NON-EXECUTIVE DIRECTORS:
A QUIET REVOLUTION
TRANSFORMING WHITEHALL
INSIGHT PUBLIC AFFAIRS
MAY 2013
www.insightpublicaffairs.com
FOREWORD
At Insight we endeavour to advance public policy. Our
government guides, mind maps and parliamentary publications
have all been well-received as informative and helpful
interventions that have provided clarity in areas of Coalition
policy. Since 2010, the Coalition government has been
operating at an ambitious pace. Given the efficiency challenges
facing government, it is evident that numerous new areas are
dominating the Coalition’s work programme. Under Francis
Maude’s leadership at the Cabinet Office, Departmental Boards
have been revitalised, whilst external Non-Executive Directors
(NEDs) have been recruited.
There has been an increasing interest in the work of NEDs, but
there has been an absence of a comprehensive guide to their
roles, responsibilities and profiles. We recognised that it is
necessary to showcase the important work that the NEDs have
been doing under their expanded role. We have also profiled the
NEDs and outline how departments are utilising their experience.
Perhaps more importantly, given the government’s wider
challenges around civil service reform and public sector
efficiency, we also wanted to highlight how much more they
could be doing and how much better their experience and
dedication could be utilised to effect real change throughout
Whitehall.
In his 2011/12 Annual Report, Lord Browne concluded “We are
not yet two years into this project, and it would strain credibility
to argue everything is perfect. Some Boards still face significant
issues around prioritisation and agenda setting, quality of
information, engagement by Junior Ministers and the calibre of
secretariat support. We are addressing these issues and moving
steadily in the right direction.” To this end, we have shared our
perspective on some of the successes and failures they have had;
make a number of recommendations about the ways their role
could be improved; and how Ministers and Civil Servants can
work together with the NEDs to give them a renewed sense of
purpose in Whitehall.
We hope that you find this report to be an interesting and useful
insight into a new world within Whitehall. We are certain that
this will not be the last we hear about these stars of business
and their work within Government. As always your feedback
would be appreciated at [email protected] or via the hashtag
#GOVTNEDS
Editor: Rob Fuller, Insight Public Affairs
Design: JSB Design, Bristol
KEY FACTS
• Non-Executive Directors (NEDs) are experienced,
senior, members of the private and voluntary
sector who have been appointed to serve on
Departmental Boards.
• Their purpose is to offer strategic advice, support
and scrutiny regarding the operations of their
Department.
• The role of NEDs was expanded as part of the
Government’s Enhanced Departmental Boards
initiative in 2010.
• There are approximately 60 NEDs in post, across 16
Government Departments.
• NEDs are appointed to serve three-year terms, with
the possibility of subsequent reappointment.
• Each Department has a “Lead Non-Executive
Director”, charged both with co-ordinating
the work of NEDs in that Department and with
encouraging joint working across Whitehall.
• Since 2010, four NEDs have resigned their
posts. One was appointed as a Minister, the
second stepped down to lead an inquiry into
banking standards, another retired due to work
commitments, and the last was appointed as Chair
of a body related to the Department in which they
had served.
• NEDs are offered an honorarium of around £15,000
a year, although many NEDs waive their salary.
• Our research has found that NEDs cost an
estimated £522,125 in honoraria in 2011/12. However
this does not factor in the additional cost in terms
of secretariat and other support services required
by NEDs as part of their work with Departments.
• 34% of NEDs are female, compared with 15.6% of
FTSE 100 Board Members.
• There were 102 meetings of the Enhanced
Departmental Boards (attended by the relevant
Ministers, senior civil servants and NEDs) across
Whitehall in 2011/12.
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INTRODUCTION
JOHN LEHAL
Managing Director,
Insight Public Affairs
T: 020 7824 1865
[email protected]
Twitter: @JohnLehal
#GOVTNEDS
What do the following have in common? Lord
Browne, Val Gooding, Baroness Hogg, Dame
Deirdre Hutton, Sam Laidlaw, Sir Callum McCarthy,
Dame Barbara Stocking and Andrew Witty. All
have enjoyed notable careers in business and
the voluntary sector, whilst engaging in a quiet
revolution transforming Whitehall as Government
Non-Executive Directors (NEDs).
The current NEDs were appointed in 2010 initially
to serve a three-year term. Their role is to support
as well as challenge the work of Government and to
advise on performance, operational issues and the
management of “their” Department. When asked
to describe the role of these Directors, Francis
Maude, the Cabinet Office Minister responsible
for Civil Service reform, said they “play a key role
in helping Departments rise to the challenge and
deliver further savings”. But this raises an important
question: are they management consultants at the
discount price of £15k a year, or are they playing
a more strategic role? Should they just focus on
savings, or are improved outcomes for the general
public more important? Is their role limited to
implementation, or should they be contributing to
departmental policy development and offering a
critique to test the operability of proposed policies?
Originally introduced by the Thatcher Government,
since 2010 the Coalition has sought to strengthen
the role of NEDs in the hope that they will enhance
the efficiency of Whitehall Departments. Their
expanded role has been accompanied by a greater
awareness of their position and responsibilities in
recent months.
4
Lord Browne of Madingley, the Government’s Lead
NED, evaluated their role in July 2012 before the
Public Administration Select Committee, giving his
fellow NEDs a two out of ten rating. Things have
improved somewhat since. In February 2013, Lord
Browne at a subsequent evidence session at the
Public Administration Select Committee said that he
was now rating the NEDs at four or five out of ten.
This is a very low threshold for a ‘vote of confidence’
and it is likely that in the commercial world few
NEDs would survive if their impact was assessed at
such a low level. Lord Browne’s stark assessment
highlighted the failure of Departments to utilise
these big hitters most productively. It was notable
that when Patrick McLoughlin needed an urgent
and independent assessment of the West Coast
Mainline Franchising, he went to Sam Laidlaw, the
Department for Transport’s lead NED, to do the job.
Guidance states that NEDs should operate
according to the recognised precepts of good
corporate governance in business: namely
leadership, effectiveness, accountability and
sustainability. Moving forward, there is arguably so
much more that could be done.
INTRODUCTION
LEADERSHIP:
The most significant new element of the remit
of today’s NED is the power to recommend to
the Prime Minister and the Secretary of State
the removal of a Permanent Secretary. Last
year’s Olympics security blunder, the West Coast
Franchising debacle, and the challenges around
implementation of Universal Credit have resulted in
senior civil servants being given an uncomfortable
ride, but at no point were their job in real
jeopardy. Next time there is a major blunder in a
Department, NEDs should ask themselves “what
would happen in the private sector”? A call to Sir
Jeremy Heywood, the Cabinet Secretary, could see
NEDs exercising this independent authority.
EFFECTIVENESS:
There is a need for an enhanced role for NEDs in
Departmental troubleshooting, as Sam Laidlaw has
proven. His report on West Coast Franchising has
been successful in delivering a thorough scrutiny
of Civil Service process, and resulted in major
reforms to rail franchising policy. Laidlaw’s report
represents a potentially major breakthrough for
the influence of a NED – visible and at the cutting
edge of Departmental management and political
reality. Secretaries of State would be well-served
by passing their hot potatoes to NEDs more often
for independent and objective advice.
ACCOUNTABILITY:
The Wright Reforms have enhanced and
strengthened the role of Select Committees in
recent years. “Pre-confirmation” hearings in
different guises are now held by a number of these
Committees, with major public appointments,
from the Governor of the Bank of England to the
Chairman of NICE, appearing in front of MPs.
Yet very few NEDs have been before their own
respective Select Committees, something they
could volunteer to do to provide an independent
assessment of their Department’s progress and
share their perspective on the its management,
as well as progress against delivery of the
Departmental Business Plan. Indeed, the visibility
of NEDs is, in general, very low.
SUSTAINABILITY:
Whereas their political masters are unlikely to look
beyond the next General Election, NEDs should be
taking a long-term view about what the Department
is trying to achieve and how it is getting there. NEDs
could leave a lasting legacy by showing determined
commitment to staff development as well as
to building capability in new areas, for example
business acumen and project management skills
amongst officials. A NED could well out-serve a
Secretary of State or Permanent Secretary, so they
need to keep an eye on the medium-term priorities
that the Department’s next generation of leaders
will inherit. An eye to the medium-term may also
give NEDs a role in analysing the effectiveness and
longevity of a Department’s policies. The importance
of providing institutional knowledge should also be
recognised. NEDs should play a role in ensuring that
the Department itself has succession planning in
place for both senior Civil Service posts and changes
amongst the NEDs themselves.
With the notable exceptions of Francis Maude
and Patrick McLoughlin, the risk is that the
government pays lip service to the NEDs; wheeling
them out as an example of external involvement
in the efficiency challenge, but giving them few
opportunities to make a greater contribution. More
significant involvement by NEDs thus far has been
limited to the cost-saving and troubleshooting
roles described above. Our research suggests that
some NEDs have only attended one or two Board
Meetings a year. Given the, at times, blistering
pace at which government has been moving, there
is a risk that this qualified, independent resource is
not being sufficiently tapped into.
To really understand the issues facing
departments, NEDs should have the opportunity
to meet staff and service users, through site visits
and stakeholder engagement. However, even the
Civil Service Reform Plan made only a couple of
passing references to the NEDs, so the potential of
their role must not become a missed opportunity.
This was partly the rationale behind writing this
report.
In an interview with Civil Service World, Lord
Browne said, “If there’s a chance of making the
way government works better by using some of
the techniques and learnings from business, then it
is worth doing.” Whilst I agree with Lord Browne’s
bleak assessment of the progress to date, I also
know there is a lot Government can learn from
the commercial and voluntary sectors through
the NEDs. As a result of enhanced leadership,
effectiveness, accountability, and sustainability,
NEDs have the opportunity to deliver the
reforming zeal the Government so needs and
indeed desires.
5
RECOMMENDATIONS:
IMPROVING THE NEDS SYSTEM
The post-2010 NEDs system is undoubtedly wellintentioned and if it works well it could lead to
lasting and effective change within Whitehall.
Based on our research and analysis, there are
a number of areas where the role of the NEDs
could be enhanced and improved. Some broad
guiding principles should be considered as part of
developing such an enhanced role:
• Involvement in policy development with an
opportunity to critique policy ideas and test their
operability.
•G
reater diversity of experience and background,
not just business sector expertise, but also
voluntary sector expertise, representatives from
smaller charities and businesses, and stakeholders
from the groups the departments serve: such as
head teachers, healthcare professionals and ViceChancellors.
•A
need to avoid being (or being perceived as)
political appointees or surrogate executives.
• Increased external visibility and accountability.
•C
learer terms of reference and expectations – not
solely based on the commercial sector but also
drawing on experience from the voluntary sector,
local government and non-departmental public
bodies.
INCREASE ACCOUNTABILITY
Select Committees have becoming increasingly
powerful and assertive in scrutinising the work
of Departments. Select Committees should host
an annual evidence session with “their” NEDs to
provide an in-depth and unvarnished perspective
on the running of the Department, and, to make
the role of the NED itself increasingly transparent.
The Public Administration Select Committee may
also wish to undertake a review of the expanded
Departmental Board and as well as the role and
impact of the NED system. Meanwhile, the Public
Accounts Committee invites Permanent Secretaries
and Senior Responsible Officers to give evidence
on Government projects and programmes. NonExecutive Directors should be invited to join witness
panels to explain the contribution they have mad
as well as their strategic role in delivering the
efficiency challenges facing the department.
