MPs launch inquiry to scrutinise government non-executive role
10 June 2022
The Public Administration and Constitutional Affairs Committee today launch a new inquiry into the role and regulation of departmental Non-Executive Directors. Non-executives are appointed by Secretaries of State to sit on the boards of government departments and provide challenge on departmental performance and delivery.
One of the areas the inquiry will consider is the trend towards ministers appointing political allies as non-executive directors. The Ministerial Code states appointees should be drawn largely from the commercial private sector. Last year the Institute for Government found that 20% of non-executive directors surveyed had political experience.
The Committee’s inquiry will also consider the lack of transparency on the role and activities of non-executive directors. The Government reinforced the role of non-executive directors in holding departments to account in its Declaration on Government Reform last year, yet there is no information available on their activities. The absence of independent regulation of the activities and appointment of non-executives, what work it is appropriate for them to undertake and how conflicts of interest are managed will also be examined.
Chair of PACAC William Wragg said:
“The Government point to non-executive directors as an important part of civil service governance, with the ability to wield considerable influence over departmental direction and delivery, yet there is little awareness of what they do.
“Several appointments have also raised questions about the appointment process itself and the absence of independent oversight.
“Our inquiry aims to shed light on the activities of non-executives and consider how they should be held accountable.”
Terms of reference
The Committee invites written submissions of no more than 3,000 words by Friday 29 July addressing any, or all, of the following points:
The roles and activities of non-executives
- What activities do NEDs undertake inside and outside departmental boards?
- Where do they add most value and how does this compare between Government departments?
- Do the roles of NEDs need to be more clearly defined?
Experience and expertise
- What backgrounds, skills and experience support an effective Government non-executive?
- Are there are gaps in experience in the current NED landscape, and how could can this be addressed?
- How can NEDs maintain objectivity in challenging departmental performance and delivery?
The appointments process
- How are NEDs appointed? To what extent is it “fair and transparent”?
- Should the appointments process be subject to tighter regulation, and if so, how?
- How are potential conflicts of interest managed?
Governance and accountability
- How are NEDs held to account and are the current accountability mechanisms sufficient?
- How could greater transparency be provided to the public on the activities of NEDs?
- How could success be measured?
- Should NEDs be subject to greater parliamentary oversight?
- To what extent is the Corporate Governance Code for departments fit-for-purpose?