Number 10 announced today that former Ofcom CEO Stephen Carter has been appointed as senior adviser to Gordon Brown covering communications, strategy, etc. I think Carter will probably best be remembered as the person promising and delivering on cost savings in the field of public regulation (while still paying good salaries), so his expertise might come in handy as Gordon Brown faces down the public sector over pay.

Most citizens and consumers probably hope he puts a bug in the PM’s ear on broadband, particularly next generation broadband.

Ofcom also announced today that Sara Nathan ended her term as a non-executive director and the appointment of Colette Bowe (formerly Ofcom Consumer Panel) and Tim Gardham (St. Anne’s College, Oxford) as non-executive directors. There appears to be some discretion as to how long non-execs serve on the Ofcom board. Two non-execs (Currie and Banerjee) will by 2009 have served seven year terms — more than twice as long as others (Edmonds, Hooper).

Warning: Only continue reading past this point if you care about board structure and its implications for governance…

Despite it being something like a black box in terms of transparency, the six non-executive directors of Ofcom govern the regulator. Putting non-executive directors in charge of organisations is something of an experiment that commenced in the U.K. in the 1990s. Ofcom are a notable public organisation that uses this structure (so is the FSA). Part of my research on Ofcom examines the issue of whether that governance model is working well in the field of public regulation.

In its application to the corporate world, the non-exec board has lately come under attack, most notably by Warren Buffet and the Academy of Management. Buffet wrote in one of his letters to shareholders:

‘In selecting a new director, we were guided by our long-standing criteria, which are that board members be owner-oriented, business-savvy, interested and truly independent. I say “truly” because many directors who are now deemed independent by various authorities and observers are far from that, relying heavily as they do on directors’ fees to maintain their standard of living.’

‘Charlie [Munger] and I believe our four criteria are essential if directors are to do their job – which, by law, is to faithfully represent owners. Yet these criteria are usually ignored. Instead, consultants and CEOs seeking board candidates will often say, “We’re looking for a woman,” or “a Hispanic,” or “someone from abroad,” or what have you. It sometimes sounds as if the mission is to stock Noah’s ark. Over the years I’ve been queried many times about potential directors and have yet to hear anyone ask, “Does he think like an intelligent owner?”’

Empirical studies have shown that non-exec boards make almost no difference in corporate perfomance. But studying board performance in the field of public regulation is of course another matter. There are other values at stake.

If you have any insights into Ofcom’s board or the general non-exec model as applied to public regulation, please get in touch…