LENGTH OF TERM
The Government should increase the term of office
a NED can serve, from three years to five years.
This would go some way towards depoliticising the
role and helping develop long-term relationships
between the Civil Service and NEDs. NEDs should
6
be appointed on a rotational basis, so that there
is an overlap between incoming and experienced
outgoing Directors. This will help to maintain
institutional memory and ensure continuity across
the system.
DIVERSITY IN APPOINTMENTS
The current NEDs includes a mixture of private and
voluntary sector appointees. However the majority
have backgrounds in large businesses or charities.
The NEDs system might be more valuable if a
wider range of appointments were made, including
more representatives from successful SMEs and
charities, as well as from government agencies and
local authorities. The Department for Education is
noteworthy as it has a Head Teacher serving as a
NED. Other Departments might also benefit from
the appointment of NEDs having a keen interest in
the policy areas for which they will be responsible,
thereby increasing engagement with service users,
stakeholders and technical experts.
AN INDEPENDENT ANNUAL REPORT
Since the 2010 reforms, NEDs have published their
own dispatches as part of the Departmental Annual
Report and Accounts. The intention was that these
would offer a critical account of the successes
and failures the Department had experienced
that year. In practice, however, these reports have
not offered much in the way of either analysis or
criticism. NEDs should be required to publish their
own, independent and objective, report each year,
separate from the Department’s formal one.
INVOLVE NEDS MORE WIDELY ACROSS
THE DEPARTMENT
Ministers would make better policy decisions if
they could draw on the insight NEDs give into the
capabilities and running of their Department. To
this end, all Ministers in a Department should be
required to attend Departmental Board Meetings,
alongside the Secretary of State. Junior Ministers
should also be further encouraged to meet with
NEDs on a regular basis. NEDs should additionally
be required to meet regularly with staff in their
Departments, particularly at sites outside of
Whitehall to enable greater engagement with users,
employees and other stakeholders. This will allow
them to gain a more detailed and wide-ranging
knowledge of their Department’s work.
RECOMMENDATIONS:
IMPROVING THE NEDS SYSTEM
ENHANCED ROLE IN TROUBLE-SHOOTING
APPOINTING AND APPRAISING SENIOR STAFF
Whilst NEDs can be relied on to handle
important and politically sensitive problems
within Departments, Secretaries of State and
their Permanent Secretaries should also ask their
Department’s Directors to evaluate and advise on
“difficult issues”. Their independent perspective
should ensure both an external, objective approach
and a renewed sense of purpose that might
otherwise be lacking. There should be greater
involvement of NEDs in policy development, with
a greater role played in critiquing policy ideas and
testing their operability.
The appointment of Permanent Secretaries
and Senior Civil Servants is overseen by the
Civil Service Commissioners, yet the guidance
they have issued does not include a formal role
for NEDs. While Departments that are looking
for a new Permanent Secretary often suggest
that NEDs are placed on the Appointment
Board, their place is not guaranteed. Even if a
Department recommends that NEDs are consulted,
Commissioners have the final say on the makeup of the Appointment Board. Giving NEDs a
formal role to work alongside the Civil Service
Commissioners in the recruitment of Permanent
Secretaries would ensure that appointees would
have the skills and competencies essential to
delivering the Department’s overarching strategic
goals. NEDs should also play a greater role
in appraising the performance of Permanent
Secretaries and other senior staff.
A WIDER LOOK AT THE EFFICIENCY AND
TRANSFORMATION AGENDA
Lead NEDs regularly meet to discuss areas of
joint working. However, given accepted existence
of Whitehall silos, this may not be enough to
encourage a greater efficiency across Government
or the introduction of changes necessary to deliver
the wider transformation agenda. The NEDs’
Network has had some notable successes, such as
the establishment of the Major Projects Leadership
Academy and the Whitehall Project Leaders’
Network. However, they could do much more to
ensure that the Government’s efficiency reforms
are being delivered and there are opportunities
to escalate leadership development, skills training
and best practice work being undertaken through
this forum. For example, NEDs could provide an
independent critique of Government procurement,
and audit the implementation of a work
programme aimed at improving practice in this
area. NEDs should also be encouraged to liaise with
their colleagues across Departments, as well as to
work with NEDs at other public sector bodies.
SUSTAINABILITY
There is a sense that the relationship between
civil servants and politicians is at an all-time low:
this is not helped by the at times intemperate
tone adopted by Ministers. NEDs can play a
role as “honest brokers” in improving those
relationships. As part of their role, NEDs should
focus on developing good practice amongst staff
and in particular among the next generation of
Civil Service leaders to ensure that the attitudes
and skills developed by officials are improved in
the long term. This will require NEDs to use skills
developed during years in the boardroom to
navigate the Civil Service’s tricky internal politics.
REVIEWING THE PERMANENT
SECRETARY’S OBJECTIVES
All Departments in Whitehall now publish their
Permanent Secretaries’ objectives annually,
and which include clear performance measures
for business delivery, corporate priorities and
capability-building. As part of the independent
reports proposed previously, NEDs should take a
role in evaluating and validating these objectives,
firstly to judge if a Permanent Secretary’s aims are
realistic and aligned with the Government’s own,
and secondly to analyse how well these aims have
been met.
MANAGING CONFLICTS OF INTEREST
Managing conflicts of interest are central to good
corporate governance, but there are examples of
NEDs not participating in discussions on topics in
which their outside employer has a commercial
interest. Despite the existence of some safeguards,
there may be an argument for the introduction
of more formal requirements. The Cabinet Office
could hold a central register of NED’s interests for
example, which would be publically available.
7
PERSPECTIVES
RT HON CAROLINE SPELMAN MP
Secretary of State for Environment,
Food and Rural Affairs, 2010-2012
As Secretary of State at the Department for Environment, Food and Rural Affairs, I had the task of setting
up a Supervisory Board to assist the good running of the department, which included NEDs from the
private sector. I sought a mix of skills amongst these NEDs to complement those of officials and ministers.
By this time we had a well-functioning management board of ministers and senior civil servants which had
already taken the key decisions as to where to make the required 30% savings to our running costs. But the
supervisory board helped us work through the implications of the reduced budget as well as some long
standing issues at the department, such as the difficulties with the Rural Payments Agency IT systems.
I sought three specific skill sets when appointing NEDs: delivery capability for large infrastructure projects,
IT systems knowledge, Third Sector engagement. After the second attempt of advertising for NEDs
(originally our net was too narrowly cast on the civil service website), we trawled up strong candidates. We
appointed a lead NED with all round experience of the private and public sector. The working relationship
between NEDs and the Department went from strength to strength as each NED adopted areas of the
department’s responsibilities and got to know the internal and external agencies involved. I chaired the
Supervisory Board on a bi-monthly basis and in between had meetings with the NEDs either separately
or together to talk offline about how things were going. This was an invaluable opportunity to sound out
an external view on the Department’s performance and where we needed to improve. The Board built
up such a strong relationship and trust that we held an away day out of London, where participants felt
comfortable to admit what was not working well and constructive ideas were provided for how to improve
the Department.
My views on the appointment of Permanent Secretaries are well known: I think that the Secretary of State
should have more say over the appointment by being a member of the selection panel. The Lead NED
could also provide useful insights to the selection process.
The NEDs are an important source of advice and help, particularly for the Secretary of State who has
limited time to delve into the day to day workings of every aspect of the departments operations. For
DEFRA in particular, which has 36 Arms Lengths Bodies and a very wide-ranging stakeholder group to
manage, the NEDs provided a very useful source of horizon scanning and trouble shooting. I think it would
have been interesting to meet NEDs from other departments to see how they operated and to share best
practice with other Secretaries of State.
8
PERSPECTIVES
BERNARD JENKIN MP
Chair,
Public Administration Select Committee
The primary concern of the House of Commons Public Administration Committee (PASC) is to scrutinise
the quality of leadership, governance and effectiveness of Whitehall Departments. We therefore take a
close interest in the role of Whitehall Non-Executive Directors (NEDs). Our main inquiry at present is on
the Future of the Civil Service. We are gathering evidence on the role of NEDs and lessons the civil service
can learn from the private sector. We also held an oral evidence session with the Government’s lead NED,
Lord Browne of Madingley.
There is a lack of clarity about the role of NEDs, not least because they have no fiduciary duties. This
leaves many NEDs wondering how they can contribute. In truth, they have a consultative and advisory
role, which depends upon the willingness of Ministers and their senior civil servants to involve them. They
should be able to play an important, mentoring role in improving the relationship between Ministers and
senior civil servants, and helping to inform departments about what they can learn from their experience,
particularly from the private sector.
NEDS should be in a position to expose the lack of appropriate, relevant and timely management
information in departments. Lord Heseltine told the Public Administration Select Committee that the
lack of management information means not just NEDs, but Ministers and senior officials have “no way of
knowing” what is going on in their departments.
Three other main areas have been identified in which NEDs might contribute to some of the big challenges
for government: strategic thinking – helping Government think long-term; commercial skills – which is often
lacking in Whitehall; and focus on the customer – as Government aims to involve the citizen in the delivery
of public services and devolve decision-making to the lowest possible level.
9
WHAT ARE GOVERNMENT
NON-EXECUTIVE DIRECTORS?
‘‘
‘‘
By appointing world-class leaders from outside government to Whitehall’s Departmental Boards
we have taken a hugely innovative and important step forward in realising the government’s reform
agenda and in using efficiency as a platform for growth.
LORD BROWNE, GOVERNMENT LEAD NON-EXECUTIVE DIRECTOR
The first NEDs were appointed in the early 1990s,
in the dying days of the Thatcher Government.
They were an innovation that stuck, as both
John Major and the Labour Government retained
the initiative. Their purpose at the outset was
simple to the point of vagueness. They were to
provide a sense of commercial purpose to Central
Government as well as to advise Departments on
how to act “more like the private sector”. However,
despite the presence of NEDs within Whitehall
over the past two decades, the Civil Service
continued to operate largely as before.
Since 2010, 60 NEDs have been appointed across
16 central Government Departments in Whitehall.
They have initially been appointed to serve
three-year terms, with the possibility of being
reappointed. Each NED is offered an honorarium
of £15,000 in exchange for their time (the same
amount offered to members of the Court of the
Bank of England). NEDs were initially expected
to commit between 15 and 25 days a year to the
position. However, many NEDs choose to waive
their fees and many exceed their contracted time
commitment.
The challenge of Civil Service reform was taken
up again by the Coalition after the 2010 General
Election. With the need for deep budget cuts
dominating the new Government’s fiscal agenda,
promoting efficiency within Whitehall became
an increasingly important objective. Tasked with
encouraging this reform, Francis Maude MP, the
new Minister for the Cabinet Office, looked once
more to the NEDs to offer a commercial insight
into how the Civil Service could be improved.
Maude appointed the former Group Chief
Executive of BP, Lord Browne of Madingley, as the
Government’s Lead Non-Executive Director and
together they began to expand the influence and
scope of NEDs across Government.
