NI Water: CEO crunched by dual responsibilities?

By demand, here’s a chart explaining the different primary relationships within and between DRD and NI Water. The complexity was introduced by the introdcution of the designation “Sub Accounting Officer” for the CEO, Mr McKenzie. It may or may not make things clearer for those of you who still care.

This was on foot of a Treasury regulation which kicked in when the central ‘subsidy’ for Water Rates hit a certain level.

Although Lian Patterson, the deputy Perm Sec told the PAC this was to be for administrative purposes only, it seems in the latter stages of this story to have been used as a hard device by the department to override the independent scrutinising role of the Board of NI Water.

In the normal run of things, the Permanent Secretary only has indirect power to recommend the sacking and appointing of the Board but no direct ongoing relationship with them. However as Chief Accounting Officer, Mr Priestley appears to have required the Sub Accounting Officer , ie Mr McKenzie, to report directly to himself rather than to the board.

Here’s what John Simpson made of it:

The chairman, supported by the NEDs, believed that the CE had a first responsibility for governance in the board to bring critical issues to the board before reporting to the DRD.

Laurence McKenzie had and still holds a dual reporting responsibility created by Parliamentary rules. The interpretation of this governance requirement was disputed. [emphasis added]

Quite. Although we won’t know the full story of this until/if we get the detail, my own working assumption is that this hardened into a common or garden line management arrangement after the Board and the CEO fell into dispute over its three year PC10 (Price Control 2010) business plan.

Given that it is becoming obvious the IRT’s report had little to do with the sacking (since the board were not given sight of the internal review report before the IRT was in operation), there must have been some other reason for getting rid of the Board.

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  • Cynic

    Surely the relationship between the Chief Exec and the Board is defined in law – the Companies Acts – whereas the role of Accounting Officer is an administrative issue within the Civil Service. Normally Parliament trumps internal rules

  • joeCanuck

    Is that a typical set up in N.I. for “Crown Corporations”?
    My experience is that the CEO reports only to the Board and the Board Chairman reports to the Minister.

  • joeCanuck

    And as Cynic says (posts crossed) the Minister is responsible to Parliament (or Assembly as a lower institution).

  • William Markfelt

    Those of us who still care?

    Let’s face it: this story is much, much more important than all those other dopey bonfires/footballers stories that vex ‘journalists’ (copy and pasters from proper Englsih and Irish newspapers, if you work for the local rags) elsewhere.

    This story is central, core and vital to those of us who actually care about how NI is mis-rum, and what we might like to do to change that.

  • Mick, where do the Shareholder Unit (Gary Fair) and the Business Advisory Panel fit into this diagram?

  • William Markfelt

    What would be equally useful would be an overlay for this diagram. So far I think that the boxes required are:

    1. ‘Only spoke 2-3 times’

    2. ‘Had a conversation with a purpose with’

    3. ‘Needed the support of’

    4. ‘Gave support to’

    5. ‘Adopts overly matey tome with’

    6. ‘Rode roughshod over’

  • “CEO crunched by dual responsibilities?”

    or exploiting the opportunities presented by same – Aug 7 @ 8.52 am?

  • Cynic

    Sorry Joe, what I meant was that if there was a conflict in roles the statutory ones under the Companies Act take precedence.

  • Cynic

    Mick

    One further point.

    The Chief Executive is appointed by the Board. When Priestly appointed him sub accounting officer, did the Board approve that change to his role and T&Cs?

  • Cynic, the accounting officer role went with the CEO job yet apparently it didn’t appear in the job description. See Hillyard Strand 2 Report, sections 2.31 and 22.

  • magnus

    Two points off the top of my head .

    The relationships changed when the go co efectively became an NDPB. The Perm Sec is the AO, and the CX effectively has two bosses viz the Perm Sec and the Board. If push comes to shove (or the gloved iron fist is ungloved) the Perm Sec prevails as the golden rule is follow the money ie in its narrowest sense accountability for the monies voted for a particular purpose and hence this is the primary concern of NIAO and PAC.

