide appropriatemeans of appeal for those who areunhappy with the decisions made inindividual cases.

5 PBNI internal organisation

5.1 In some ways PBNI’s internalorganisation could be considered thearea where greatest progress had beenmade since the Strategic Review.TheSenior Management Team had beensignificantly reshaped in accordancewith Strategic Reviewrecommendations.A CorporateServices Directorate, Planning andPolicy Development Directorate and

Compliance Unit had all beenestablished, and the Board Secretaryhad taken on the compliance function.Board members were unanimouslypositive about the benefits of having adedicated Corporate ServicesDirectorate, and advocatedappointment of professionally specificstaff to deliver non-probationfunctions. Following an OrganisationalDevelopment Workshop in April 2005there had been agreement on furtherstages in the change process, and aconsultancy contract had recentlybeen let for a three-year programmeof development intended to improvethe organisation’s corporate andoperational health.

5.2 However there was a feeling amongBoard members and operationalmanagers that development of the newdirectorates had to some extent comeat the expense of PBNI’s corebusiness.These views were in keepingwith the Staff Survey which reflectedlow morale amongst operational staff.While everyone accepted the need forbetter corporate services, operationalmanagers felt that the responsibilitythey held for the totality of the serviceprovided by PBNI was in danger ofbeing overlooked. There was a dangerof an ‘us and them’ attitude developingif the relationship was not carefullymanaged. Clear leadership was neededto ensure harmonious and seamlessdevelopment of the organisation.Recommendations 32-34 andRecommendation 39 of the StrategicReview are relevant to this issue: theystate that PBNI should deal withworkload management, careerdevelopment opportunities, staff rolesand salaries. We reinforce the importance

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of these recommendations and thepriority that PBNI and its sponsoringDepartment should give to achievingfaster progress in responding to them.

6 Resourcing and Relationshipbetween PBNI and NIO

6.1 The Strategic Reviewrecommendations about resourcinghad limited direct relevance tocorporate governance, although therewas no doubt that an efficient ITsystem would enhance communication,thereby promoting better governance.Inspectors were pleased to note thatIT had been prioritised and newsystems were now being introduced.Redeployment of staff had also beeninitiated as recommended, and optionsremained under review.

6.2 Formal governance arrangementsbetween PBNI and the NIO weredescribed in a Framework Documentwhich set out the accountabilitymechanisms that applied to a NonDepartmental Public Body (reportingto Secretary of State and Parliament;publishing an annual report; auditarrangements; role of Chief Executiveas Accounting Officer etc). QuarterlyOverview Meetings between seniormanagers and NIO officials werescheduled to discuss PBNIperformance and provide feedback toMinisters.

6.3 We were told that the workingrelationship between PBNI and theNIO had improved significantly inrecent years. However therecommendations in this section of theStrategic Review reflected a need for

further improvement. Some in PBNIhad a perception that they weremarginalised by their independentstatus in comparison to other criminaljustice organisations, but inspectorsfound no evidence to confirm that.TheChief Executive had become a fullmember of the Criminal Justice Boardand had the same opportunity toinfluence policy as any other AgencyHead. However, Board membersexpressed concern about the absenceof regular feedback from the ChiefExecutive’s participation in theCriminal Justice Board and the lack ofopportunities to discuss the positionthat the Chief Executive should take atthe CJB when matters concerningprobation were being discussed. TheChief Executive recognised the needfor better communication in this area.

6.4 There was a suggestion that the NIOcould do more to exercise a challengefunction in support of PBNI’scorporate governance. The NIO wasreported to be good at monitoring, butless effective at challenging practice orat progressing important issues. PBNI’smain concerns involved slippage ofimportant meetings for jointprogression of business. This wasreflected mostly as missedopportunities, but was also reportedas seriously detrimental on occasions.For example, it was suggested that ifthe nature of the Youth Justice Agency’sproposed development andrecruitment had been identified by theNIO, then PBNI might have beenbetter able to position itself in relationto Northern Ireland’s new criminaljustice system. Subsequent loss of staffto new opportunities might then havebeen avoided, or at least reduced by

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being anticipated. We recommendthat the NIO take steps toimprove its ability to handle itssponsorship responsibilities in aprofessional and expeditious way.

6.5 A lower priority matter that jointlyinvolved PBNI and the NIO was the requirement to update PBNI’sunderpinning legislation, the ProbationBoard (Northern Ireland) Order 1982.It had become dated, e.g. by referringto a requirement to “Establish aCommunity Service Scheme” andprovide a “Welfare” function in prison. It was suggested that updatedlegislation should also reflect PBNI’s public protection role. Werecommend that the NIO shouldintroduce updated legislation toreflect PBNI’s current functionsat the next opportunity.