The enhanced role played by NEDs has gone
hand in hand with the greater empowerment of
Departmental Boards. Departmental Boards have
existed for a number of years, but their purpose
was never well-defined. As Lord Adonis pointed
out to the Public Administration Select Committee
in January 2013, he was barely aware of the
existence of the Board when he was a Secretary
of State for Transport and he was never invited
to one of its meetings. The role of NEDs has
expanded alongside the development of Boards
to include Ministers, in an attempt to create truly
joined-up thinking within Whitehall. Departmental
Board meetings are now chaired by their Secretary
of State, thereby directly increasing the level of
contact between NEDs and Ministers.
Many of the recently-appointed NEDs have
been drawn from large private enterprises, with
financial services, major manufacturers and
management consultancies all well-represented.
While this offers the Civil Service a wealth of
major commercial experience to access, it is not
representative of the wider economy, society or
the Department’s work. Departments may benefit
by drawing from a wider range of experiences, by
appointing NEDs from SMEs, a larger number from
charities and voluntary organisations, those with
local government experience and by appointing
some with a direct interest in the work of the
Department. Amongst Departments that have
achieved this is the Department for Education,
which appointed a leading head teacher as a NED,
as well as the Department for Environment, Food
and Rural Affairs which has appointed a number of
Directors with experience of environmental issues.
10
Further developments include the fact that NEDs
can now publish their own independent review in
the annual Departmental Report, giving them the
ability to publish an unvarnished and potentially
critical view of the running of the Department.
In practice, they have not exercised this right
to date, and the 2011/12 reports have not been
particularly noteworthy. They are often fairly
brief, simply including a summary of the work the
NEDs have done. There is very little in the way of
structured criticisms, whilst most Lead NEDs tend
towards positive comments and praise in their
Annual Reports, even when a Department would
be deemed to have struggled from an external
perspective over the course of a year.
WHAT ARE GOVERNMENT
NON-EXECUTIVE DIRECTORS?
Perhaps the most prominent development of the
2010 changes, however, is the NEDs’ ability to
recommend the removal of their Department’s
Permanent Secretary, the new “nuclear option”
for Directors. Again, this new power has not
been exercised to date. Whilst there have been
notable difficulties for some Departments, not
least the Olympics security blunder, the West
Coast Franchising debacle, and challenges with
implementation of Universal Credit, responsibility
for these may not have rested directly with the
Permanent Secretary, thus making it harder for
NEDs to hold them personally responsible for
the difficulties. This may be an area of particular
frustration for NEDs, as most private sector
organisations would strive to have clear chains of
command and accountability.
Beyond these basic roles, some NEDs have also
carved out their own niches. For example, Sam
Laidlaw, the Department for Transport’s Lead
NED was appointed to head a review into the
rail franchising process in light of the West Coast
Mainline controversy.
In June 2012 the Cabinet Office published the
broad and ambitious Civil Service Reform Plan.
The Plan commits the Government to encouraging
more joint working and sharing of services within
the Civil Service. NEDs also have a role to play
in this area. Since 2010 each Department has
had a “Lead Non-Executive Director”, whose
role is to co-ordinate the work of fellow NEDs
within their Department as well as to represent
their Department across Whitehall. Lord Browne
chairs a committee which brings together each
of the Lead NEDs. This committee meets at least
quarterly, takes a system-wide overview of Civil
Service reform and shares best practice across
Government. The NEDs Network also offers a
forum to bring together the NEDs and where they
can, consider efficiency and reform issues across
Whitehall. The NEDs Network may also offer a
good opportunity for Government NEDs to meet
with their counterparts across the public sector.
As the number of public sector services that are
delivered by arms-length body’s increases, there
is a good case for Government NEDs working
alongside and sharing ideas with their opposite
from Local Authorities, the NHS, Executive
Agencies and other Non-Departmental Public
Bodies on a regular basis.
‘‘
The generosity with which the NonExecutives are giving their expertise and
experience shows what government and
business can achieve by working together
towards the common goals of economic
growth, deficit reduction and public
service reform
RT HON DAVID CAMERON MP
‘‘
Whether this is due to the political appointee
nature of the NEDs themselves, a lack of real
engagement with the Department, or a fear of
offending their Civil Service colleagues is unclear.
It is also possible that this stems from a lack of
clarity as to the role and responsibilities NEDs
are supposed to fulfil. However, as the intention
was that these Annual Reports should offer a
critical account of the successes and failures the
Department concerned, NEDs should be required
to publish their own, independent and objective,
report each year, separate from the Departmental
Annual Report.
A number of NEDs are serving business figures,
which may raise concerns that they are using
their appointment as Directors simply as another
route to lobby departments. Whilst it is essential
that the NEDs do nothing to jeopardise their
independence, it is evident that there may be
a perception that they could use their role to
advance the interests of the company they work
for or their wider interests. Managing conflicts of
interest are central to good corporate governance
and Lord Browne sets out an example in his
2011/12 report whereby a NED at DEFRA did not
participate in discussions about the Thames Tunnel
given he also served as a Non-Executive Director
at Balfour Beatty. Despite these safeguards, there
may be an argument for more a formal system
of transparency to be introduced for NEDs. The
Cabinet Office could hold a central register of
NEDs’ interest, which would be publically available
as proposed earlier in this report. Furthermore,
if the Government recruited more NEDs from
organisations other than large private sector
companies, the perception that NEDs could be
used simply as another lobbying route would
diminish.
11
WHAT ARE GOVERNMENT
NON-EXECUTIVE DIRECTORS?
One suggestion for future appointments would
be to appoint the “recently retired” as NEDs.
There are a number of senior business figures that
have not been offered NED roles to date, despite
the wealth of experience they could offer. For
example from the private sector there is Tesco’s
Terry Leahy, Sir Rod Aldridge who founded
Capita, Mike Hodson, a former Chief Executive at
London Midland and Bupa’s Ray King. Meanwhile
Dame Liz Forgan, former Chair of Arts Council
England and Professor Mike Rawlins, former
Chairman of NICE have both stood down from
roles chairing major public bodies. Furthermore,
in recent months, Jan Ormondroyd has stepped
down as Chief Executive of Bristol City Council,
David Jenkins retired from Dorset Council as
has Caroline Tapster from Hertfordshire County
Council. Admittedly, some of these figures may
still have a vested interest the success of in their
previous employers, for example through share
holdings, whilst others may also have subsequently
started consultancy and other commercial
roles. This should not lead to them being
overlooked; it simply makes the development of
a comprehensive register of interests for NEDs all
the more important.
Government Departments have also not been
particularly discerning when choosing NEDs.
With the notable exceptions of the Department
for Education and Department for Environment,
Food and Rural Affairs, NEDs tend to have at best
a background in the policy within which they
are expected to work. While this may reduce the
scope for any accusations of any inappropriate
lobbying activity, it may also limit the effectiveness
of the NEDs. At the very least, it may take a
significant amount of a NED’s term to get up
to speed with the policy area before any major
changes can be implemented. The appointment of
some NEDs with relevant technical expertise and
practical experience could prove to be invaluable
in terms of enhancing Departmental efficiency.
Lord Browne publishes an annual report into
the performance of the NEDs over the previous
financial year. The report covers details such as
the number of Board meetings that have taken
place, as well as the tasks NEDs have been asked
to undertake within Government. Included in the
report are a number of “priority themes”. These
are general aims and targets for NEDs across
Government to try and achieve. Departmental
Boards also review their own performance annually
and the system will be externally reviewed every
three years.
12
Lord Browne’s 2011/12 Annual Report sets out that
the NEDs Network has collectively agreed on five
“priority themes” and three, more specific, “priority
areas” to define and inform their contribution to
Government:
PRIORITY THEMES
1. S
trategic Clarity – How do the aims of individual
Departments fit with the aims of the Government
in general? How can Departments reduce the
large number of priorities they currently have
into a smaller, more manageable and ultimately
more achievable amount?
2. C
ommercial Success – How can a Department
ensure it is both providing and receiving value
for money? How can a Department have a more
realistic view of “acceptable risk”?
3. T
alented People – How can the turnover
of talented staff within the Civil Service be
reduced? How can the “skills gap” within the
Civil Service be narrowed?
4. Results Focus – How can a Department
encourage a “performance management”
culture? Can Departmental Business Plans
better reflect what Departments actually do?
Can services be shared across Government and,
if so, how?
5. M
anagement Information – How can a
Department provide accurate information
relating to its performance and can this be
readily compared across Government?
PRIORITY AREAS
1. C
apability of Boards and Departments –
NEDs will act as “ambassadors for reducing
bureaucracy” and will aim to identify any work
undertaken by a Department that is either
unnecessary or duplicative. In addition to this,
they will advise on Civil Service Reform in
general, particularly by helping to evaluate the
effectiveness of Departmental Boards.
2. M
ajor Projects, Procurements and Commercial
Opportunities – The NEDs believe that they can
contribute to the growth agenda by improving
the delivery of major projects. In particular, they
will offer advice on risk management and on
how to make necessary cost savings.
3. M
anagement Information – NEDs will advise on
the development of useful, cross-Government,
management information the better to
understand the performance of Departments.
WHAT SUCCESSES HAVE NEDS HAD SO FAR?
‘‘
‘‘
One of the reasons I accepted this job was that I thought that, if there’s a chance of making the way
government works better by using some of the techniques and learnings from business – not making
government into business; that’s impossible and it’s wrong – then it is worth doing.
LORD BROWNE, GOVERNMENT LEAD NON-EXECUTIVE DIRECTOR
The enhanced role that NEDs now play only came
into being in 2010. In reality, the system was
not fully developed until much later. To Francis
Maude, the process of appointing 60 new NEDs
was “an exercise on the scale of appointing
FTSE 100 boards from scratch” and, as a result,
appointments were made slowly. The new NEDs
struggled to make an immediate impact. However
the NEDs Network brings together the Directors
to explore cross-cutting issues, and despite their
slow start, they have managed a number of pangovernment achievements since 2010.
THE MAJOR PROJECTS LEADERSHIP
ACADEMY AND WHITEHALL PROJECT
LEADERS NETWORK
One of the weaknesses in the Civil Service that
NEDs across Whitehall identified early on was
the lack of experienced officials capable of
delivering major projects successfully. Poor project
management experience and a lack of business
acumen have contributed to poor procurement.
For example, in 2011, the Government Major
Projects Portfolio covered over 200 projects with
a total value of around £400bn. Despite the huge
value and importance of these projects, only a
minority were delivered on time, on budget and at
the required level of quality. NEDs from a number
of Departments identified a lack of appropriate
skills and training for the Civil Servants responsible
for the delivery of such major projects. A high level
of turnover amongst key members of staff may
have been a cause of these failings.
To rectify this, NEDs have worked with the Major
Projects Authority to develop and launch a
new “Major Projects Leadership Academy”. The
Academy, based at the Oxford Saïd Business
School and operating in Partnership with Deloitte,
is training senior Whitehall leaders to improve their
ability to deliver on large and complex projects.
The first cohort of Academy students began their
programme in March 2012.
Alongside this, NEDs have supported the launch
of the Whitehall Project Leaders Network. The
Network allows Senior Responsible Owners and
Project Directors to share best practice and offer
each other support and advice on major projects.
The Whitehall Project Leaders Network held a
workshop for Permanent Secretaries, supported
by the Leadership Academy, in April 2012. Clearly
there are opportunities to escalate the leadership
development, skills training and best practice work
being undertaken through this initiative.