    By the way this two headed beast is common here which is why there is a need for an independent review of governance. Incidentally on the radio yesterday the new chair spoke only of governance in terms of procurement procedures saying, and I paraphrase, that it was easy enough to sort out. What will not come under the spotlight is the relationship between the Department and the Board as the guy is effectively on an extended job interview. Get the procedures sorted, keep his nose clean and he has a nice little earner

    An extra diagrammatic brokenline might be added from the perm Sec to the Chair of the Board. No doubt the Perm Sec in accordance with OCPA? (the public appointments crowd) best practice? assesses the effectiveness of the chair on an annual basis but this is largely cosmetic unless presumably perceived needs dictate otherwise.

    I hasten to add the foregoing is largely conjecture and just Saturday morning wanderings.

  • Mick Fealty

    Cynic Nevin,

    IIRC, ithe shift in the Go-Co’s status came in in October 08. The appointment of McK as accounting officer was considered sometime after he had been interviewed, and was relayed to him in his second day in the job.

    The IRT report says the Board did not like it, and registered their concerns that it could muddy the clarity in feedback systems, and the very confusion that John Simpson notes in his BelTel review of the problem.

  • William Markfelt

    Sometimes we think we have a monopoly of inept and corrupt politicians who, in a parallel universe, would be more aptly employed breaking rocks in the hot sun. (‘We fought for peace and the…corrupt won’, as The Bobby Fuller Four might have sung in a parallel universe). So it’s heartening to hear of a Senator attempting to belittle a US General (on their equivalent of Undemocartic Live, CSPAN?) and receive the following reply from a US pilot, in the form of a letter.

    http://www.snopes.com/politics/soapbox/boxer.asp

    Letter sent to Sen. Barbara Boxer from an Alaskan Airlines pilot below. Many of us witnessed the arrogance of Barbara Boxer on June 18, 2009 as she admonished Brigadier General Michael Walsh because he addressed her as “ma’am” and not “Senator” before a Senate hearing.

    This letter is from a National Guard aviator and Captain for Alaska Airlines named Jim Hill.

    Babs:

    You were so right on when you scolded the General on TV for using the term, “ma’am,” instead of “Senator”. After all, in the military, “ma’am” is a term of respect when addressing a female of superior rank or position. The General was totally wrong. You are not a person of superior rank or position. You are a member of one of the world’s most corrupt organizations, the U.S. Senate, equaled only by the U.S. House of Representatives.

    Congress is a cesspool of liars, thieves, inside traders, traitors, drunks (one who killed a staffer, yet is still revered), criminals, and other low level swine who, as individuals (not all, but many), will do anything to enhance their lives, fortunes and power, all at the expense of the People of the United States and its Constitution, in order to be continually re-elected. Many Democrats even want American troops killed by releasing photographs. How many of you could honestly say, “We pledge our lives, our fortunes and our sacred honor”? None? One? Two?

    Your reaction to the General shows several things. First is your abysmal ignorance of all things military. Your treatment of the General shows you to be an elitist of the worst kind. When the General entered the military (as most of us who served) he wrote the government a blank check, offering his life to protect your corpulent derriere, now safely and comfortably ensconced in a 20 thousand dollar leather chair, paid for by the General ‘s taxes. You repaid him for this by humiliating him in front of millions.

    Second is your puerile character, lack of sophistication, and arrogance, which borders on the hubristic. This display of brattish behavior shows you to be a virago, termagant, harridan, nag, scold or shrew, unfit for your position, regardless of the support of the unwashed, uneducated masses who have made California into the laughing stock of the nation.

    What I am writing, are the same thoughts countless millions of Americans have toward Congress, but who lack the energy, ability or time to convey them. Regardless of their thoughts, most realize that politicians are pretty much the same, and will vote for the one who will bring home the most bacon, even if they do consider how corrupt that person is. Lord Acton (1834 – 1902) so aptly charged, “Power tends to corrupt and absolute power corrupts absolutely.”

