Beyond business as usual: how boards govern reform

If there’s one constant across the public sector right now, it’s change. Health, science, tertiary and local government (water) are all undergoing reform. New boards are being established, existing boards are being repurposed, and directors are being asked to govern not steady-state organisations but entities in transition.

That requires a different mindset. Governing business as usual doesn’t cut it when the board’s purpose is to oversee transition, navigate uncertainty and embed change. Boards play a critical role in making sense of uncertainty, setting a course for management and supporting engagement with staff throughout the change process. In the public sector context, this also includes uncertainty created by ministers and councillors, including through public statements that precede a change process.

At the IoD Leadership Conference in September, David Kirk offered a timely example. As the newly appointed chair of the New Zealand Rugby Board – established through an independent appointments panel – he described what it was like to take on a board made up entirely of new directors. 

The challenge was not simply about strategy or structure – it was about forming a team, setting the tone and agreeing on the behaviours needed for effective governance from day one. As he put it, the first task was alignment – being on the same page and clear about why you’re there and what you’re there to achieve.

That resonates strongly with what’s happening across the public sector. Boards reconstituted as Te Pūkenga is disestablished, the new Health New Zealand Board, those formed following science-sector mergers or being set up for new water CCOs – all face similar dynamics: individuals who may not know one another, suddenly tasked with governing a complex (and sometimes controversial) transformation. 

In these circumstances, early team formation is crucial. Taking time up front to share motivations, discuss how the board will operate, and agree their values, behaviours and the culture they want to create pays dividends when the pressure is on.

But team formation is only the start. These boards are being created to oversee change, so their role is not to keep the ship steady but to steer it through disruption. That requires different information, different decisions and a different cadence. 

Transformation boards need visibility of progress against milestones, benefits, service continuity and stakeholder engagement in ways that traditional board packs don’t provide. They must be clear about decision rights – what must come back to the board and what can be delegated – so momentum isn’t lost to endless escalation. And they need to balance the dual role of governing change while safeguarding the present: students still need to graduate, patients still need care and communities still need safe water.

The scale of reform also means directors must accept they won’t be across every aspect of new funding regimes, operating models or regulatory requirements. That doesn’t signal a lack of capability, but it does mean boards must remain open to ongoing learning – through short briefings on the mechanics of the reform, external advisors for specialist issues, and frank discussions about missing skills or perspectives. 

Capability isn’t only about technical literacy either. Partnership skills, particularly with iwi, unions and communities, are increasingly core to governing public-sector change.

Again, Kirk’s reflections are instructive. He emphasised that the NZ Rugby Board had to function as a team to govern two very different businesses: the global elite game and the grassroots community game. That tension, between commercial imperatives and community obligations, echoes what many public-sector boards face. 

The answer, he suggested, lies in the quality of the team dynamic: a willingness to listen, to value diverse perspectives, to debate openly and then to align around a decision even when not everyone agrees. In governance as in sport, high-performing teams thrive on both challenge and cohesion.

Another challenge is not always knowing the basis or rationale for a change or the trade-offs made along the way. Directors may join a board at the tail end of a change process that appears complete but is, in fact, still under way, which can make oversight difficult. This lack of clarity is even more pronounced for directors compared with executives, who may still have some operational insight.

For directors stepping into reconstituted boards, it can feel daunting to be asked to govern transformation when you barely know your fellow directors. Yet the experience of sectors already in the thick of it suggests that it’s possible to form quickly, govern confidently and maintain legitimacy with stakeholders if the basics are done well. Be explicit about why the board exists now. Invest in early conversations about values and behaviours. Insist on transformation-focused information. Clarify decision rights. And build capability as you go.

Importantly, boards must continue to operate at a governance level, even when transitions may require directors to engage with more detail than usual. This may be necessary to understand how the change will work and to support management effectively. 

However, boards should also be mindful of returning to a more business-as-usual governance role once the transition stabilises, reinforcing for management that detailed involvement is the exception, not the norm.

Ultimately, governing in times of disruption is not about waiting for stability to return. It’s about recognising that change is the work and equipping the board to govern that change well. And while the context may shift, the fundamentals of good governance don’t: the Four Pillars of Governance Best Practice – setting direction and strategy, ensuring effective leadership, overseeing performance and risk, and fostering integrity and culture – remain as relevant in times of transformation as they are in times of stability.

Takeaways for directors

• • Form fast: invest early in team cohesion, values, culture and behaviours
  • Govern change, not just BAU: demand information and structures that reflect transformation
  • Balance continuity and disruption: safeguard service delivery while steering reform
  • Strengthen capability: recognise where knowledge or perspectives are missing and address them quickly
  • Invest in understanding the change: ensure the board is clear on its basis, rationale and progress to date.