Public Sector Corporate Governance Revisited: The ROI's Non-commercial Semi-State Sector

  • Deirdre Kelleher

Student thesis: Doctoral ThesisDoctor of Philosophy

Abstract

In May 2009, the Republic of Ireland’s (ROI) Code of Practice for the Governance of State Bodies came into effect. In addition to imposing further compliance and reporting obligations on the boards of the ROI’s statutory agencies, the Code more ciearly defined the role and responsibilities of board members.

A review of the national and international literature indicated that although the significance of boards was generally accepted, agreement as to the attributes that deliver and/or determine their effectiveness was lacking. Furthermore, it was observed that despite voluminous research on the boards of the private sector, there was a parallel lack of focus on the boards of the public sector. Premised, primarily on the ramifications of agency theory, with little evidence of any attempt to consolidate approaches to research, the extant literature was identified as fragmented and inconsistent. This issue was adjudged to be compounded in the ROI context, where public sector agentification was revealed as unique, particularly relative to its administrative culture and the limited span of control of its agencies, a sector which distinguishes between its commercial and non-commercial wings. This suggested that research into the ROI’s agencies and its governance was warranted.

The review further indicated that despite the considerable body of literature on codes of governance practice, few studies had systematically analysed the impact of codes on corporate structures or the behaviours of board directors and none had done so within a public sector framework.

Critics of mainstream governance research were observed to comment that an understanding of non-profit boards that was premised on the normative literature was far too simplistic. It was argued that as a consequence, nonprofit, and in particular public sector, governance was inadequately theorised, researched and understood.

In response, this thesis set out to explore whether a series of board demographic, board practice and board structure variables, identified in the public sector literature as determinants of board effectiveness, would be significant in the ROI’s Non-Commercial Semi State Bodies (NCSSBs). The research was undertaken to establish a baseline of data on the sector’s governance across a range of indicators. The study was carried out by means of a board governance questionnaire conducted amongst a purposeful sample of NCSSBs, consisting of 16 boards and 149 board members.

The empirical analysis of the hypotheses developed from the theoretical framework presented indicates mixed findings: where no relationships of significance between the board member demographics variables and board effectiveness are identified while, some evidence in support of statistically significant associations between certain of the board practice and board structure variables were revealed. Relative to the Code of Practice implementation indicators, the results suggest significant relationships between two of the three variables tested, namely board size and relationship with parent department, while no association was observed with the method of board member appointment variables. The findings for the descriptive analyses reveal some interesting results, key of which are indications that the sector’s board members emerge from a select coterie of Irish society and that board training and orientation uptake is at odds with participants reported governance awareness levels. The findings indicate that as only certain of the attributes of board effectiveness are manifest in the sample boards, their effectiveness will not be optimum as theorised by the relevant public sector literature. It is posited, that other factors unexplored by this research are at play which may present a basis for future research.

This study contributes to our understanding of public sector board effectiveness relative to research approaches that treat of board effectiveness from nuanced and context sensitive perspectives. It is anticipated that the results of this study will stimulate future research, which might explore, in particular, the anomalies revealed by this sample’s unique demographic profile.
Date of AwardJul 2016
Original languageEnglish
Awarding Institution
  • Queen's University Belfast
SupervisorShirley-Ann Hazlett (Supervisor) & Michael Mulreaney (Supervisor)

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