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Beyond the Strategic Review

CHAPTER 3:

Several other issues were raised in thecourse of interviews with Board membersand managers that impinged uponcorporate governance in a broad sense.

7 Context

7.1 Since his appointment in 2003 theChief Executive had been seeking toimplement a major change programmedesigned to strengthen the corporateand operational management of theorganisation. Particular attention hadbeen given to financial management,administrative systems and informationtechnology. This had had theunintended effect of causing someprofessional staff to feel that theirwork had been devalued in relation to the corporate and administrativefunctions, whereas in fact it continuedto be the core business of the PBNI. The Chief Executive had alsohad to implement a number ofrecommendations from the CriminalJustice Review.

7.2 The new Chairman, in his first year ofoffice, had sought to open up a wideranging debate at Board level and withsenior staff about whether PBNI was‘doing the right things’ and ‘doingthings right’. He had prompteddiscussion about governance issues, the

role of the Board and the value theBoard adds, and how PBNI couldincrease its contribution to the widercriminal justice effort. Following anawayday with the Board and seniormanagers the lead role for steering the overall change process had beengiven to the Finance Committee. Theprocess had moved forward graduallyand by the end of the inspectionprogress was being made on:

• introducing modern pay and rewardarrangements for the top threeposts;

• engaging consultants to assist inexploring how businessperformance can be improved; and

• Planning to run a blue skies seminarprogramme to assist in shapingPBNI’s future contribution to thecriminal justice process.

8 Positive findings

Positive findings from the inspection wereas follows:

• Board members welcomedopportunities to interact with staff,offenders and stakeholders, andtook advantage of local Boardevents for such meetings.

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• The Board and its officers werealert to the implications of widerissues within corporate governance,and developments within thecriminal justice system, such asdevelopment of the NationalOffender Management Service,and concurrent disbandment ofProbation Boards in England andWales.

• There was clear prioritisation and continuity of business fromsubcommittees to the full Board,enabling business to be efficientlyexpedited.

• There was an explicit process forBoard members declaring interests,both on the PBNI website, and asissues arose at Board or Committeemeetings.

• We were told by managers that the2004 Strategic Review had enabledBoard members to move to ahigher strategic plane.

• At the professional level PBNIinvested positive energy in selfregulation by internal monitoring.

• The Board normally responded to relevant Northern Irelandconsultations, and was keen to beviewed as a body that activelyengaged with relevant communityissues.

• The organisation achieved Investorsin People re-accreditation inNovember 2005.

9 Concerns

9.1 Not surprisingly, the change initiativesreferred to in paragraphs 7.1 and 7.2above had prompted some negativereactions, as change programmesalways do. But there were concernsamong both staff and Board members about the well-being of the organisation which went beyond what might have been expected.

9.2 Board members brought a wide rangeof experience in public life, includingservice on other boards, to thisposition. Nearly all of thoseinterviewed expressed misgivingsabout the corporate management ofPBNI. They acknowledged that theyhad perhaps been too slow to raisetheir concerns either at Boardmeetings or privately with theChairman or Chief Executive. Theytook the opportunity to express them to Inspectors independently ofone another. The fact that theseconcerns had not up till thenbeen properly articulated raisedquestions about the effectivenessof corporate governance in PBNIand pointed to the need for moreopen communication betweenBoard members, the Chairmanand the Chief Officers.

9.3 The September 2005 Staff Survey,which reflected a poor state oforganisational health, was referred toin almost every interview with Boardmembers and with staff.The fact that itwas the first staff survey since theBoard was established in 1982 and thatsome negative feedback was to beexpected could not fully explain the

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scale of the adverse results. Thenegative findings in the Staff Surveyabout the perceived managementculture were endorsed by many ofthose interviewed. Many werepessimistic about whether an adequateaction plan to address the issuesidentified in the Staff Survey would beimplemented (though an Action Planhad in fact been agreed by the timethe inspection was completed).

9.4 Inspectors were told that there hadbeen a tradition in PBNI of keeping the Board at arm’s length from themanagement and staff to an unusualextent. They were surprised to learn,for example, that minutes of theregular senior management meetingswere not automatically copied to theChairman. The Chief Executiveexplained that meetings of the seniormanagement team had previously beenregarded as ‘professional’ meetings, andit was only under the current ChiefExecutive that non-professional staffhad attended. The Chief Executive hasagreed that the Chairman shouldautomatically receive these minutesand all other relevant papers.

