Government non-executive director appointments not efficient, transparent or fair, PAC warns

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The Public Accounts Committee (PAC) does not have confidence that the public appointments process is efficient, transparent and fair. In a report published today, the PAC warns that the appointments process is not set up to encourage diversity amongst non-executive directors (NEDs), with a lack of transparency on requirements for political independence, and appointments for these roles taking far too long.

The role of a NED is to provide government departments and arm’s-length bodies with strategic leadership, by scrutinising performance, promoting transparency and taking a long-term perspective. The report finds that the Cabinet Office, which oversees all public appointments, has not set out a suitable level of political independence for NEDs. For the subset of NEDs that the Government collects data on, 3% have declared a political interest and this figure relies on candidates self-declaring conflicts of interest or donations to political parties.

The report finds there are no plans for new diversity targets or any convincing examples of how conscious or unconscious bias is dealt with in appointing NEDs. Also, ministers currently appoint selection panels , candidates are identified by the panels, with the final decision left to ministers. Without checks on bias, the report finds this way of appointing candidates could appear insular and circular.

The report further finds that it takes an unacceptably long time to make NED appointments. In 2022-23, only 7% of appointments were completed within the expected three months of a competition closing, with the average appointment taking over double this expected time, while nine took more than a year to complete, with the longest taking more than 400 days.

Delays in appointments can lead to vacancies on boards, which risks those boards not being able to function properly. Candidates may also drop out of the application process, take up posts elsewhere or be put off applying in the first place, with the Committee separately left unconvinced that current outreach activities are helping Government to recruit the best candidates for NED roles.

Chair's comment

Dame Meg Hillier MP, Chair of the Committee, said:

“Many non-executive directors do a fantastic job in providing independent challenge and strategic oversight on the boards to which they are appointed. But the appointment process is in a number of cases wanting in fairness and political independence. Too many selection panels are set up in a way which leads to a closed loop of people involved in the process – from the recruit panel members to those appointed. Government is falling short on best practice in other sectors.

Not enough is being done to ensure that these roles are fully representative of society at large. The process itself is unacceptably sluggish, with most waiting over six months to take up their roles. Given the significance of non-execs to any board on which they serve, the Government must also ask itself hard questions on whether it’s doing everything possible to attract the right and the best people for the job.”

Further information

• Inquiry: Non-executive director appointments
• Public Accounts Committee
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