Part 5: Leadership, governance, management, and overall culture

5.1
In this Part, we assess the role of the DHBs’ leadership, governance, and management, and their overall culture, in identifying, disclosing, and managing conflicts of interest.

Leadership, governance, and management

5.2
At both the Counties Manukau DHB and the Waitemata DHB, we formed the overall view that the chairpersons and chief executives were attentive to conflict of interest matters, and accepted personal responsibility for the sound management of such matters. They led by personal example, by taking a very cautious approach to declaring conflicts of interest of their own and by declining most offers of gifts and hospitality.

5.3
Both the Counties Manukau DHB and the Waitemata DHB had administrative staff who took a proactive role in advising on conflicts of interest, reviewing policies and procedures, and helping deal with particular situations that arise. Those staff members were well known in their organisations as the main contact points for other staff or members who needed assistance.

5.4
By contrast, at the Auckland DHB it was not apparent to us that the board made any significant attempt to engage with conflict of interest issues. Such matters did not appear to have a high profile at meetings, and the board did not often consider whether particular members needed to be excluded. Practices or procedures had not changed significantly since the Court decision in the Diagnostic Medlab case. We had expected that, if anything, the Auckland DHB might have a higher sensitivity to conflicts of interest, because of previous conflict of interest concerns.

5.5
The Auckland DHB considered that it had carried out a lot of work to improve its practices and organisational values in recent years. In particular, many people expressed the view that the current chief executive had tightened the rules on gifts and hospitality.

5.6
Overall, people we spoke to at the Auckland DHB were not always clear about who they should go to for advice about conflicts of interest. It seemed to us that the Auckland DHB lacked a visible “owner” of conflict of interest issues in its administrative centre, to provide general oversight and assistance with the policies and their implementation. Such a person could be, for example, someone in a legal, corporate service, board support, finance, human resources, or internal audit role. Individuals in most of these areas currently have some involvement with aspects of conflicts of interest, but it was difficult to see that any particular individual or department was willing to take responsibility for leading, fostering, and co-ordinating the DHB’s management of conflict of interest issues. The purpose of such a role would not be to centralise decision-making or remove responsibility from the relevant managers (or decision-making groups), but to provide a clearer avenue of support and guidance for those people who need assistance with difficult cases.

5.7
At all three Auckland DHBs, matters about managing conflicts of interest were, in general, also integrated into other policies, and disclosing interests was a routine part of meeting and contracting processes.

5.8
There were no apparent extra difficulties about work carried out on a regional basis or through subsidiaries.

5.9
The three Auckland DHBs were all concerned about whether they were doing enough to manage conflicts of interest, in the light of the approach taken by the High Court in the Diagnostic Medlab case. However, they were also often unsure about what more they could or should be doing.

Overall culture

5.10
The three Auckland DHBs all consider themselves to be highly ethical and conscientious organisations. They pride themselves on their organisational values, and point out that many of their staff belong to professions that impose strict ethical obligations on their members.

5.11
In general, it was clear to us that people at the DHBs appreciate that they work in a public sector context, and that high expectations apply to them about impartiality, transparency, integrity, and the spirit of service to the public. They have a strong professional understanding and acceptance of general values around ethics and integrity.

5.12
Occasionally, we encountered a view that what was most important was that individuals act honestly and with good intentions. This can indicate a less than full appreciation of the concept of conflicts of interest. Labelling a situation a conflict of interest does not mean that some misconduct has occurred or will occur, and it does not indicate a lack of trust or faith in the person concerned. But the reasonable perception of an outside observer of the possibility for improper conduct is often what creates the risk for the organisation. Conflicts of interest can undermine public trust and confidence in the organisation (see paragraphs 6.23-6.25).

5.13
We sometimes detected a view that the clinical and non-clinical staff in the DHBs were not always closely integrated or aligned in views and attitudes. This may mean that administrative staff and other managers have a reduced ability to influence the behaviour of clinical staff, including in the area of managing conflicts of interest.

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