Select committee: Public Administration and Constitutional Affairs Committee
Conclusion 11
Seventh Report - The Role of Non-Executive Directors in Government
Published 20 Jun 2023
Paragraph 50
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 ↗
Conclusion (the committee's words)
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.
From: Public Administration and Constitutional Affairs Committee, Seventh Report - The Role of Non-Executive Directors in Government (HC 318), paragraph 50, 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.