Corporate Governance in a Post-Partygate World

As the dust begins to settle from the ‘Partygate’ scandal that gripped British politics during the most part of 2022, some clear lessons are beginning to emerge for anyone who is regularly under the public gaze.

British politics can often be bewildering to outsiders, with its outsize focus on tradition and strange conventions, like treating a giant golden mace as if it’s alive and slamming doors in people’s faces. One of the strangest things to a lot of onlookers though is the fact that Britain doesn’t have a written constitution.

This effectively means that the way politics works in the country is based upon a series of ‘conventions’ (historical ways of doing things that have become accepted as the right way to do them) and honour: the idea that politician will always behave with integrity, keep their word and act in the public, not private, interest.

When this old-fashioned way of governing collides with the governance standards of the 21st century, as we saw with the Partygate Scandal, sparks well and truly fly.

So, what actually was Partygate and what lessons does it teach us about the importance of following best practice corporate governance? We decided to have a closer look.

Partygate: A gateway to renewed conversations about ethics in public life

Partygate refers to a political scandal that gripped the UK in 2022, centred around parties that had been held by government and Conservative Party employees during the COVID-19 pandemic in 2020 and 2021, at a time when widespread public health legislation restricted most gatherings.

In January, it emerged that 12 gatherings held in government buildings, including Downing Street, were being investigated by the police, with three of these attended by the then-Prime Minister, Boris Johnson, his wife and the current Prime Minister, Rishi Sunak. Eventually, after deep public anger, the police issued 126 fixed penalty notices to 83 people who had committed offences by breaching COVID-19 regulations.

As if this wasn’t damaging enough for the government and Conservative Party, the subsequent denials by Prime Minister Boris Johnson that any parties or gatherings had taken place and that he had been in attendance, further compounded public anger. In effect, it imploded the Conservative party’s poll lead, inflicting a mortal wound on the Johnson administration that arguable started the process that caused its collapse.

What specific issues does Partygate raise for Corporate Governance?

Whilst Partygate didn’t see any high-profile court-cases or major prosecutions besides a few fines, it did inflict severe damage on the reputation of government and the Conservative party and has focused public attention on stories of corporate sleaze, poor governance and failings in the integrity of leaders ever since. Thanks to Partygate, the attention of the public is likely to be fixed firmly on standards and governance in public life for a long-while yet, even if the UK Government itself isn’t beholden to the rules of corporate governance legislation.

The scandal however has served as a valuable reminder about the danger of failing to comply with best practice corporate governance, both in terms of the law and also wider reputational damage.

Specifically, Partygate has focused our minds on a number of issues with direct relevance to Corporate Governance:

1. Integrity in leadership

As point 1. B of the UK Corporate Governance Code puts it, ‘All directors must act with integrity, lead by example and promote the desired culture.’

In the case of Partygate, it’s clear that if the leadership of the Government was the leadership of a corporate organisation, it would have failed to live up to the spirit of the Code and would probably be facing penalties.

Integrity means honesty: saying you’ll act in a particular way and doing it. It means holding strong principles that inform those actions. If Partygate has shown us anything, it’s that with principles and values comprising a key part of corporate governance, it’s clear that any breach in them risks putting your organisation at the mercy of the law and public opinion.

2. Whistleblowing

The sheer number and scale of illegal gatherings held by the Government and Conservative Party means that knowledge of the events must have been a widely-known - and widely kept - secret by most employees at the company.

The fact that only a few whistleblowers ultimately blew the lid on the affair points to how difficult it is for ordinary employees to go public with allegations of wrong-doing or law breaking at an organisation, for fear of losing their job, facing victimisation or being attacked in public.

Boards need to make sure that whistleblowers are adequately protected in organisations and that employees are encouraged to come forward if lawbreaking at work is happening.

3. Problematic company cultures

Partygate points towards the importance of company culture in determining how well corporate governance at an organisation lives up to its expectations.