Civil service morale has been stubbornly low
in recent years, which the often adversarial
relationship between the government and officials
doing little to help. Consultant and recruitment
freezes remain in place, whilst headcount is
considerably down in departments. Taken
together, the Major Projects Leadership Academy
and Whitehall Project Leaders Network are going
some way to improving skills and capability,
whilst also enabling greater focus on the talent
management of key civil servants. In particular,
it will be important to manage the use of NEDs
carefully, not least to ensure it is clear that they
are not replacing the role played by senior Civil
Servants. Failure to do this may otherwise
negatively impact on Civil Service morale.
EXPANDING THE ROLE OF NEDS
The success NEDs have had is also reflected in the
expanded roles many of them have taken on. Some
NEDs have been entrusted with roles that go well
beyond their contracted duties. A good example
is Sam Laidlaw, Lead NED at the Department for
Transport who represented a major breakthrough
in the potential role and influence of the Directors.
In the days after the West Coast Mainline
franchising debacle, as the extent of the failings
became clear, the Secretary of State for Transport
Patrick McLoughlin turned to his NEDs in an
attempt to understand the circumstances leading
up to the debacle, and to prove he was tackling
the problem.
13
WHAT SUCCESSES HAVE NEDS HAD SO FAR?
Boards and support planning and delivery. We are
likely to see a continued push for improvement in
these areas.
Sam Laidlaw was chosen to lead an investigation
into the failings of the West Coast Mainline
franchising process, elevating him to a significant
position of influence. His report provided an
uncomfortably frank assessment of the failings of
the Department for Transport, particularly with
regard to inaccuracies and flaws in the franchising
process. As the dust settles, and the Government
clarifies its future plans for the specification,
procurement and management of franchises,
the involvement of Sam Laidlaw will be seen as
an important development in the way NEDs are
perceived within Departments.
All Departments in Whitehall now publish their
Permanent Secretary’s objectives annually. These
include clear performance measures for business
delivery, corporate priorities and capabilitybuilding. As part of their own Annual Report, NEDs
should have a role in evaluating and validating
these objectives, firstly to judge if a Permanent
Secretary’s aims are realistic and aligned with the
Government’s objectives and secondly to analyse
the degree to which these aims have been met.
It is well-recognised that Ministers arrive in
office ill-equipped for the challenges involved
in running government departments. Their
skill set will usually be political rather than
managerial, thus some Secretaries of State will
have limited experience of chairing the board of a
complex organisation. Similarly, Ministers will not
normally have the skills to handle complex policy,
management and implementation challenges.
Lord Browne suggests NEDs have a role to play in
sharing their experiences and for formal Ministerial
training to be introduced, including for Junior
Ministers aspiring to become Secretaries of State.
NEDs have been behind a renewed focus on
performance management, with a desire to
improve it across Departments as part of ongoing
business planning. There are clearly opportunities
to improve performance management across
Government, Executive Agencies and Arm’s
Length Bodies, which Lord Browne has detected
particular scope for improvement by joining up
back office systems. As part of this, NEDs have
recognised the need for improvements in the
provision of performance information, financial
data and risk management details to inform
14
OTHER DEPARTMENTAL SUCCESSES
Lord Browne’s 2011/2012 Annual Report provides
examples of the roles NEDs are playing in
their Departments. These include contributing
to greater strategic clarity and direction of
their Departments; unblocking hurdles facing
specific programmes; simplifying financial
reporting processes; securing priority for risk
management initiatives and providing perspectives
on acceptable risk tolerance levels for them.
Furthermore, the NEDs have facilitated visits to
their companies via, for example, the Department
for Business, Innovation and Skills Change
Programme and by acting as “change agents”.
In Lord Browne’s future Annual Reports, further
examples of successful initiatives will be provided.
‘‘
‘‘
The case of John Nash, a former NED at the
Department for Education, shows how far the
relationship between Directors, Ministers and
Departments can be taken. After a period as the
Lead NED at the Department, in January 2013 the
Prime Minister appointed Nash as a Junior Minister,
elevating him to the House of Lords (following the
promotion of Lord Hill to become Leader of the
House). It is now expected that Nash will play a
lead role in policy development at the Department.
The fact that this trust has been placed in a former
NED reflects well on the performance of the new
system as a whole, whilst also perhaps raising
potential questions about the independence of the
appointment system.
DWP’s Non-Executives have quickly got
to grips with our implementation and
leadership challenges, and are already
adding value.
ROBERT DEVEREUX, PERMANENT
SECRETARY, DEPARTMENT FOR WORK
AND PENSIONS
WHAT ARE THE CHALLENGES
FACED BY NEDS?
‘‘
‘‘
We are not yet two years into this project, and it would strain credibility to argue that everything is
perfect. Some Boards still face significant issues around prioritisation and agenda setting, quality of
information, engagement by junior Ministers and calibre of secretariat support.
LORD BROWNE, GOVERNMENT LEAD NON-EXECUTIVE DIRECTOR (WRITING IN 2012)
The new system of NEDs is by no means perfect,
as Lord Browne himself admits. The system faces
a number of challenges and it is questionable
whether the reforms introduced can be sustained
in the longer term. Furthermore, while some NEDs
have achieved considerable influence within their
Departments, others have failed to make much of
an impact at all.
There are some fundamental challenges facing
Departmental Boards of which NEDs with a
background in the business or voluntary sectors
may not have experience. There is operating
in a political context. As a result, Government
priorities can quickly change according to the
prevailing political agenda of the day. The 24hour news cycle plays its part, with an issue can
suddenly becoming a high priority. Related to this,
the government’s challenges are often “vertical”
given the silos even within individual Department,
whereas business will often be used to dealing
with those of a “horizontal” nature. Finally, there is
the sheer scale of the challenges facing the public
sector, which means that the number of priorities
are likely to be far higher for Departmental
Boards than for a business or charity. Despite
this, with many complex challenges, there are
still areas where NEDs can contribute to strategic
thinking, prioritisation, planning, resourcing, policy
development as well as review, implementation,
delivery and audit. What is clear is that the
independent, external experience of NEDs will
ensure both an outsider’s, objective perspective
and a perception of efficiency that may be quite
difficult from a civil servants view. There is an
opportunity to involve NEDs more heavily in policy
development, not least by critiquing policy ideas
to test their operability.
VISIBILITY AND ACCOUNTABILITY
There is also a significant challenge to be met in
terms of increasing visibility and accountability.
Select Committees have become increasingly
powerful and assertive in scrutinising the work of
Departments. Select Committees could host an
annual evidence session with their Departmental
NEDs. These sessions could provide an in-depth
and unvarnished perspective on the running of the
Department they scrutinise and make the role of
the NED itself increasingly transparent. The Public
Administration Select Committee may also wish to
undertake a review of the expanded Departmental
Board and NED system, while there would be a
case for an annual review of the role and impact of
Directors by the same body. Elsewhere, the Public
Accounts Committee already invites Permanent
Secretaries and Senior Reporting Officers to
give evidence on Government projects and
programmes. NEDs should be invited to join these
witness panels to explain the contribution they
make, as well as their strategic role in delivering
the efficiency challenges facing the Department.
HOW SUSTAINABLE WILL THE REFORMS
INITIATED BY NEDS BE?
First and foremost, NEDs are political appointees
serving a three-year term. This raises questions
about the long-term effectiveness of a NED. Over
three years, it is perhaps likely that the Secretary
of State who appointed a NED will have left
their job, either to go to another Department
or to return to the backbenches. This could
leave a NED without the political cover they
might reasonably expect. For example, in the
September 2012 reshuffle, eight Departments
experienced a change of their Secretary of
State. Likewise, between 2011 and 2013, nine of
the sixteen departments had new Permanent
Secretaries. This places NEDs in an unenviable
position. When trust and track record are key,
does the endless churn of Permanent Secretaries
and Secretaries of State lend themselves to
sustained relationships? Furthermore, can NEDs
develop a long-term reform programme without
the guarantee of political support, particularly
when the officials running the Departments the
Directors are trying to change are almost certain
to outlast them? Many NEDs have led large
commercial and voluntary organisations through
change management programmes, reorganisations
and mergers, as well as overseen major projects.
Their experience and understanding of strategic,
15
WHAT ARE THE CHALLENGES
FACED BY NEDS?
complex challenges should be invaluable, yet the
long-term impact they may have remains unknown.
To draw on this reserve of experience, the term
of office a NED can serve should be increased
from three years to five years. If adopted, such a
change would go some way towards depoliticising
the role and to helping develop better long-term
relationships between the Civil Service and NEDs.
NEDs should be appointed on a rotational basis,
so that there is an overlap between incoming and
departing Director’s. This will help to maintain
institutional memory and ensure a greater sense of
continuity across the system.
DO NEDS HAVE ENOUGH POWER OR
INFLUENCE TO EFFECT REFORMS?
The lack of “longevity” described above leads on
to a second problem with the NEDs system. NEDs
have an advisory role only. On commercial and
voluntary sector boards, NEDs have considerable
power and influence. The current Departmental
NED role seems somewhat confused, on the one
hand wanting to import best practice from the
private sector but on the other, only having the
ability to apply their commercial experience in a
selective manner. A NED has political influence
but no real power. Should they feel ignored or
consider that their Department is failing, they
have the following options: resign; talk to the
media or write a critical report to be published in
the Departmental Annual Report; or, recommend
the removal of the Permanent Secretary, the socalled “nuclear option”. This power is however
severely limited. A resignation or the submission
of a critical report is only a powerful tool if people,
particularly, the media, listen. Given the lack of
visibility NEDs currently enjoy, the media impact
of a resignation, for example, may well be limited.
Furthermore, should a NED recommend the
removal of the Permanent Secretary, it would be
up to the Secretary of State actually to make the
decision to terminate their employment.
With these very limited powers, the role a NED can
play in developing long-term, strategic, change
within the Civil Service will remain highly limited.
This raises questions about the NEDs system as
a whole. Without extra powers, they may not be
able to effect reform, but with additional powers
they risk becoming more “Executive” than “Non”,
a potentially dangerous and counter-productive
change. NEDs could play a role in genuine reforms
if they had more real power, such as the chance
to formally appraise the Permanent Secretary
and other senior civil servants on regularly
or even involvement in their recruitment. All
16
Permanent Secretaries’ objectives are now
published annually and include clear performance
measures for business delivery, corporate priorities
and capability building. As part of their Annual
Report, NEDs should evaluate and validate these
objectives, firstly to judge if the aims set for a
Permanent Secretary are realistic and aligned with
the Government’s own and secondly to analyse if
they have been met.
THE DIFFERENT ROLES NEDS PLAY
ACROSS WHITEHALL
Since 2010, NEDs have played substantially
different roles depending on the Department
within which they work. It appears that some
Departments have placed NEDs at the heart
of decision-making and reform: in one case a
seamless transition has been made from NED to
Minister yet they could make greater impact. The
reasons for this need to be better understood. If
the Prime Minister and Cabinet Secretary want
improved Departmental governance based
on effective contributions from NEDs these
variations in performance need to be addressed.
Lord Browne committed in his 2011/12 Annual
Report to have Boards regularly assess their own
performance to make sure that their roles (and
the work of NEDs) are improving and adapting in
line with the rest of the Department they oversee.
Barriers to the greater involvement of NEDs could
also be assessed as part of this initiative.
