Select committee: Public Administration and Constitutional Affairs Committee
Recommendation 6
Seventh Report - The Role of Non-Executive Directors in Government
Published 20 Jun 2023
Paragraph 37
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)
The Corporate Governance Code says NEDs will be “experts from outside Government”. However, we have highlighted examples in this Report of individuals that appear to have been recruited to NED roles from within Government or through personal connections. This includes examples of NED roles being a stage in 34 The Role of Non-Executive Directors in Government the careers of some Special Advisers or Ministers, and certain NEDs moving across to new departments with their Secretaries of State after machinery of government changes. Whilst this may relate to a relatively small minority of individuals, we remain concerned by the impact this may have on the ability for NEDs to provide effective challenge to Ministers and departmental boards, and the perception of such appointments on the public’s confidence in NEDs. We strongly believe that there should be a clear separation between the role of political or personal advisers and that of objective non-executive board members. If NEDs do not bring to departments genuine experience from senior positions in large and complex organisations outside Government and can offer independent challenge to departments, we are unclear of their purpose at all.
From: Public Administration and Constitutional Affairs Committee, Seventh Report - The Role of Non-Executive Directors in Government (HC 318), paragraph 37, 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.