National Property Board of Sweden’s work on a sound management culture

On behalf of the Government, the Swedish Agency of Public Management (Statskontoret) has analysed the work of the National Property Board of Sweden (SFV) on a sound management culture. The background of Statskontoret’s assignment is the corruption discovered at SFV.

Statskontoret’s analysis shows that SFV has shortcomings in several areas. Shortcomings that need to be handled in the continuing work of creating a sound management culture. The shock that followed the revelations of the corruption has led to a clarification of the importance of the management culture to both employees and managers at SFV. Today, there is extensive receptivity to changing and strengthening the management culture in SFV. SFV has also begun such change work.

Shortcomings in governance and leadership

Statskontoret’s analysis shows that in part of SFV, norms and values have developed that are not always compatible with sound management culture. Various property areas have developed their own interpretations of their mission, regardless of what it says in steering documents and regardless of whether it conflicts with sound management culture. SFV has also been characterised by a significant naiveté in terms of the risks of corruption. For example, SFV did not decide until this year that so-called fraud risks should make up a special risk category in the risk analysis work.

SFV has been characterised by weak leadership, which has come to expression in unclear governance and ambiguous responsibility conditions. For example, Statskontoret has been able to note ambiguities regarding how decisions are to be made and who are to make them. Follow-up and control have also had shortcomings. This is true of the work on procurements, among other things.

There is a large gap of trust between the management and employees within SFV. For example, employees avoid to express criticism of their managers out of fear of reprisals. The employees’ lack of trust in the management is the most serious and urgent problem for SFV to handle in the view of Statskontoret.

Board now prioritises the work on a sound management culture

The work on a sound management culture is a high priority in SFV today. A number of measures have also been planned and initiated during the year. Among other things, internal control has been strengthened and the work on procurements has been centralised. SFV is also conducting a review of internal steering documents with the aim of clearing out unnecessary documents and updating others. In addition, various educational efforts are being conducted to reduce the risk of corruption. An external whistle-blower function is also being procured.

Statskontoret’s recommendations

The employees must be involved in the formulation of the work on the management culture

The most important instrument to avoid corruption is the individual employee’s attitudes and values. Good judgement based on norms and values that promote a sound management culture helps a great deal in preventing corruption. SFV’s work with a sound management culture should be based on this observation.

Statskontoret has noted that there is a deep mistrust of SFV’s management among many employees. This gap of trust must be bridged if the work of creating a sound management culture is to succeed. In Statskontoret’s opinion, the employees’ trust can only be restored by giving them real influence over the work of strengthening the management culture within SFV. Then, the employees’ participation may not be limited to discussing core value issues at workplace meetings or special events. They must also be given the opportunity to influence the formulation of the management culture work in a broad sense.

Ultimately, the responsibility for the work lies with SFV’s management. All managers must actively convey a sound management culture in word and deed.

SFV should prepare a collective strategy for the work on a sound management culture

For the work that SFV is now conducting to strengthen the management culture and prevent corruption to be successful, it is important that it is coordinated in the right way. In Statskontoret’s opinion, this coordination should take place by SFV preparing a collective strategy for the management culture work. Well-implemented strategy work can create good conditions for priorities, follow-ups and, not least, establishing support for the work.

In support of SFV’s work, Statskontoret recommends that SFV primarily consider the following measures.

Measures to promote a sound management culture

• Place the overall responsibility for the management culture work with SFV’s management. Then clearly communicate within SFV how the responsibility for the work otherwise will be allocated.
• Place focus on the leadership role. Through courses, coaching and a developed management recruitment, SFV can change and strengthen the leadership. The intranet can also be used to provide practical support to the managers.
• Make sure that all employees get an introduction in the state’s core values and what it means to be a state employee. Develop a special course adapted to SFV’s consultants.
• Give the employees strong influence over how the work on a sound management culture is conducted. SFV must work to create a culture of improvement that makes use of the employees’ knowledge.
• Make sure to establish support for the management culture work out in the activites. This can suitably be done through discussions at workplace meetings concerning various difficult situations or dilemmas.
• Make sure that the work on a sound management culture is continuously followed up, such as with discussions at management group and manager meetings. 

Measures for systematic internal governance and control

• Make the work of clarifying the division of responsibility a priority. It is absolutely crucial that it is clearly indicated who should make certain decisions in order for internal governance and control to work.
• Make the work on in-depth controls of especially risky operations, such as letting property, a priority.
• Continue the work of reducing the risk of corruption in procurements and purchasing. Pay attention to the risk of new problems as a result of capacity shortages in the functions that gain expanded duties.
• Review the extensive use of consultants based on what risks it can entail of improprieties and corruption and how it affects the work on a sound management culture.
• Ensure an effective risk work within SFV. This work needs to have a clear connection to the management culture work and a high degree of involvement of employees at all levels in SFV.
• Make sure that there are updated procedures and guidelines for handling bribes, conflicts of interest, friendship corruption and secondary employment, and that they are distributed and made known in the entire organisation.
• Make sure that there are established and well-known procedures for the measures that need to be taken if suspected corruption is discovered.

Special recommendations to the Government

Statskontoret deems that it is important for the Government to carefully monitor the work of the National Property Board of Sweden on a sound management culture. The Government can do this in the assignment dialogue with SFV and through assignments in the appropriation directions.

SFV is a board authority. The Government has the possibility to present in dialogue opinions of how SFV should prioritise its operations. Statskontoret wants to make the Government aware of the possibility of better utilising SFV in the turbulent situation that SFV is now in.