Figures released in 2012 showed that between
the introduction of the new NEDs system in
2010 and mid-2012, the Department of Transport
had held 15 Departmental Board meetings that
had been chaired by the Secretary of State and
attended by its NEDs. By contrast, the Foreign
& Commonwealth Office held two meetings and
HM Treasury just one in the same period. Whilst
participating in Departmental Board Meetings is
only one element of a NEDs role, it does suggest
that the influence wielded by those in these last
two Departments may be limited. Again, this
raises questions about the role the Government
wishes NEDs to play. In Departments such as
the Foreign & Commonwealth Office, diplomatic
and policy experience may be considered far
more valuable than that of a commercial nature.
That said, with an ambitious programme to
rationalise elements of the Diplomatic Service and
an intensive change management programme
in place, including the achievement of a 20 per
cent reduction in UK based staff by 2015, it
would have been an opportunity for the Foreign
Secretary to more closely involve Sir Richard
WHAT ARE THE CHALLENGES
FACED BY NEDS?
Lambert, Rudy Markham and Julia Bond in the
Department’s restructuring. Likewise, given
the overarching austerity challenges facing the
Government, the absence of economic growth,
and the impending comprehensive spending
review, it is regrettable that the Departmental
Board at the Treasury only met on one occasion in
2011/2012. It would be useful if there was a general
expectation across Whitehall about the frequency
and purpose of these Board meetings to ensure
that an appropriate level of scrutiny is provided
across Government. This should remain just an
expectation, however, as any firm commitment
would not allow Department’s to use Boards
and NEDs flexibly or necessarily in the most
efficient way in terms of a particular organisation’s
objectives.
DIVERSITY OF NEDS
The current NEDs include appointees with private
and voluntary sector experience. However the
majority have backgrounds in multi-national
business or large charities. The NEDs system may
be more valuable if a wider range of appointments
were made, drawing more representatives from
successful SMEs, charities and other entities.
The Department for Education is noteworthy
in having a head teacher serving as a NED.
Other Departments may also benefit from the
appointment of NEDs with a keen interest in the
policy areas for which they will be responsible.
‘‘
“In my day, we had a board. I never
attended it. I was never invited to attend it,
even though I was Secretary of State, and
I had no idea who the Department’s nonexecutive directors were, although there
were some non-executive directors. This is
clearly no way to run an outfit
‘‘
LORD ADONIS, FORMER SECRETARY
OF STATE FOR TRANSPORT
(GIVING EVIDENCE TO THE PUBLIC
ADMINISTRATION SELECT COMMITTEE,
JANUARY 2013)
WEAKNESSES WITHIN DEPARTMENTAL
BOARDS
The new NEDs also identified a number of
problems with the way Departmental Boards
operate, which have since been rectified. When
the latest batch of NEDs took office in 2010, they
had two key complaints. Firstly, many felt that
any changes they suggested would be resisted
by the Civil Service and that the secretariat
support they received was limited and not fit for
purpose. Secondly, many expressed concern that
Junior Ministers had very little engagement with
the management of the Department. These are
serious issues and undermine the concept and
potential utility of having NEDs on Departmental
Boards.
While Lord Browne told the Public Administration
Select Committee in February 2013 that many
Departments had made an effort to involve Junior
Ministers more at Board meetings and in the running
of the organisations in general, this is still an issue
of concern that requires resolution. The Enhanced
Departmental Board Protocol published by the
Cabinet Office in 2010 made clear that Ministers
should be members of Departmental Boards, but
there is no formal requirement for them to attend
or indeed to play any major role in the Board’s
operations. This denies both NEDs and members
of the ministerial team the opportunity to engage
with each other on a regular basis or to introduce
the commercial attitude that Directors are supposed
to bring to the table. Furthermore, as Lord Browne
stated in his 2013 report: “Ideally all Ministers on
the Board would routinely attend Board meetings –
where this is happening Departmental strategy and
delivery benefit from the alignment of the political,
official and Non-Executive leadership”.
BOARD EVALUATIONS
Best practice in corporate governance would
suggest that periodic independent reviews of
the effectiveness of boards should take place.
Departmental Boards should be no exception and,
positively, annual reviews are now being overseen
by Lead NEDs. These critiques of the effectiveness
of Boards and the identification of areas for
improvement need to be published and the
lessons learnt so that Boards and the role of NEDs
can be adapted accordingly. Lord Browne in his
2012/13 Annual Report (due in mid- 2013) should
include his assessment of this audit exercise and
should also seek to agree with the Cabinet Office
a programme of work to improve the effectiveness
of Departmental Boards and NEDs.
17
DEPARTMENT
NUMBER OF
NEDS
NUMBER
OF BOARD
MEETINGS
(2011/12)
COMPENSATION
(2011/12)
NUMBER
OF BOARD
MEETINGS
(2010/11)1
COMPENSATION
(2010/11)1
Cabinet Office
4
7
£11,250
3
£0,000
Department
for Business,
Innovation and
Skills
5
6
£12,500
1
£25,000
Department for
Communities
and Local
Government
4 (+1 retiree)
7
£26,478
-
£10,834
Department for
Culture, Media
and Sport
2 (+1 retiree)
5
£57,500
-
£25,000
Department for
Education
2 (+ 2 retirees)
10
£15,000
-
£3,750
Department
of Energy and
Climate Change
3
2
£41,000
1
£19,000
Department for
Environment,
Food and Rural
Affairs
4
6
£27,500
-
-
Department for
International
Development
2
3
£39,897
-
-
Department for
Transport
4
15
£67,500
9
£72,500
Department
for Work and
Pensions
4
4
£6,000
-
£75,000
Department of
Health
5
5
£35,000
-
£54,979
Foreign and
Commonwealth
Office
4
2
£25,000
-
-
Her Majesty’s
Treasury
4
1
£27,500
-
£27,500
Home Office
4
6
£57,500
-
£30,000
Ministry of
Defence
3
8
£30,000
-
£87,500
Ministry of
Justice
4
14
£42,500
-
£15,000
58
(+4 retirees)
101
£522,125
14
£446,063
Total
1
Many Enhanced Departmental Boards were only formed in the final quarter of the 2010/11 financial year.
18
DEPARTMENTAL PROFILES
Departmental profiles and biographies of the Lead Non-Executive Directors and Non-Executive Directors
for each Department have been developed through a combination of publically available information and a
series of Freedom of Information Requests.
CABINET OFFICE
The Cabinet Office currently has 4 Non-Executive Directors, including Lord Browne, who is also the Government’s
Lead Non-Executive Director. According to Lord Browne’s 2011/12 report into the work of NEDs, the Cabinet
Office Departmental Board met 7 times under the new Governance arrangements, ranking them joint 6th of
16 Departments. The Cabinet Office has played a fundamental role in leading on both civil service reform and
improving efficiency in Government procurement, putting the NEDs at the Department at the heart of reform.
LORD BROWNE OF MADINGLEY
Lead Non-Executive Director/ Government Lead Non-Executive Director
Lord John Browne was appointed as the Government’s Lead Non-Executive Director,
as well as Lead NED for the Cabinet Office, in June 2010. In this role, he leads the NonExecutive Director programme and chairs the Committee of Lead NEDs, which takes a
strategic overview of the whole Civil Service reform plan.
Browne was appointed as a Crossbench peer in 2001, as one of the first non-partisan
“peoples peers”. As such, he sits as a crossbencher and has no public political affiliation.
He has had a long career in the private sector, currently working in the private equity
industry. He was Chief Executive of BP for over a decade, resigning in 2007. He was also
the author of the Browne review into university funding, which led to the recent increase
in university tuition fees. Browne is entitled to a fee of £20,000 for his role as a Lead NED.
However he has waived this fee each year he has been entitled to it.
DAME BARBARA STOCKING DBE
Non-Executive Director
Barbara Stocking was appointed as a NED in December 2010. She had been Chief
Executive of Oxfam GB since 2001, leaving her position in February 2013. At Oxfam, Dame
Barbara played a prominent role in pressing the New Labour Government to become the
“most charitable Government ever”, claiming responsibility for Blair and Brown’s antipoverty focus at the G8 and elsewhere. She was made a Dame in 2008.
Stocking is entitled to a fee of £15,000 for her role as a NED. She waived her fee in 2010/11
but was paid a fee of £11,250 in 2011/12.
IAN DAVIS
Non-Executive Director
Ian Davis was appointed as a NED in December 2010. Previously, he was Managing
Director of management consultancy McKinsey & Company between 2003 and 2009. He
retired in 2010. He is currently a board member of BP. Davis is entitled to a fee of £15,000
for his role as a NED, however he has waived this fee each year he has been entitled to it.
RONA FAIRHEAD
Non-Executive Director
Rona Fairhead appointed as a NED in December 2010. She was previously the Chief
Executive of the Financial Times Group, leaving the company at the end of 2012 after more
than a decade. She previously held similar roles at ICI and Bombardier. Fairhead is entitled
to a fee of £20,000 for her role as a NED. However she has waived this fee each year she
has been entitled to it.
19
DEPARTMENTAL PROFILES
DEPARTMENT FOR BUSINESS, INNOVATION AND SKILLS
The Department for Business, Innovation and Skills currently has five NEDs. The Departmental Board met 6
times to the end of the 2011/12 reporting year, ranking them 7th out of 16 Departments. BIS has faced a number
of challenges since 2010 as the economy continues to stagnate. Secretary of State, Vince Cable, along with
Lord Heseltine, have called for the development of a more pro-active industrial strategy. However, this has not
received widespread support throughout the Coalition. This places a number of particular pressures on NEDs at
BIS, as they have to navigate the tricky political waters within the Department while considering the effect their
efficiency programmes will have on both the work of Government and on economic growth.
SIR ANDREW WITTY
Lead Non-Executive Director
Sir Andrew Witty was appointed as Lead NED in December 2010. He has been CEO of
GlaxoSmithKline (GSK) since 2008, having first joined the company as a management trainee
in 1985. As well as his role as a NED, Sir Andrew has had advisory roles with the Governments
of China, Singapore and South Africa. He is also President of the European Federation of
Pharmaceutical Industries and Associations and Chancellor of the University of Nottingham.
Sir Andrew has not received a fee for his work as a NED since his appointment in 2010.
ALAN AUBREY
Non-Executive Director
Alan Aubrey was appointed as a NED in July 2012, but held the position on a temporary
basis from April of the same year. Alan is the Chief Executive Officer of IP Group plc, a
company that invests in and builds technology businesses based on intellectual property
originating from universities and other research intensive institutions. There is currently no
information on the fee, if any, Mr Aubrey receives for his work as a NED.
PROFESSOR DAME JULIA KING
Non-Executive Director
Professor King has been a NED since January 2008. She is currently Vice-Chancellor of Aston
University, following a career in academia and at Rolls Royce. She has also held a number
of Government advisory positions, including being a member of the Ministerial Group
on Manufacturing, the Committee on Climate Change, and the National Security Forum.
Professor King has received a fee of between £10,000 and £15,000 for her role as a NED in
both 2010/11 and 2011/12.
DALTON PHILLIPS
Non-Executive Director
Dalton Phillips was appointed as a NED in May 2012, following the death of Dr Brian WoodsScawen. Mr Phillips is currently Chief Executive of Morrisons, a position he has held since
March 2010. He has had a long career in retail, working for major companies across the globe.
There is currently no information on the fee, if any, Mr Phillips receives for his work as a NED.
