Recommendations & Conclusions
4 items
11
Conclusion
Seventh Report - The Role of Non-Execut…
Accepted
The Corporate Governance Code stipulates that non-executive board members should be appointed on merit through a fair and open process. The current Government Lead Non-Executive told the Committee that a small proportion of NEDs currently in post have been directly appointed and, since he took on the The Role of …
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The Corporate Governance Code stipulates that non-executive board members should be appointed on merit through a fair and open process. The current Government Lead Non-Executive told the Committee that a small proportion of NEDs currently in post have been directly appointed and, since he took on the The Role of Non-Executive Directors in Government 35 role in March 2022, every post had been advertised on the Cabinet Office public appointments website. However, our evidence suggests that these practices have varied considerably over time and the Committee is concerned by the lack of consistency, accountability, and transparency surrounding how NEDs are recruited. We believe it is completely unsatisfactory that departments are not consistently providing information in the public domain about the process for appointing NEDs, nor abiding by the requirement to justify departures from the Corporate Governance Code in departments’ annual report and accounts. The Committee also recognises the potential impact that departing from a fair and open process may have on the diversity of the candidates and the composition of the board.
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Government response AI summary
The government states that all NEBM appointments now comply with the Governance Code, ensuring transparency and consistency through public appointment processes. They agree that Code departures should be reported and will consider summarising these in the Government Lead Non-Executive's annual report.
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12
Recommendation
Seventh Report - The Role of Non-Execut…
Accepted
The Government Lead Non-Executive should ensure that every department is fully transparent about the recruitment process for its NEDs and that all departures from the Corporate Governance Code are justified in the governance statements of departments’ annual report and accounts. The Government Lead Non-Executive should work with departments and Ministers …
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The Government Lead Non-Executive should ensure that every department is fully transparent about the recruitment process for its NEDs and that all departures from the Corporate Governance Code are justified in the governance statements of departments’ annual report and accounts. The Government Lead Non-Executive should work with departments and Ministers to encourage and share best practice regarding the appointment of NEDs. Furthermore, to improve the transparency of appointments in the immediate term, the Committee recommends that all departments be required to publish a GOV.UK news story within four weeks of an appointment being made, detailing the recruitment process (including whether the job was publicly advertised), the selection process, and the appointees’ suitability for the role.
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Government response AI summary
The government stated that existing processes address transparency, with departures from the Corporate Governance Code disclosed in annual reports, appointments announced on GOV.UK pages, and adverts published on the Cabinet Office website detailing the process.
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14
Conclusion
Seventh Report - The Role of Non-Execut…
Accepted
The Government has indicated that it will implement the Committee on Standards in Public Life’s (CSPL) recommendation that NED appointments should be regulated by the Commissioner for Public Appointments, which we welcome. However, it is disappointing that it appears no progress has been made since the CSPL report was published …
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The Government has indicated that it will implement the Committee on Standards in Public Life’s (CSPL) recommendation that NED appointments should be regulated by the Commissioner for Public Appointments, which we welcome. However, it is disappointing that it appears no progress has been made since the CSPL report was published in 2021.
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Government response AI summary
The government confirms it has met the commitment by updating the Public Appointments Order in Council 2023, which now includes the regulation of non-executive directors to ministerial department boards by the Commissioner for Public Appointments.
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26
Recommendation
Seventh Report - The Role of Non-Execut…
Accepted
The Committee acknowledges the arguments against NEDs being formally accountable to Parliament for any departmental or policy-specific matters, given the potential implications for the principle of ministerial responsibility. However, we believe that the Government Lead Non-Executive, as a quasi-regulator and coordinator of the NED cohort, should be subject to parliamentary …
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The Committee acknowledges the arguments against NEDs being formally accountable to Parliament for any departmental or policy-specific matters, given the potential implications for the principle of ministerial responsibility. However, we believe that the Government Lead Non-Executive, as a quasi-regulator and coordinator of the NED cohort, should be subject to parliamentary scrutiny. (Paragraph 76) 38 The Role of Non-Executive Directors in Government
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Government response AI summary
The government does not agree with the committee's characterisation of the Government Lead Non-Executive as a quasi-regulator, but notes that GLNEDs have historically appeared before the committee and will continue to make themselves available for scrutiny.
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