Select committee: Public Administration and Constitutional Affairs Committee
Recommendation 1
Seventh Report - The Role of Non-Executive Directors in Government
Published 20 Jun 2023
Paragraph 18
Public Administration and Constitutional Affairs Committee The Role of Non-Executive Directors in Government All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
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.
From: Public Administration and Constitutional Affairs Committee, Seventh Report - The Role of Non-Executive Directors in Government (HC 318), paragraph 18, 20 June 2023
Government response
The government responded to the whole report on 8 September 2023 (deadline 1 September 2023).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government's response to the Committee's report is mixed: it agrees with some recommendations on transparency and appointments, and does not agree with others, including updating or replacing the Code by the end of the calendar year.
- On the Corporate Governance Code, the government "respectfully does not agree" that it should be updated or replaced by the end of the year; it "will consider" whether the Code "would benefit from some updates", wishing departments to "retain flexibility".
- It agrees that roles and responsibilities of non-executive board members and terms of reference should be published on departmental websites, and that departures from the Code should be reported in annual reports and accounts.
- On appointments, it says non-executive board member appointments are now regulated by the Commissioner for Public Appointments, a commitment it describes as "now been met". It does not agree that Peers should be restricted, and says an exclusion for former Special Advisers "would not align" with the Governance Code for Public Appointments.
- It does not agree that the Government Lead Non-Executive should act as a "quasi-regulator", and does not support routine publication of board minutes. It will "consider" the findings of the Governance and Accountability Review "in due course" once published.