DALE MURRAY
Non-Executive Director
Dale Murray was appointed as a NED in January 2013. She previously founded Omega
Logic, a business which revolutionised the process for “topping-up” pay-as-you-go mobile
phones. Currently, she is an “angel investor”, supporting new business start ups in the UK.
There is currently no information on the fee, if any, Mrs Murray receives as a NED.
20
DEPARTMENTAL PROFILES
DEPARTMENT FOR COMMUNITIES AND LOCAL GOVERNMENT
The Department for Communities and Local Government currently has four NEDs. Additionally, Stewart
Gilliland, acting Managing Director at Fox’s Biscuits, was one of four people to have been appointed as a
NED and to have subsequently resigned his post. According to Lord Browne’s 2011/12 report into the work
of NEDs, the Department for Communities and Local Government Departmental Board met 7 times under
the new Governance arrangements, ranking them joint 6th of 16 Departments. The priorities at DCLG
and the priorities of NEDs are closely aligned, as the Department looks to streamline and localise as many
services as possible in a bid for greater efficiency and improved service delivery.
SARA WELLER
Lead Non-Executive Director
Sara Weller was appointed as a Lead NED in December 2010. She was previously Managing
Director of Argos, leaving the role in June 2011 after 7 years. She is currently a member of the
Higher Education Funding Council for England’s Enterprise and Skills Advisory Committee.
She had previously held senior roles at Sainsbury’s, Mars and the Abbey National. Ms Weller
was paid £5,806 for her role as a Lead NED between 1 December 2011 and 31 March 2012.
STEPHEN HAY
Non-Executive Director
Stephen Hay was appointed as a NED in May 2009. He is currently Chief Operating Officer
at Monitor, the independent regulator of NHS Foundation Trusts. Prior to joining Monitor,
Mr Hay worked in financial services, latterly as a Director of KPMG. Mr Hay received a fee
of £10,000 for his work as a NED in 2011/12.
DIANA BRIGHTMORE-ARMOUR
Non-Executive Director
Diana Brightmore-Armour was appointed as a NED in February 2011. She joined the Department
after a long career in financial management, including 13 years at Coca-Cola, where she acted as
Group Treasurer. She was also CEO of Corporate Banking at Lloyds Banking Group from 2004 to
2012. Ms Brightmore-Armour received a fee of £7,500 for her work as a NED in 2011/12.
NICK MARKHAM
Non-Executive Director
Nick Markham was appointed as a NED in January 2013. Alongside his work as a NED, Mr
Markham is CEO of Top-Up TV, the first successful pay TV operator on digital terrestrial
television. Prior to founding Top-Up TV, he worked for companies such as Laura Ashley
and ITV. There is currently no information available on the fee, if any, Mr Markham will
receive for his work as a NED.
STEWART GILLILAND
Former Non-Executive Director
Stewart Gilliland was appointed as a NED in December 2011. He retired in February
2013, making him one of four NEDs to leave his post since the introduction of enhanced
Departmental Boards. He retired to focus on his other business interests, including his new
role as acting Managing Director at Fox’s Biscuits. He had previously spent four years as Chief
Executive of Müller UK and Ireland. Mr Gilliland received a payment of £3,172 for his work as a
NED during 2011/12.
21
DEPARTMENTAL PROFILES
DEPARTMENT FOR CULTURE, MEDIA AND SPORT
The Department for Culture, Media and Sports currently has only 2 NEDs, a comparatively low number
across Government. The Department previously had three NEDs. However Sir Peter Bazalgette left his
post to take up a new role as Chairman of the Arts Council, which required him to step aside due to the
Department’s links with the Council. The Department held five Board meetings to the end of 2011/12,
ranking them joint tenth out of sixteen Departments. This below-average level of engagement is
particularly notable, considering the challenges to Department have faced in delivering both the Olympic
Games and significant reform to the media. Had the NEDs been more closely involved, perhaps issues such
as the lack of available security staff for the London Games would have been foreseen and avoided.
DAVID VEREY CBE
Lead Non-Executive Director
David Verey was appointed as a Lead NED in December 2010. He spent his career in
investment banking, joining Lazard Brothers in 1972. He became chairman of the bank
in 1990, leaving the post in 2001. He is also Chairman of the Trustees of the Art Fund, a
role he has held since 2004, and is also a director of Daily Mail. He was also Chairman of
Blackstone UK between 2004 and 2008.
Mr Verey received a payment of between £20,000 and £25,000 for his work as a Lead
NED in 2011/12 and received a payment of between £5,000 and £10,000 for the part-year
he was in the role in 2010/11.
DR TRACEY LONG
Non-Executive Director
Dr Tracey Long was appointed as a NED in February 2011. She is an academic with whose
specialism is company management. She acts as a an Executive and Non-Executive
director of more than 20 listed and unlisted UK companies and she is also a Senior Visiting
Fellow at the Cass Business School in London. Dr Long founded the magazine Boardroom
Review in 2004.
Dr Long received a payment of between £15,000 and £20,000 in 2011/12 and a payment
of between £5,000 and £10,000 in 2010/11 for her role as a NED.
SIR PETER BAZALGETTE
Former Non-Executive Director
Sir Peter Bazalgette was appointed as a NED in February 2011. However, he resigned in
order become Chairman of the Arts Council. Sir Peter was Chief Creative Officer of TV
company Endemol from 2004 to 2007. In this role he was responsible for bringing Big
Brother to the UK and for creating several television formats including Ready Steady
Cook, Changing Rooms and Ground Force. Alongside his new role at the Arts Council,
Sir Peter is Deputy Chairman of English National Opera, President of the Royal Television
Society and writes a food column for the Financial Times.
Sir Peter received a payment of between £15,000 and £20,000 for his role as a NED in
2011/12, prior to his resignation.
22
DEPARTMENTAL PROFILES
DEPARTMENT FOR EDUCATION
The Department for Education currently has two NEDs, down from four at the start of 2012. This is due to the
appointment of John, now Lord, Nash as a Minister within the Department and the departure of Anthony Saltz,
the Lead NED, who left to lead an inquiry into baking practices at Barclays. The appointments made by Michael
Gove MP, Secretary of State for Education, were amongst the most controversial of all NED appointments. This
was due to the close links between the new NEDs and the Conservative Party. Lord Nash was a major donor
to the party and Theodore Agnew had played a role in the development of Gove’s education policies while in
opposition through his work at Policy Exchange. While some have criticised the close political links between
some NEDs and the Secretary of State, their relatively high level of policy interest may have been helpful to a
Department attempting to create major change within the education system. The Departmental Board met ten
times to the end of 2011/12, ranking the department third of sixteen Departments.
THEODORE AGNEW
Non-Executive Director
Theodore Agnew was appointed as a NED in March 2011. He has held a wide variety
of business positions over his career, including a number of years as CEO of Jubilee
Managing Agency Ltd, a provider of insurance products. He was a founder of Somerton
Capital LLP, a private equity company and is a trustee of both the Policy Exchange and
the New Schools Network. Mr Agnew did not receive any payments for his role as a NED in
2010/11 or 2011/12.
DAME SUE JOHN
Non-Executive Director
Sue John was appointed as a NED in March 2011. She has been a prominent figure in
education since her appointment as Head Teacher of Lampton School in Hounslow in 1997.
Lampton was considered to be a failing school however under Sue’s leadership the school
has become one of OFSTED’s “12 outstanding schools”. Sue is also a member of the Future
Leaders’ Project Board and of the DFE’s Secondary Headteachers’ Reference Group.
Dame Sue received a payment of £15,000 for her role as a NED in 2011/12 and was paid
£3,750 for her work in 2010-11.
LORD JOHN NASH
Former Non-Executive Director
John Nash was appointed as a NED in 2010. He entered the field of education after thirty years
as a venture capitalist when he founded Future, a charity designed to support small charities and
other social enterprises that aimed to help children. Prior to being appointed as a NED, he was
also a notable donor to the Conservative party during its period in opposition. He was created a
life peer In January 2013, in order to take up a ministerial role within the department.
ANTHONY SALZ
Former Lead Non-Executive Director
Anthony Salz was appointed as a Lead NED in December 2010. A renowned solicitor, Mr Salz was
Acting Chairman of the BBC Governors before the Governors were replaced by the BBC Trust in
2007. In July 2012, he left his role as a NED when he was appointed to lead an independent review
into culture and practices at Barclay’s bank following the company’s implication in the Liborrigging scandal. Mr Salz is also a trustee of the Scott Trust, the Trust which owns the Guardian. Mr
Salz did not receive any payments for his role as a NED in 2010/11 or 2011/12.
23
DEPARTMENTAL PROFILES
DEPARTMENT OF ENERGY AND CLIMATE CHANGE
The Department of Energy and Climate Change currently has three Non-Executive Directors. In 2011/12,
the Departmental Board met just three times, making them joint fourteenth out of sixteen Departments.
This poor performance is particularly noteworthy as the Department has failed to make its mark on energy
policy in the UK. Significant disagreements over the policies such as wind farms have contributed to a
general feeling that DECC are not living up to David Cameron’s much-brandished green credentials.
PAUL WALSH
Lead Non-Executive Director
Paul Wash has been Lead Non-Executive Director at DECC since January 2011. Walsh has
been CEO of Diageo, the world largest spirits manufacturer, since 2000. He began his
career at Grand Metropolitan, which later merged with Guinness to form Diageo. He is
also a Non-Executive Director at a number of prominent companies, such as FedEx and
Unilever. During 2012, he was also a member of David Cameron’s Business Advisory Group.
Walsh is entitled to a fee of £20,000 for his role as a Lead NED. He received the full fee
in 2011-2012 and received a payment of £3,000 for the part of the financial year he was in
office in 2010-2011.
ROB WHITEMAN
Non-Executive Director
Rob Whiteman was appointed as a Non-Executive Director in 2009. He has been head of
the UK Border Agency since 2011. Between 2005 and 2010 he was Chief Executive of the
London Borough of Barking & Dagenham.
Whiteman is entitled to a fee of £16,000 for his role as a NED and he received the full fee
in both 2010/2011 and 2011/2012.
CLAIRE THOMAS
Non-Executive Director
Claire Thomas was appointed as a Non-Executive Director in January 2012. She is Senior
Vice President at GlaxoSmithKline (GSK), where she is in charge of HR and the company’s
Environmental Sustainability Strategy.
Thomas is entitled to a fee of £20,000 for her role as a NED and she received a payment
of £5,000 for her limited service during 2011/2012.
24
DEPARTMENTAL PROFILES
DEPARTMENT FOR ENVIRONMENT, FOOD AND RURAL AFFAIRS
The Department for Environment, Food and Rural Affairs currently has four Non-Executive Directors. DEFRA is
slightly unique amongst Departments as its NEDs often have closer links to environmental issues.
The Departmental Board met six times in 2011/12, placing it joint eights out of sixteen Departments.
IAIN FERGUSON
Lead Non-Executive Director
Iain Ferguson was appointed as a Lead NED in December 2010. After spending 26 years at
Unilever, Ferguson was CEO of Tate & Lyle between 2003 and 2009. He is also a member
of the Foresight Global Food and Farming project, the Better Regulation Strategy Group
and the Honorary Vice-President of the British Nutrition Foundation. He is also Chairman
of Wilton Park, a conference centre operated by the Foreign and Commonwealth Office.
Iain Ferguson was awarded a fee of £20,000 for his work as Lead NED in 2011/12.
