Wednesday, April 29, 2009

they are complaining that its result is one they dislike. That means no amount of effort to make the process fairer can ever satisfy them

TO BE NOTED: From the FT:

Box-tickers should not be the ones making decisions

Published: April 28 2009 20:16 | Last updated: April 28 2009 20:16

John Kay, columist

I once served as a director of the scheme that compensated investors who had lost money through the actions of crooked or negligent financial advisers. The board began its activities with zest and esprit de corps. Its task was to strike a balance by sustaining confidence in the financial services industry without removing incentives to behave prudently or imposing excessive burdens on those who did.

But matters soon went downhill. Ambulance-chasing solicitors gathered groups of aggrieved investors. They made lengthy submissions and threatened judicial review of decisions. The submissions usually had little merit. Few threats came to anything and fewer still survived even cursory scrutiny by the courts. But to respond was time-consuming and the effect on our activities was dramatic. It was soon impossible to hold any meeting without a lawyer present to ensure strict attention to procedure.

You might think that this care and attention would lead to better decisions. It did not. Increasingly, we became concerned not to find the right answer but to find an answer that would stand up to external challenge. The best argument was usually an appeal to precedent. The existence of a previous decision did not, of course, imply that either the current or the earlier decision was a good one.

But the long-term consequences were more complex, and more serious. People came to the activity with a genuine desire to deploy their skill and judgment in public service. But the emphasis on procedure over substance meant that the opportunity to exercise skill and judgment drained away and the proceedings became mind-numbingly boring. Imagine an afternoon spent sitting through a one-sided submission from a second-rate firm of solicitors, lawyer by one’s side, minuting reasons for rejecting each preposterous argument, and returning a month later to review predictable counter-assertions. People, including me, discovered that they had more interesting things to do.

Issues of process never end. There is always someone else who might be consulted, always some additional consideration that might be taken into account, always some other document that might be relevant. Most people who complain about the process of decision are not really complaining about the process; they are complaining that its result is one they dislike. That means no amount of effort to make the process fairer can ever satisfy them. The matter will be disputed until all legal options, or the financial resources of those who support them, are exhausted. Or until the opposition is bored into submission. Frequently this happens.

There are some people who have a genuine interest in procedure for its own sake. The sort of people who write letters to newspapers pointing out errors of syntax. Society needs such people, and they usefully occupy mid-level positions in the judiciary or compliance departments. Others are obsessive about particular subjects – diversity and the environment are frequent choices. Some people have convinced themselves, beyond reason, that others should give them money. These groups will pursue their argument with tenacity in every possible forum. Society needs them less, although they remind us, if much too frequently, of the importance of the causes they espouse. But the capacity of all these people not just to waste time and delay decisions but also to damage the process of decision-making is huge.

The arguments that reasons should be given for all decisions, that consultation should be undertaken, that people should be accountable, are superficially compelling. But the big bureaucracies, public and private, whose processes fulfil these requirements are not known for the quality of their decisions but for their ineptitude. Typically the reasons given for judgment are rationalisations after the event, the consultation is a formality rather than a sincere search for opinions, and the accountability is a matter of extensive paperwork rather than a genuine appraisal of performance.

But the real downside of box-ticking is not that it is hypocritical, although it often is. It is that the people who find it endurable are often people who should not be making decisions at all.

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