If company culture at a company is non-existent or tolerates rule-breaking, inconsistency in the way that rules are applied or dishonesty, it will seep its way into most aspects of the way that an organisation operates. This will naturally cause problems when it comes to living up the standards of corporate governance codes.

What should boards do post-Partygate?

Even though Partygate was very much a scandal centred in the heart of Downing Street and the British Government, it still has some clear and essential lessons for public and private sector organisations when it comes to corporate governance.

What’s more, it has supercharged debate about ethics, standards and honesty in public life and society in general and captured the attention of the public. If you’re serious about protecting the professional reputation of your brand and organisation, it’s time to pay serious attention to the way that you and your board think about - and perform - corporate governance.

Here are some of the key areas that you should be thinking about if you’re trying to learn from the mistakes that others have made during the Partygate scandal.

1. Focus on living company values

One of the most important aspects of corporate governance is the board of directors leading by example. This means living the values, ethics and principles that are embodied in the mission statement of your organisation.

Rather than there being one rule for senior executives and another rule for employees, there should be fairly applied rules that hold everyone to account and to the same, high standards.

In other words, company boards should endeavour to embody the values that they want their company to represent. If your mission statement and values say that you’re a company that acts with integrity at all times, act with integrity at all times. If they say that you value honesty above profit, value honesty above profit. It’s as simple (or perhaps as complicated) as living your principles.

2. Closely examine company culture and where it falls short

Encouraging the development of a strong company culture based on equally strong values is crucial to guarding against corporate governance failures and possible abuses.

Company culture is a complex, multi-faceted element of a modern organisation that must be nurtured and given the space to develop at the same time. Think of it as the personality of your organisation. Positive company cultures help employees to feel valued, improve satisfaction and encourage better productivity, whilst also enhancing public perception and reputation.

It establishes clear expectations in terms of behaviours that are intrinsic to the overall success of the company, hence why it’s so important when it comes to corporate governance.

By taking the time to develop a positive company culture, and looking at areas where it can be improved, you can better support best practice corporate governance at your own organisation.

1.    Deal quickly and appropriately with allegations of impropriety or rule-breaking and take responsibility

When it comes to uncovering evidence of impropriety or rule-breaking, it’s imperative that company boards, directors and senior staff deal with any allegations as quickly, thoroughly and as professionally as possible. This means ensuring that the right processes and risk planning exist in case of situations like this. It also means ensuring that formal investigations are carried out with the utmost attention to detail and accuracy and that responsibility is taken by the appropriate party if rule-breaking is found to have occurred.

The refusal to be honest about the situation and accept your role in it might benefit your organisation in the short-term but, ultimately, such an abdication of responsibility will catch up to you in the long term.

2.    Invest in the skills and knowledge of the company board

Perhaps the best way to guard against mistakes when it comes to corporate governance is to develop the skills, knowledge and experience of the board responsible for it at an organisation.

In the past, the only way to really gain the expertise needed in a board member was to dive in at the deep end, get a board position and learn whilst doing the role. Nowadays though, dedicated qualifications and courses exist to help company directors learn the knowledge and skills that they’ll need to successfully serve on a company board.

At ICS Learn, we offer dedicated corporate governance qualifications like the CGI Diploma in Corporate Governance and the CGI Diploma in ESG (Environmental, Social and Governance). These are perfect for company directors and senior executives who are coming into the world of boards for the first time, or who want to develop how well they work with them.

Towards a post-Partygate world of corporate governance

Eventually, like practically all political scandals, the memory of Partygate will fade from the public consciousness and be consigned to pages in the history books. It contains some important lessons about the key issues that boards need to be focusing on when it comes to corporate governance however that are worth remembering for the future. Bear in mind the issues we’ve discussed in this article and you’ll be able to hone your own corporate governance practice to meet the challenges of tomorrow as and when they rear their heads.

Develop your corporate governance skills with a 100% online qualification that you can complete from anywhere. Download your free Corporate Governance Institute course guide today.