CATHERINE DORAN
Non-Executive Director
Catherine Doras was appointed as a NED in December 2011. In the same year, Ms Doran
became Chief Information Officer at the Royal Mail Group. Prior to joining the Royal Mail
Group, Ms Doras held the same position at organisations such as Network Rail, BT Retail and
Capital One.
Catherine Doran was entitled to a payment of £5,000 for her role as a NED in 2011/12,
however she chose to waive her fee.
SIR TONY HAWKHEAD
Non-Executive Director
Sir Tony was appointed as a NED in July 2011. Alongside his work as a NED, Sir Tony is Chief
Executive of Groundwork UK, a charity specialising in environmental regeneration. Under his
leadership, Groundwork UK has increased its turnover from £20m a year to £140m and its work
now reaches across the country. He was awarded a knighthood in 2011.
Sir Tony was paid a fee of £7,500 for his work as a NED in 2011/12, less than the £11,250 fee he was
entitled to claim.
PAUL REW
Non-Executive Director
Paul Rew was appointed as a NED in July 2011. He took up the role following a 36 year career at
PriceWaterhouseCoopers (PWC) where he led the Sustainability and Climate Change Assurance
business. Mr Rew is also a non-executive director of the Northumbrian Water Group and the Met
Office.
Paul Rew was entitled to a payment of £15,000 for his work as a NED in 2011/12 however he
waived his fee.
25
DEPARTMENTAL PROFILES
DEPARTMENT FOR INTERNATIONAL DEVELOPMENT
The Department for International Development has just two NEDs, reflecting its relatively small size within
Whitehall. Its Departmental Board met three times in 2011/12, making it joint 14th out of 16 Departments.
DfID could be seen as being under particular pressure to deliver efficient spending due to its budget
ring fence, an issue seen as particularly controversial by Conservative MPs. This far, the Department has
defended its position, perhaps suggesting the quiet work of the NEDs has been successful.
VIVIENNE COX
Lead Non-Executive Director
Vivienne Cox was appointed as a Lead NED in December 2010. She was previously CEO
and Executive Vice President of BP’s Gas, Power and Renewables businesses, having
spent 25 years working for the company. She also serves as a Non-Executive Director
at Vallourec, Rio Tinto and Climate Change Capital, and is the Patron of the St. Francis
Hospice Charity.
Ms Cox received a fee of £19,897 for her work as a NED during 2011/12.
DOREEN LANGSTON
Non-Executive Director
Doreen Langston was initially appointed as a NED in 2008 and retained her position in
2010. Ms Langston’s career was spent in financial services and she has formerly served
as Finance Director and Head of Operations at Daiwa Investment Bank, Chief Operating
Officer at Banco Santander and Chief Accountant at HSBC.
Ms Langston received a payment of £20,000 for her work as a NED during 2011/12.
26
DEPARTMENTAL PROFILES
DEPARTMENT FOR TRANSPORT
The Department for Transport has four NEDs. The Department’s NEDs have taken on a number of broad
roles within the Department, making them somewhat of a leader within the new enhanced board system.
Reflecting this interest in the ways NEDs can contribute to the life of a Department, the Departmental
Board met 15 times in 2011/12, ranking it first of all Departments. Whether this approach has paid off will
be difficult to judge as the Government faces a number of key showdowns on issues such as High Speed
Rail and Airport Expansion in the coming months.
SAM LAIDLAW
Lead Non-Executive Director
Sam Laidlaw was appointed as a Lead NED in December 2010. He is Chief Executive
of Centrica, the UK-headquartered electricity and natural gas company. Previously he
has held positions including Executive Vice President of the Chevron Corporation, Chief
Executive Officer of Enterprise Oil and president and Chief Operating Officer at Amerada
Hess. As Lead NED at the Department for Transport, Laidlaw has been responsible for a
review into the Department’s rail franchising system.
Mr Laidlaw was entitled to a £20,000 payment for his role as a Lead NED, however he has
chosen to waive his fee each year.
ED SMITH
Non-Executive Director
Ed Smith was appointed as a NED in December 2010. He was formerly Global Assurance
Chief Operating Officer and Strategy Chairman of PWC. Beyond this he has an extensive
background in public service. He has served a chairman of the World Wildlife Fund in the UK
and as Chair of the Student Loans Company. In November 2011, he was also appointed to
serve as a Non-Executive Director of the NHS Commissioning Board. At the Department for
Transport, he assisted Sam Laidlaw with his investigation into rail franchising.
Mr Smith received payment of between £20,000 and £25,000 in both 2010/11 and 2011/12;
however some of this fee was paid for his work as Chair of the Group Audit Committee.
ALAN COOK
Non-Executive Director
Alan Cook was appointed as a NED in December 2010. He has previously held a number of senior
business positions, including Managing Director of the Post Office, Chief Executive Officer of
National Savings & Investments and Chief Operating Officer of Prudential. He is also Chairman of
the Highways Agency alongside his work as a NED, and he has also been appointed as a NonExecutive Director of both the Financial Ombudsman Service and the Office of Fair Trading.
Mr Cook received payment of between £20,000 and £25,000 in both 2010/11 and 2011/12;
however some of this fee was paid for his work as chairman of the Highways Agency.
SALLY DAVIS
Non-Executive Director
Sally Davis was appointed as a NED in December 2010. Her career was in the field of
communications and she held leadership roles at Cable & Wireless and Verizon before becoming
CEO of BT Wholesale. As well as her work as a NED at the Department for Transport, she also
serves as a Non-Executive Director of the BBC Executive Board.
Ms Davis received payment of between £20,000 and £25,000 in both 2010/11 and 2011/12 for her
work as a NED.
27
DEPARTMENTAL PROFILES
DEPARTMENT FOR WORK AND PENSIONS
There are currently four NEDs at the Department for Work and Pensions, all of whom were appointed in
2011. Despite the large scale changes being undertaken by the Department, such as the adoption of the
Universal Credit system, the Departmental Board has only met four times in 2011/12. This ranks it twelfth of
sixteen Departments across Whitehall.
IAN CHESHIRE
Lead Non-Executive Director
Ian Cheshire was appointed as a Lead NED in February 2011. He is currently Chief
Executive of Kingfisher, having been appointed in 2008. Prior to this, he was Chief
Executive of B&Q. Before joining Kingfisher in 1998 he worked for a number of retail
businesses including Sears plc where he was Group Commercial Director.
Mr Cheshire was entitled to a fee of £20,000 for his work as a NED however he chose to
waive this payment.
DAME CLARE FURSE
Non-Executive Director
Clare Furse was appointed as a NED in July 2011. She was the Chief Executive of the
London Stock Exchange between 2001 and 2009 and prior to this she was the CEO of
Credit Lyonnais Rouse. Ms Furse also spent 15 years working for UBS.
Dame Clare did not receive any payment for her role as a NED in 2010/11 or 2011/12.
DAVID LISTER
Non-Executive Director
David Lister was appointed as a NED in July 2011. He has been Chief Information officer
at the National Grid since 2009 and he has also held leadership roles in a wide range of
global companies, including RBS, Reuters, Boots and Diageo.
Mr Lister was entitled to a payment of £15,000 for his work as a NED, however he chose to
waive his fee.
WILLY ROE
Non-Executive Director
Willy Roe was appointed as a NED in April 2011. He is also the Non-Executive Chair of
the Pension, Disability and Carers Service Board at the Department. In 2008, the Scottish
Government appointed Mr Roe to be Scotland Commissioner on the UK Commission for
Employment and Skills, a post that he held until March 2012. He has chaired the Board of
Highlands and Islands Enterprise since 2004.
Mr Roe received a payment of £6,000 for his work as a NED in 2011/12.
28
DEPARTMENTAL PROFILES
DEPARTMENT OF HEALTH
The Department of Health currently has five Non-Executive Directors, a relatively large number amongst
Whitehall Departments. One of the Department’s NEDs, Mike Wheeler, is one of the longest serving NEDs in
Whitehall, having first been appointed in 2006. The Departmental Board met five times in 2011/12, ranking it
joint twelfth out of sixteen Departments. Given the major overhaul of the NHS, taking effect from April 2013, it
is perhaps surprising that the Department has not called on the experience offered y their NEDs more often.
PETER SANDS
Lead Non-Executive Director
Peter Sands was appointed as a Lead NED in May 2011. He has spent many years on the
board of Standard and Chartered, spending 4 years as Group Finance Director before
being appointed Chief Executive in 2006. Prior to this, he was a Senior Partner and
Director of McKinsey & Co, the management consultancy. Mr Sands is entitled to receive a
fee of £20,000 for his work as a Lead NED however he has agreed to waive his fee.
DR CATHERINE BELL
Non-Executive Director
Dr Catherine Bell was appointed as a NED in January 2011. She has had a long career in
Civil Service, primarily within the Department for Business, Innovation and Skills where
she became Permanent Secretary. She left the Civil Service in 2005 and is currently a
Non-Executive Director on the Boards of United Utilities Group plc and the Civil Aviation
Authority. She is also a Governor of the London School of Economics. Dr Bell receives a
fee of £15,000 per year for her role as a NED.
PROFESSOR DAVID HEYMANN
Non-Executive Director
Professor David Heymann was appointed as a NED in January 2011. He is currently Chairman
of the Health Protection Agency UK and Professor of Infectious Disease Epidemiology at the
London School of Hygiene and Tropical Medicine. Previously he held a number of roles at the
World Health Organisation and the US Centres for Disease Control and Prevention. Professor
Heymann is entitled to receive a fee of £15,000 for his work as a NED however he has agreed
to waive his fee.
CHRIS PILLING
Non-Executive Director
Chris Pilling was appointed as a NED in May 2011. He has been CEO of the Yorkshire Building
Society since January 2012. He took up this position after spending a number of years working for
HSBC in leadership roles. Mr Pilling is entitled to receive a fee of £15,000 for his work as a NED
however he has agreed to waive his fee.
MIKE WHEELER
Non-Executive Director
Mike Wheeler was appointed as a NED in June 2006. Alongside his role as a NED he is Chair of
the Department’s Audit and Risk Committee. He spent a large part of his career at KPMG, where
he became Global Leader of the Advisory Services Group and a member of the International
Executive. He is also a Non-Executive Director for a number of organisations around the world
Mike Wheeler receives a fee of £20,000 a year for his role as a NED, £5,000 of which he receives
as payment for chairing the Audit and Risk Committee.
29
DEPARTMENTAL PROFILES
FOREIGN AND COMMONWEALTH OFFICE
The Foreign and Commonwealth Office currently has four Non-Executive Directors. The Foreign Office
has showed less interest that many other Departments in the work their NEDs do and the Departmental
Board only met twice in 2011/12, ranking it fifteenth out of sixteen Departments. In many ways, this lack of
engagement is unsurprising as solving the problems faced by the Department, such as combating terrorism
and the civil wars in many parts of the Middle East, requires diplomatic rather than commercial experience.
SIR RICHARD LAMBERT
Lead Non-Executive Director
Sir Richard Lambert was appointed as a Lead NED in November 2011. Prior to becoming a
NED, Sir Richard was an independent member of the Bank of England’s Monetary Policy
Committee between 2003 and 2006, and Director General of the CBI from 2006 to 2011.
He served in a number of editorial roles at the Financial Times between 1991 and 2001.
