Source · Select Committees · Public Administration and Constitutional Affairs Committee
Recommendation 18
18
Acknowledged
Confirm consistent policy for Non-Executive Director numbers related to department size and remit
Recommendation
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
Government Response 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 year to define NED roles and tasks.
Government Response
Acknowledged
HM Government
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.