    Unbeknownst to you and your colleagues, “Mr. Power” has had his way with all of you, and we are all the worse for it.

    Finally, Senator, I, too, have a title. It is “Right Wing Extremist Potential Terrorist Threat.” It is not of my choosing, but was given to me by your Secretary of Homeland Security, Janet Napolitano, and you were offended by “ma’am”?

    Have a fine day. Cheers!

    Jim Hill
    16808 – 103rd Avenue Court East
    South Hill , WA 98374

    Perhaps we need to remind the drunks, criminals and other low-life swine on our very own hill of our thinking when it comes to how we view their ‘running’ of bodies like NIW and the NIAO.

  • Pigeon Toes

    Mick in October 08 Nevin was tied up with other DRD commissioned IRTs.
    I believe the technical term is “I told you so” 🙂

    MacKenzie was appointed in 2009.

  • Pigeon Toes

    (We fought for peace and the…corrupt won.

    Agreed

  • Mick, section 22 above (22 January 2008):

    “22. The Permanent Secretary is personally answerable to the Assembly for the Department’s use of public funds, including money allocated to NIW: he has designated the Chief Executive as the Accounting Officer for NIW, who is answerable for the use of public money within the company.”

    and this from “Reclassification of Northern Ireland Water”

    “The reclassification means that governance structures can remain largely in tact, however, the legislation and governing documents for the body would require adjustment.”

    Is it not reasonable to presume from the above that the NIO CEO is answerable to the Permanent Secretary for the use of public money by NIW and that this status was in place prior to the publication of the Hillyard report and continued after reclassification?

  • Pigeon Toes

    Perhaps best not to go into that John Simpson article and being one of the Perm Secs 6 Facebook friends (which very obviously he has probably used his work email address for)

  • funnyoldworld

    There is no longer any doubt that we are approaching a defining moment for how the Northern Ireland Government/Civil Service operates.

    Everything thing we have heard about the sacking of the NEDs at N.I.W suggests that we are approaching a point that occurs only once a generation,-when the covers are pulled back on how Govt/Civil Service machine discharges it’s responsibility ,and we discover whether they abide by any code or standard in the way they conduct their business.

    Every thing I am hearing tells me that Mick has got this story right and I think he knows a lot more than he is telling- so why are you holding back Mick?

    I am told that one of the people involved in this saga has been working behind the scenes to establish the facts behind this case before they act.

    We have to hope that on this occasion the rumour mill is right and finally the Inner Circle get their come uppance.

    When they do I think -if even only a fraction of what I’m told is true -we are in for the a N.I version of Watergate(If you’ll pardon the pun) as to why the Non Execs at N.I.W were really sacked.

  • Permanent Secretary Priestly makes a political gaffe during a Belfast Media Group ‘junket’ in New York on June 9 – 10. Did he declare this interest during the appointment of BMG boss Ó Muilleoir as an NI Water NED? Who covered the PS’s expenses? http://bit.ly/b4q2Dp

  • According to its website the ‘open and transparent’ NI Water subscribes to the ICO Model Publication Scheme and hosts a link to the ICO Definition Document:

    “How we make decisions

    Decision making processes and records of decisions.

    We would expect information in this class to be available at least for the current and previous two years.

    * Minutes of meetings of the Board

    We would expect board minutes and the minutes of similar meetings where decisions are made about providing services to be readily available. This excludes information that is properly regarded as private to the meeting.”

    Minutes of Executive Team Meetings can be found but are not readily accessible whereas minutes of the Board are absent.

  • William Markfelt

    ‘one of the Perm Secs 6 Facebook friends’

    By ‘friends’ do you mean ‘people he has only ever met 2 or 3 times’?

    Are you making this up? Even ginger people have more than six friends (usually other gingers, but there you go).