Currently, he is Chancellor of the University of Warwick.
Sir Richard received a fee of between £5,000 and £10,000 in 2011/12 for his role as the
Department’s Lead NED.
HEATHER RABBATTS
Non-Executive Director
Heather Rabbatts was appointed as a NED in March 2012. She was Chief Executive of
the London Borough of Lambeth between 1995 and 2000, when she took on a variety
of roles in the private sector. She became Managing Director of Channel 4’s education
programmes and business, 4Learning as well as becoming Executive Deputy Chair of
Millwall FC. In 2011, she became the first female Director of the Football Association and
she also sits on the boards of the King’s Fund, the London School of Economics and the
British Council.
Heather Rabbatts receives a fee of around £5,000 for her work as a NED.
RUDY MARKHAM
Non-Executive Director
Rudy Markham was appointed as a NED and Chair of the Department’s Audit and Risk
Committee in 2010. He previously worked for both Unilever and Standard and Chartered in
a variety of finance roles. Currently, he sits on the boards of various companies, including
Astra Zeneca, Standard Chartered, Legal & General and UPS.
Rudy Markham has not received a fee for his work as a NED.
JULIA BOND
Non-Executive Director
Julia Bond was appointed as a NED in April 2011. Prior to this, she was Managing Director
of Credit Suisse from 1997 to 2009. Ms Bond is also a non-executive director, Central
London Community Healthcare Trust.
Bond receives a fee of between £10,000 and £15,000 for her work as a NED.
30
DEPARTMENTAL PROFILES
HER MAJESTY’S TREASURY
The Treasury currently has four NEDs working within the Department. The Department’s NEDs have
relatively more public sector and policy experience than those in other Departments. Despite this, the
Treasury board has is the lowest ranked Department in Whitehall and it’s Board only met once win 2011/12.
This is despite two of the Department’s NEDs having been in office since 2008 and the Lead NED having
been appointed in January 2011. This begs the question: had the experience offered by NEDs been better
utilised, could problems such as the omnishambles budget have been avoided?
BARONESS SARAH HOGG
Lead Non-Executive Director
Baroness Hogg was appointed as a Lead NED in January 2011. She has held a number of
senior positions during her career. She began her career in journalism, writing and editing
for publications such as the Economist, The Times and The Telegraph. Between 1990
and 1995 she was head of the Prime Minister’s Policy Unit in 10 Downing Street before
spending two years as Director of the London School of Economics.
Baroness Hogg received a fee of between £10,000 and £15,000 in 2011/12 and a fee of
around £5,000 in 2010/11 for her work as a NED.
DAME DEIRDRE HUTTON
Non-Executive Director
Known in the media as the “Queen of the Quangos”, Deirdre Hutton was appointed as
a NED in October 2008. Amongst her former roles she has been Chair of the National
Consumer Council, Chair of the Scottish Consumer Council, Vice-Chair of the Scottish
Environment Protection Agency, a member of the Sustainable Development Commission
and a member of the Energy Advisory Panel for the UK Department of Trade and Industry.
She is also a Non-Executive Director of the Civil Aviation Authority.
Dame Deirdre receives a fee of between £5,000 and £10,000 for her role as a NED at the
Treasury.
DAME AMELIA FAWCETT
Non-Executive Director
Amelia Fawcett was appointed as a NED in October 2012, alongside her role as NonExecutive Chairperson of the Guardian Media Group. She was previously head of Morgan
Stanley’s European division, during which time she was reportedly responsible for $6.7
billion in revenue.
There is currently no publically available information in the fees Dame Amelia has claimed
for her role as a NED.
MICHAEL O’HIGGINS
Non-Executive Director
Michael O’Higgins was appointed as a NED in October 2008. He is the current Chair of
both the NHS Confederation and The Pensions Regulator and is the former chair of the
Audit Commission, a position he held for six years.
He received a fee of between £5,000 and £10,000 for his role as a NED in both 2010/11
and 2011/12.
31
DEPARTMENTAL PROFILES
HOME OFFICE
The Home Office currently has four NEDs, with a mix of public and private sector experience. Phillip Auger,
a Non-Executive Director in the Department, is somewhat rare in that he joined the Department following
a six year stint as a NED in the Department for Education. The Department is ranked joint seventh out of
sixteen Departments, with the Departmental Board having met six times in 2011/12. The Home Office has
been relatively uncontroversial since 2010, with a number of reforms to organisations such as the Police
taking effect largely without incident. This may suggest that the Department’s NEDs have helped the Home
Office set and achieve manageable targets in their reform package.
VAL GOODING
Lead Non-Executive Director
Val Gooding was appointed as Lead NED in December 2010. She spent a decade as Chief
Executive of BUPA before retiring in 2008. While at the company, she was responsible for
doubling the company’s turnover and customer numbers. She is currently a non-executive
director of the BBC, Standard Chartered and J Sainsbury’s.
Ms Gooding received a salary of between £20,000 and £25,000 for her work as a Lead
NED in 2011/12 and was paid around £5,000 for the work she did in the 2010/11.
PHILLIP AUGER
Non-Executive Director
Phillip Auger was appointed as a NED in March 2010. He had previously been a NED at
the Department of Education, serving six years in the job between 2004 and 2010. His
business background was in financial services, finally becoming Group Managing Director
(Securities) at FTSE 100 company Schroders from 1995 until 2000.
Mr Auger does not receive a fee for his work as a NED.
JOHN ALLAN
Non-Executive Director
John Allan was appointed as a NED in February 2011. He is currently Chairman of Dixons
Retail plc. He is also a Senior Advisor to Deutsche Bank. He is also Chairman of CareUK,
WorldPay and a Non-Executive Director of the Royal Mail Group.
Mr Allan receives a fee of between £15,000 and £20,000 for his work as a NED, but only
claimed around £5,000 in 2010/11.
DIANNE THOMPSON
Non-Executive Director
Dianne Thompson was appointed as a NED in February 2011. She is also Chief Executive of
Camelot, operator of the UK lottery. She has held the position for over a decade. In 2011,
she also became Chancellor of Manchester Metropolitan University.
Ms Thompson receives a fee of between £15,000 and £20,000 for her work as a NED, but
she only claimed around £5,000 in 2010/11.
32
DEPARTMENTAL PROFILES
MINISTRY OF DEFENCE
The Ministry of Defence currently has three NEDs. The Lead NED, Gerry Grimstone, was appointed
following a long association with the defence community, and in particular with the Royal Air Force.
Sir Nick Harvey MP, a former Minister within the Department, singled out the Departmental Board for
praise when he appeared in front of the Public Administration Select Committee in January 2013. The
Departmental board met eight times in 2011/12, ranking it fourth out of sixteen Departments.
GERRY GRIMSTONE
Lead Non-Executive Director
Gerry Grimstone was appointed Lead NED in September 2011. He is also Chairman of
Standard Life, however he has a close relationship with the MoD prior to his appointment,
having been a Board Member of the RAF Strike Command (subsequently known as Air
Command from 1999 to 2007. He also led an independent review into the way civilians are
employed in Defence, which reported to the Secretary of State in 2010.
Mr Grimstone does not receive a payment for his work as a Lead NED.
DR DAVID ALLEN
Non-Executive Director
Dr David Allen joined the MOD as a Non-Executive Director in 2010. He retired from his
previous position as group chief of staff at BP in 2008 following a 30 year career at the
company. He currently holds a variety of Non-Executive Directorships in a number of
industries.
He received a payment of around £25,000 for his role as a NED in both 2010/11 and
2011/12.
GRAHAM WILLIAMS
Non-Executive Director
Graham Williams was appointed as a NED in January 2012. Now retired, he spent 30 years
at PWC, including over two decades as a Partner. During his time at PWC he became the
group’ Chief Operating Officer for Strategy and Change.
He received a fee of around £5,000 for his work as a NED in the part-financial year he was
in office in 2011/12.
33
DEPARTMENTAL PROFILES
MINISTRY OF JUSTICE
There are currently four Non-Executive Directors at the Ministry of Justice. The Department’s Lead NED is a
very recent appointment, having only joined the Department in December 2012. The Department is ranked
second of sixteen Departments, with its Departmental Board having met fourteen times in 2011/12.
TIM BREEDON
Lead Non-Executive Director
Tim Breedon was appointed as Lead NED in December 2012. He spent much of his career
at Legal & General, joining the board in 2002. He became the group’s Chief Executive in
January 2006. Between July 2010 and July 2012, he was Chairman of the Association of
British Insurers (ABI). He is also no stranger to the Civil Service, having chaired the UK
Government’s non-bank lending taskforce, investigating the structural and behavioural
barriers to the development of alternative debt markets.
There is currently no publically available information on the fee Mr Breedon will receive for
his role as a Lead NED.
BILL GRIFFITHS
Non-Executive Director
Bill Griffiths was appointed as a NED in November 2011. He has extensive experience as
a Government NED, having held positions in the Department for Work and Pensions, Her
Majesty’s Revenue and Customs and the Department for Environment, Food and Rural
Affairs. In the private sector, he has worked in managerial and finance roles for both
Unilever and ICI.
Mr Griffiths received a fee of between £5,000 and £10,000 for his role as a NED in the
part-financial year he served in 2011/12.
DAVID MACLEOD
Non-Executive Director
David MacLeod was appointed as a NED in April 2011. Currently working in academia, he
holds a Fellowship of both the Ashridge Business School and the Sunningdale Institute. He
is also a Visiting Professor at the Cass Business School and is an Associate at the Institute
for Government. Previously, he held senior roles at both Dulux and Uniqema, a Global ICI
company.
Mr MacLeod received a fee of between £15,000 and £20,000 for his role as a NED in
2011/12.
DAME SUE STREET
Non-Executive Director
Sue Street was appointed as a NED in January 2011. Most of her career was spent within
the Civil Service, which included 5 years as Permanent Secretary at the Department for
Culture, Media and Sports. Since leaving the Civil Service, Sue has taken on a number of
new positions, including a Strategic Advisor role at Deloitte and a seat on the Board of
Trustees at the Royal Opera House.
Dame Sure received a fee of between £15,000 and £20,000 for her role as a NED in
2011/12 and around £5,000 for her work in 2010/11.
34
RESOURCES
• Lord Browne’s Government Lead non-Executive Director Annual Report- 2011/12
https://www.gov.uk/government/publications/government-lead-non-executive-annual-report-2011-12
• The Civil Service Reform Plan
http://www.civilservice.gov.uk/wp-content/uploads/2012/06/Civil-Service-Reform-Plan-acc-final.pdf
• Public Administration Select Committee “Future of the Civil Service” Inquiry - Evidence from Lord Browne
- 12/2/2013
http://www.publications.parliament.uk/pa/cm201213/cmselect/cmpubadm/c664-iv/c66401.htm
• Public Administration Select Committee “Future of the Civil Service” Inquiry- Evidence from Lord Browne10/6/2012
http://www.publications.parliament.uk/pa/cm201213/cmselect/cmpubadm/405/120710.htm
• Public Administration Select Committee “Future of the Civil Service” Inquiry- Evidence from Rt Hon Lord
Adonis, Rt Hon Caroline Spelman MP, Sir Nick Harvey MP and Rt Hon Nick Herbert MP- 29/1/2013
http://www.publications.parliament.uk/pa/cm201213/cmselect/cmpubadm/c664-iii/c66401.htm
35
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