Reducing the number of officialson Boards and
Creating the new position of leadnon-executive director for eachBoard.Lead NEDs will have a key role to play onthese new-look Boards. They will serve asa mentor and adviser to the Secretary ofState in his/her role as Chairman of theBoard. Lead NEDs will also be responsiblefor coordinating regular meetings with therest of the department’s NEDs. They willregularly liaise with the government-widelead NED (Lord Browne of Madingley),providing him with feedback on theperformance of the Board and itsmembers. Finally, lead NEDs will be askedto assist in the recruitment of new non-executives to their Board.The addition of lead NEDs todepartmental Boards will significantlyalter the nature of the relationshipbetween non-executives and PermanentSecretaries as the latter will no longerhave unilateral power of appointmentover the former, as was previously thecase.
Setting out a clear role for departmentalboards
While these structural reforms aim toimprove departmental governance, theyfail to resolve the core issue afflictingdepartmental boards – namely thatneither the government nor departmentshave yet set out whether these boards willbe supervisory or advisory in nature.The enhanced protocol sets out the mainareas of responsibility for Boards.However, the ambiguity over the extentto which Boards might be drawn intomatters of a political in nature rather,than focusing exclusively on executionand delivery of policy could lead toconfusion of roles.
The ambiguity of boards’ role indecision taking on policy and operationwill likely prove problematic.
This problem is reinforced by the absenceof corporate ownership which bindsboards together as a corporate decisionmaking body. There are few mechanismsin place to deliver the sanctions andrewards required to support corporatedecision-making. Under proposedarrangements, the Board will takeresponsibility for setting strategy andresource allocation. However, the Board’sability to do so will be impacted by thefact that policy decisions, whichnecessarily affect resources and strategy,will take place outside of the Board.
Identity crisis: advisory or supervisory?
Lord Browne and Francis Maude havedescribed the new-look Boards as beingboth advisory and supervisory
House of Commons Public AccountsCommittee,
Corrected Transcriptof Oral Evidence (To be published as HC 740-i),19 January 2011, Q3.
. Howeverthe protocol emphasises the former. As aresult, boards will need to clarify roles,