Source · Select Committees · Public Administration and Constitutional Affairs Committee
Recommendation 1
1
Acknowledged
Paragraph: 18
Increase public accountability and clarity regarding non-executive board members' purpose and activities.
Recommendation
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.
Government response summary AI-generated
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 support Secretaries of State.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
18
Government Response
Acknowledged
HM Government · verbatim extract
Acknowledged
The Government has taken steps over the last 18 months to improve consistency as part of our response to the Declaration of Government Reform. We will continue to embed this approach and make further improvements where needed. Any additional adjustments will be considered alongside any recommendations contained within Lord Maude’s Governance and Accountability Review. While a degree of consistency is helpful, it remains important for departments and Secretaries of State to have the flexibility to tailor their board to their own local circumstances, demands and priorities. While we agree with supporting Secretaries of State to make the most of the Boards, we believe that it should be Lead Non Executives, supported by non-executive board members (NEBMs) with experience of chairing boards of large organisations, who should be charged with supporting Secretaries of State to run effective boards and will provide supporting guidance. 2 Government Repsone The Government confirmed that the appointment of non-executive board members will become regulated in its response to the Committee for Standards in Public Life (CSPL) Standards Matter 2 report which was published and laid as a Command Paper in Parliament on 20 July.. The Corporate Governance Code is not fit-for-purpose as the main guidance document for NEDs, given it does not encompass all of their work in Government. It should be updated or replaced by the end of the calendar year to set out the key roles and tasks that a Government NED should undertake within the department, as well as any limitations to that. The new document should cover typical activities of NEDs both on and outside the departmental board setting.
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