Whitehall non-exec appointments need to be more ‘efficient, transparent and fair’, MPs find

MPs have identified issues with the current process for filling NED vacancies, including recruitments that take an ‘unacceptably long time’ and procedures that are ‘not set up to encourage diversity’

Ministers are failing to ensure Whitehall departments’ appointment process for non-executive directors is “efficient, transparent and fair”, a committee of MPs has said.

In a report that also says it is taking an “unacceptably long time” to fill NED vacancies, the Public Accounts Committee said the process for appointing NEDs is “not set up to encourage diversity… with a lack of transparency on requirements for political independence”.

Technology executives are a common feature of government boardrooms, with guidelines now advising departments that at least one non-executive board member should have experience of working in the digital sector. Various agencies have brought in non-execs directors from the tech sector with a remit to help drive transformation.

Among other issues identified in the recruitment process for such figures, PAC found the Cabinet Office – which oversees all public appointments – “does not publish clear information about NEDs or the panels which select them”.

The department published a diversity action plan in 2019 that said 50% of all public appointees should be female and 14% of yearly appointments should be from ethnic-minority backgrounds by 2022. However, the report noted that it had not met those targets “and has no plans to put in place a new diversity action plan or updated targets”.

The MPs said the Cabinet Office had been unable to point to “convincing examples of how it deals with conscious and unconscious bias within the appointments process”.

They noted that there is very little data available on the advisory assessment panels that interview applicants and produce a list of appointable candidates for ministers. Among other things, the report notes that the Cabinet Office “has not set out what determines a suitable level of political independence” for NEDs or panellists.

“Without checks on any bias, the current process… risks seeming insular and circular,” the report says.

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The report – which calls on the Cabinet Office to set a date by which it will put in place a new diversity action plan for public appointments – also questions whether government’s efforts to recruit a broader range of candidates for NED roles have been effective.

These efforts include the Boardroom Apprentice Programme, which enables people with no experience on boards to serve as an observer on a board for a year to gain experience.

“The Cabinet Office could do more to demonstrate the effectiveness of these activities and to learn lessons to better focus its outreach work: for instance it does not have data of sufficient quality on the social and professional backgrounds of candidates,” says the report, which asks the department to set out how it is measuring the effectiveness of its outreach activities.

The report echoes many of the concerns raised by the National Audit Office in its February report, which found that delays in appointing NEDs were leaving gaps on boards and putting off high-quality candidates.

The MPs found that in 2022-23, only 7% of appointments were completed within the expected three months of a recruitment competition closing. The average appointment took more than double this expected time, while nine took more than a year to complete, with the longest taking more than 400 days.

PAC noted that as well as impairing boards’ ability to function, delays mean candidates may “drop out of the application process, take up posts elsewhere or be put off applying in the first place”.

A lack of data is hindering improvements to the NED recruitment process, according to the report. There were 4,476 regulated public appointments in post as of March 2022, according to the Cabinet Office’s latest statistics – but this data is not broken down by role, so it is not possible to tell how many of these are NEDs.

Until 2023, the report says, the Cabinet Office collected data on regulated appointments manually, requesting data from departments once a year. A new applicant-tracking system “should allow government to understand better where delays are occurring and help to improve its oversight of regulated appointments”, PAC said, but noted that the system is still in the early stages, and not all departments and arm’s-length bodies are using it as intended.

The report calls on the Cabinet Office to use data from the new applicant-tracking system to report publicly by September on appointment delays, including the average length of time for appointments and at what stages delays are occurring. It says the department should consider providing data at the department level, highlighting the best performers so others can learn from them.

It also urges the department to make sure all regulated appointments are being run through the applicant-tracking system, to ensure it has the data it needs to regulate appointments properly.

PAC chair Dame Meg Hillier said the committee had found the appointment process “wanting in fairness and political independence”.

“Too many selection panels are set up in a way which leads to a closed loop of people involved in the process – from the recruit panel members to those appointed. Government is falling short on best practice in other sectors,” she said. “Not enough is being done to ensure that these roles are fully representative of society at large. The process itself is unacceptably sluggish, with most waiting over six months to take up their roles. Given the significance of non-execs to any board on which they serve, the government must also ask itself hard questions on whether it’s doing everything possible to attract the right and the best people for the job.”

A Cabinet Office spokesperson said: “We are proud of improvements that have been made to the public appointments system over the last few years. The UK is one of the few countries in the world with such a fair and merit-based approach to public appointments, which is transparently set out in the governance code on public appointments. Clear guidance on the political activity of those appointed is set out, with only 3% of appointees declaring a political interest.”

Beckie Smith

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