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 AI-generated
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.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Acknowledged
HM Government · verbatim extract
Acknowledged
We will consider issuing guidance to departments regarding board composition. It will take into account how the board composition would naturally fluctuate because of appointments and retirements. We will not prevent departments from filling an identified gap because there are no spaces available. Boards need to be able to retain a good degree of flexibility depending on the needs and complexity of its department. This approach does not necessarily correlate to the size of a board, but to some degree of policy and delivery changes in departments. The Corporate Governance Code currently sets out an indicative approach to board composition stating that: “The boards will be balanced, with roughly equal numbers of ministers, senior civil servants, and non-executives from outside government”. The number of departmental ministers therefore provides an approximation for the number of expected NEBMs in each department. Governance and Accountability The Committee is concerned by the variability in board performance, the differing commitment of Secretaries of State in engaging with departmental boards, and examples of non-compliance with the Corporate Governance Code which are not being reported in departments’ annual reports as expected. We believe that the Government Lead Non-Executive should act as a de facto regulator of the NED system, and monitor compliance with the Code.
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