9.5 The Chief Executive told Inspectors he believed he was obliged to askBoard members to refrain frombecoming over-involved, due to hisresponsibility as Accounting Officer.It can be a difficult balance to strike,and Inspectors respect the ChiefExecutive’s position on this point.Nevertheless CJI would suggest thatthere could be more openness of theorganisation to its non-executiveBoard. Board members have much tooffer, and many staff said (as was

confirmed by the Staff Survey) thatthey would like to see more of them.This balance between the organisationbeing properly open to the Board,while members refrain frominappropriate interference inoperational matters, may be moreeasily achieved as the size of the Board decreases, compelling membersto concentrate on their primaryleadership and challenge roles, asdiscussed in the first part of thisreport.

9.6 Board members reported that theyhad limited opportunities to applyrelevant skills and experience, forexample, participating in interviewpanels, as this was viewed as too closeinvolvement. They were therefore notsurprised, but still disappointed, to beviewed as ‘remote’ in the Staff Survey.Inspectors, however, would not expectnon-executives to be involved inpanels for any but the most seniorappointments. The precise cut-offpoint is debatable, but Inspectorswould not normally expect Boardmembers to be involved in theinterviews for appointments below the top tier of management.

10 Conclusion

10.1 The Chief Officers face a considerablechallenge. The Chief Executivedescribed his role to inspectors asproviding leadership and strategicdirection and networking with externalstakeholders. This requires, as he said,an ability to drive forward a changeprogramme, work with a sponsoringgovernment department, stakeholders

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and demanding customers and earnthe respect of staff. The managementstyle and culture of the organisationare particularly the responsibility ofthe Chairman and the Chief Officers.The ability of the Chief Officers tounderstand and represent theorganisation’s business, demonstratecommitment and personalresponsibility, develop and share avision and value staff are all crucial.The Board has to satisfy itself that ithas in place corporate governancearrangements that will ensure over the next few years that:

• PBNI maximises its contribution tothe criminal justice effort;

• the organisation continues toimprove its business performance;

• the issues raised by the staff surveyare addressed;

• the relationships between NIO,other parts of the criminal justicesystem, the Board members andsenior managers work effectively;

• there is full and timely involvementby the Board in the determinationof strategy and policy; and

• the Board has confidence in thedelivery of its decisions by seniormanagement.

10.2 Above all, however, the Board needs toaddress the question raised by the StaffSurvey about the negative managementculture in the PBNI. Guided by theBoard, the Chief Officers need todevelop a more positive, open andempowering culture.

Appendix I – Methodology

PART 2

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1. Research and data collection

We were provided with a range of materialwhich constituted written evidence ofPBNI’s corporate governance, including:

• 2005-06 Risk Register, Complaints,Disciplinary and Grievance logs and asample of associated files;

• Board papers and minutes withdetailed agendas;

• Six month review of the Business Plan;

• Action Plan from the 2004 StrategicReview indicating progress againstrecommendations;

• Sub-committee minutes which fed intoa full-board meeting, enabling it to runefficiently, covering a wide agenda;

• Corporate and Business Plans, withAnnual Reports against these plans;

• Budgetary Control Reports for bothSMT and Board, and Internal AuditReports,

• Detailed Key Performance Measures,with associated statistical reports;

• Draft policies issued for consultation inMay 2005, and policies approved fromApril 2004 onwards;

• Individual team Business Plans, withobjectives regularly reviewed and fedinto reviews of central objectives;

• Senior Management Team andOperational Management Team minutes

which dealt with relevant issues suchas risk management, personnel,accommodation and professionalissues;

• Service Level Agreements with theNorthern Ireland Prison Service inrespect of Hydebank Wood YoungOffenders Centre and Prison, andMaghaberry and Magilligan Prisons;

• Sample contracts with voluntary sectorbodies which receive funding fromPBNI’s Community Developmentbudget;

• Equality Commission Progress Report2004-05;

• Staff Newsletters;

• Workforce Planning update report –August 2005;

• Investors in People Action Plan – July2005;

• European Foundation for QualityManagement progress report – undated;

• “Having your Say” – September 2005Staff Survey;

• JNCC meeting minutes – 6/05.

2. PBNI fieldwork

A team of four CJINI inspection staffconducted a programme of interviews with Board members and managers over a period of six weeks during October-November 2005.

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