Reflections on due diligence

Blog post by Peter Riddell

Friday 6 March 2020

Due diligence is an important part of the public appointments process, to check whether there are any reputational risks raised by the candidates being considered. Yet there are unresolved questions about how due diligence should be undertaken in order to be fair to applicants and not to produce avoidable delays in competitions.

Due diligence is an important part of the public appointments process, to check whether there are any reputational risks raised by the candidates being considered. Yet there are unresolved questions about how due diligence should be undertaken in order to be fair to applicants and not to produce avoidable delays in competitions.

The Governance Code is clear (in section 9.1) on the duty of advisory assessment panels to explore any conflicts of interest with a candidate at an interview. This covers not only financial interests but ‘anything that would call into question their ability to perform the role’. In the age of social media that increasingly means what someone may have tweeted or even retweeted as well as Facebook posts, blogs or other online comments.

That question was central to my report in spring 2018 on appointments to the board of the Office for Students which criticised failures by the Department for Education to undertake sufficient and consistent due diligence. I argued that such checks should be proportionate and relevant to the post. In most cases these could and should be ‘light-touch’, enough to alert the interview panel to any potential problems. Moreover, any resulting questions should be raised with candidates at interview to give them a chance to explain the context and significance of any social media post, and how they intend to manage their online life in a way that is consistent with holding a public appointment. This is both in line with the Code’s provisions on fairness and transparency and to provide the fullest possible information to ministers. It is also crucial for upholding the Seven Principles of Public Life for all holders of public office, not forgetting that public bodies invariably have their own values in addition.

There are, however, growing concerns about whether these guidelines are being properly observed. A recent decision notice on a complaint about two applications to public bodies sponsored by DCMS raised questions about whether due diligence had been undertaken freshly for each competition. Moreover, there are reports from departments of due diligence about candidates’ social media postings being undertaken after an assessment panel has decided which candidates are appointable.  This has two adverse effects. First, there is the principle of fairness, indeed natural justice, that candidates need to be given the opportunity to explain both any past postings and how they will manage their online presence if they are appointed. Second, such post-interview social media trawls appear to be introducing further, avoidable delays into a process which already often takes too long- and in more than half of all competitions takes longer than the three month aspiration for completion.

It is, of course, up to ministers to choose which candidates to appoint and to defend their decisions. They understandably want to work with people with whom they will be comfortable and do not want appointees to take a high profile in criticising the government or bringing the public body into disrepute. Appointees should behave with sensible restraint if they join a public body and must sign up to the Seven Principles. But there is a danger of applying due diligence considerations disproportionately and without relevance to the particular post. It would be worrying, and contrary to the spirit of the Code, if otherwise appointable candidates are being ruled out because of their tweets on political issues of no relevance to the body concerned. This risks jeopardising the perceived independence of the bodies.

The explicit provision in the Code (9.2) that ‘political activity should not affect any judgement of merit or be a bar to appointment’ works both ways. Due diligence should establish potential reputational risks to be considered by assessment panels, and then by ministers, but this should not develop into a litmus test of political acceptability. We need a wide range of views and backgrounds on the boards of public bodies to strengthen decision making and governance.

March 2020