Recommendation 19

HM Government · verbatim extract Rejected

The responsibility for monitoring compliance lies with Principal Accounting Officers supported by Audit and Risk Assurance Committees. We believe that it would be unhelpful for the Government Lead Non-Executive to intervene in the process in a monitoring or enforcement role. Instead, the Government Lead Non-Executive should oversee the system and report themes in his or her annual report. The Audit and Risk Assurance Committee Handbook already provides advice and guidance on how best the committee can support the board in meeting its obligations. We are able to provide further advice and guidance to Audit and Risk Assurance Committees, in particular with respect to applying scrutiny and challenge. The Government Lead Non-Executive should provide a report on compliance with the Corporate Governance Code in the Government Lead Non-Executive Annual Report. This would cover all aspects of the Code, such as attendance at board meetings, whether fair and open recruitment practices have been followed, the management of conflicts of interest, and whether board effectiveness evaluations have been carried out. Information should be broken down by department and departments should also justify any departures from the Code in the governance statements of their annual report and accounts. (Paragraph 70) Future Government Lead Non-Executive Annual Reports will include a high level summary of disclosures made by departments in the governance statement of their respective annual reports. The effective use of departmental boards requires sufficient ministerial interest and regular scrutiny. Secretaries of State should undertake mandatory training, with the Prime Minister’s sponsorship, on their role chairing quarterly board meetings, how to work with NEDs, and how to run a departmental board effectively. Departments should also list specific actions that they are taking forward as a result of annual board effectiveness evaluations in their annual reports and accounts. (Paragraph 71) We believe that it should be Lead Non Executives, supported by 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. Many departments already include these details in their annual report and accounts and we will encourage all to do so.