Source · Select Committees · Public Administration and Constitutional Affairs Committee
Seventh Report - The Role of Non-Executive Directors in Government
Public Administration and Constitutional Affairs Committee
HC 318
Published 20 June 2023
Recommendations
1
Acknowledged
Para 18
Increase public accountability and clarity regarding non-executive board members' purpose and activities.
Recommendation
Non-executive board members were brought in in their current form in 2010 to “make Government operate in a more business-like manner”. However, it is unclear whether the corporate governance of Whitehall still sits at the centre of their purpose and …
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Government Response Summary
The government acknowledges the need for consistency and public accountability for NEDs, stating it has taken steps and will continue to embed this approach. Further adjustments will be considered alongside Lord Maude’s review, maintaining departmental flexibility, and guidance will be provided for Lead Non-Executives to support Secretaries of State.
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 …
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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.
22
Acknowledged
Para 72
Increase public availability of information regarding Non-Executive Director roles and responsibilities
Recommendation
Given that non-executives in Government departments, unlike their private sector equivalents, operate in an advisory capacity only, the Committee does not believe that NEDs should have more formal accountability to Parliament. However, there should be more information in the public …
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Government Response Summary
The government acknowledges the committee's feedback and states it will consider whether the Corporate Governance Code would benefit from changes to improve transparency around NEDs' roles and responsibilities.
25
Acknowledged
Para 75
Publish departmental board members' registers of interests and monitor conflict management clarity
Recommendation
We recommend that departments’ registers of board members’ interests be published on GOV.UK, as well as included in departments’ annual reports and accounts. These should be published in a consistent format, updated every six months, and include any relevant non-financial …
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Government Response Summary
The government agrees that a common and consistent format for registers of interests would be welcome but does not commit to the recommended frequency of six months or specific publication on GOV.UK, instead stating periodic publication via departmental websites.
Conclusions (3)
4
Conclusion
Acknowledged
Para 21
The Government’s commitment to review the appropriate role for NEDs and departmental boards, as part of the broader Governance and Accountability Review being led by the Rt. Hon. Lord Maude of Horsham, is welcome. However, the Committee is disappointed that it is now over five months overdue.
Government Response Summary
The government acknowledged the delay in Lord Maude’s Review of Governance and Accountability, stating that additional time was granted for full consideration, and the Cabinet Office expects to receive and publish the final findings in the near future.
7
Conclusion
Acknowledged
Para 38
Furthermore, the Committee considers that the power of NEDs, currently included in the Corporate Governance Code, to be able to recommend to the Prime Minister, Secretary of State, and Cabinet Secretary that the Permanent Secretary be removed from their post if they are deemed to be an obstacle to delivery, …
Government Response Summary
The government acknowledged that NEBMs are able to recommend the removal of a Permanent Secretary and affirmed that NEBMs adhere to the Seven Principles of Public Life, acting impartially and on merit.
24
Conclusion
Acknowledged
Para 74
We are concerned by the lack of consistency and transparency in how departments manage any real or perceived conflicts of interests. This includes a wide variation in how information is reported in departments’ annual report and accounts and a lack of transparency over non-financial interests.
Government Response Summary
The government agrees that a common and consistent format for registers of board members' interests would be welcome and notes that conflicts should be disclosed and managed internally, with public disclosure periodically via departmental websites.