Recommendations & Conclusions
7 items
1
Recommendation
Seventh Report - The Role of Non-Execut…
Acknowledged
Non-executive board members were brought in in their current form in 2010 to “make Government operate in a more business-like manner”. However, it is unclear whether the corporate governance of Whitehall still sits at the centre of their purpose and activities. The role of non-executive board members and lead non-executive …
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Non-executive board members were brought in in their current form in 2010 to “make Government operate in a more business-like manner”. However, it is unclear whether the corporate governance of Whitehall still sits at the centre of their purpose and activities. The role of non-executive board members and lead non-executive board members are broadly defined in the Corporate Governance Code for Central Government Departments and the accompanying guidance note. However, our evidence suggests that, in practice, how boards and NEDs are used is highly dependent on the relevant Secretary of State and often NEDs wield significantly more responsibilities within their department outside the board than is publicly documented or defined. This is problematic, as it hinders the transparency, consistency, and accountability of their positions. We welcome efforts by the Government Lead Non-Executive to promote consistency through the provision of centralised guidance and coordination. However, the Corporate Governance Code is insufficient and there should be more public accountability and clarity on the work of NEDs and their purpose.
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Government response AI summary
The government acknowledges the need for consistency and public accountability for NEDs, stating it has taken steps and will continue to embed this approach. Further adjustments will be considered alongside Lord Maude’s review, maintaining departmental flexibility, and guidance will be provided for Lead Non-Executives to …
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4
Conclusion
Seventh Report - The Role of Non-Execut…
Acknowledged
The Government’s commitment to review the appropriate role for NEDs and departmental boards, as part of the broader Governance and Accountability Review being led by the Rt. Hon. Lord Maude of Horsham, is welcome. However, the Committee is disappointed that it is now over five months overdue.
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The Government’s commitment to review the appropriate role for NEDs and departmental boards, as part of the broader Governance and Accountability Review being led by the Rt. Hon. Lord Maude of Horsham, is welcome. However, the Committee is disappointed that it is now over five months overdue.
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Government response AI summary
The government acknowledged the delay in Lord Maude’s Review of Governance and Accountability, stating that additional time was granted for full consideration, and the Cabinet Office expects to receive and publish the final findings in the near future.
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7
Conclusion
Seventh Report - The Role of Non-Execut…
Acknowledged
Furthermore, the Committee considers that the power of NEDs, currently included in the Corporate Governance Code, to be able to recommend to the Prime Minister, Secretary of State, and Cabinet Secretary that the Permanent Secretary be removed from their post if they are deemed to be an obstacle to delivery, …
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Furthermore, the Committee considers that the power of NEDs, currently included in the Corporate Governance Code, to be able to recommend to the Prime Minister, Secretary of State, and Cabinet Secretary that the Permanent Secretary be removed from their post if they are deemed to be an obstacle to delivery, is only appropriate if NEDs are independent sources of advice.
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Government response AI summary
The government acknowledged that NEBMs are able to recommend the removal of a Permanent Secretary and affirmed that NEBMs adhere to the Seven Principles of Public Life, acting impartially and on merit.
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18
Recommendation
Seventh Report - The Role of Non-Execut…
Acknowledged
The number of NEDs per department is variable. We believe there should be common standards underpinning the rationale for the number of NEDs per department in the interests of consistency and good governance. The Government should confirm in response to this Report a consistent policy in order to relate the …
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The number of NEDs per department is variable. We believe there should be common standards underpinning the rationale for the number of NEDs per department in the interests of consistency and good governance. The Government should confirm in response to this Report a consistent policy in order to relate the number of NEDs in a department to its size and remit. This should then be reflected in future iterations of the Corporate Governance Code and accompanying guidance note. (Paragraph 57) Governance and accountability
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Government response AI summary
The government states it will continue to improve consistency and will consider additional adjustments alongside Lord Maude’s review. While it highlights the need for departmental flexibility regarding NED numbers, it commits to updating or replacing the Corporate Governance Code by the end of the calendar …
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22
Recommendation
Seventh Report - The Role of Non-Execut…
Acknowledged
Given that non-executives in Government departments, unlike their private sector equivalents, operate in an advisory capacity only, the Committee does not believe that NEDs should have more formal accountability to Parliament. However, there should be more information in the public domain on their roles and responsibilities in Government in the …
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Given that non-executives in Government departments, unlike their private sector equivalents, operate in an advisory capacity only, the Committee does not believe that NEDs should have more formal accountability to Parliament. However, there should be more information in the public domain on their roles and responsibilities in Government in the interests of transparency and good governance. The Government Lead Non-Executive Annual Report and each department’s annual report and accounts are currently the primary route for transparency, with the former providing some, albeit limited, data on the diversity of board members and the frequency of and attendance at meetings. At present, these documents are published too infrequently to provide meaningful transparency.
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Government response AI summary
The government acknowledges the committee's feedback and states it will consider whether the Corporate Governance Code would benefit from changes to improve transparency around NEDs' roles and responsibilities.
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24
Conclusion
Seventh Report - The Role of Non-Execut…
Acknowledged
We are concerned by the lack of consistency and transparency in how departments manage any real or perceived conflicts of interests. This includes a wide variation in how information is reported in departments’ annual report and accounts and a lack of transparency over non-financial interests.
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We are concerned by the lack of consistency and transparency in how departments manage any real or perceived conflicts of interests. This includes a wide variation in how information is reported in departments’ annual report and accounts and a lack of transparency over non-financial interests.
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Government response AI summary
The government agrees that a common and consistent format for registers of board members' interests would be welcome and notes that conflicts should be disclosed and managed internally, with public disclosure periodically via departmental websites.
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25
Recommendation
Seventh Report - The Role of Non-Execut…
Acknowledged
We recommend that departments’ registers of board members’ interests be published on GOV.UK, as well as included in departments’ annual reports and accounts. These should be published in a consistent format, updated every six months, and include any relevant non-financial and private interests. The Government Lead Non-Executive should monitor departments …
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We recommend that departments’ registers of board members’ interests be published on GOV.UK, as well as included in departments’ annual reports and accounts. These should be published in a consistent format, updated every six months, and include any relevant non-financial and private interests. The Government Lead Non-Executive should monitor departments to ensure that the governance statements of departments’ annual report and accounts provide sufficient clarity on how any real or perceived conflicts of interest are managed.
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Government response AI summary
The government agrees that a common and consistent format for registers of interests would be welcome but does not commit to the recommended frequency of six months or specific publication on GOV.UK, instead stating periodic publication via departmental websites.
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