Research goes under the auditor's microscope

Hugh Aldersey-Williams examines Smith & Nephew's scientific approach

COMPANIES are required by law to audit their finances. Many now conduct audits to assess everything from the ecological impact of their work to the efficacy of their internal and external communications.

But the mysterious work of scientists in company R&D departments has largely escaped similar scrutiny. Hi-tech companies frequently retain panels of scientists, but their role is to advise rather than to assess.

Smith & Nephew, the international health-care company, has taken the idea a stage further. It began with the appointment of Nancy Lane, a Cambridge University biologist, as a non-executive director. As the only scientist on the board, her job was to provide an informed critique of company R&D programmes.

She now chairs a panel of five top scientists - three British and two from the US - who meet for two or three days twice a year to hear presentations by the company's research teams and to make recommendations based on what they have heard.

"We had no independent assessment of the quality of the work," says Alan Suggett, group director of R&D. "We wanted to assemble a group of independent eminent academic people with a broad range of disciplines."

Dr Lane's scientists then report to the company board. "The board gets an independent review of the quality of our science, which they and I find extremely important," says the chief executive, John Robinson. "She is making value judgements about amounts of money, but within limits. We have to expect to be wrong on some of our programmes. If some aren't wrong then we aren't being adventurous enough."

One of the two annual meetings always takes place at Smith & Nephew's main research base outside York. The other focuses on another research centre in Britain or the US. Now in its third year, the audit has now examined all the sites and is ready to start over.

Staff scientists were wary of the idea at first. They feared assessments might be made on inappropriate criteria, and they resented the time spent putting together presentations to the panel. Those working on short-term projects with a clear market goal were particularly worried. "We don't call it an audit - we call it a visit," says Mr Robinson. "But the direction of some programmes has changed."

In one case, the panel heard of a research team's goal and its proposed approach and recommended a different angle. Another time, it assessed the technological capabilities of a company, Advanced Tissue Sciences, prior to Smith & Nephew taking a stake in it.

"In a field where the technological base is changing dramatically, it is a very important exercise," says panellist William Bonfield, director of the Interdisciplinary Research Centre in Biomedical Materials at Queen Mary and Westfield College.

Company executives and advisers now say staff scientists' suspicions have been allayed. "There's an opportunity to talk to experts in the field in a relaxed and informal environment," says Dr Lane. "It forces them to crystallise their ideas."

The panel of scientists has remained constant to date, but the intent is to rotate its composition on a gradual basis. "The challenge is to maintain their independence from the company," says Professor Suggett.

Such "visits" are a familiar feature of small venture-capitalised companies in such fields as biotechnology, especially in the US. But these companies have a conveniently narrow focus of research interests.

Few large companies appear to employ similar assessments of their scientific research. Alan Baxter, UK research director at Glaxo Wellcome, says: "We have a number of external consultants, but rather than have them audit generalised sets of programmes, we would seek their advice in particular areas."

The model that Smith & Nephew is following is perhaps closer to what happens in academia, where scientists have long since shed any inhibitions about subjecting their work to peer review.

But the reviews at Smith & Nephew are sharper as well as more frequent, Professor Bonfield believes, something made possible by the confidentiality agreement to which panellists are bound. "It's friendly but probing," he says.