Guidance

12 Principles of Governance for all Public Body NEDs

Published 11 March 2021

This was published under the 2019 to 2022 Johnson Conservative government

As set out by the Institute of Directors, Non-Executive Directors (NEDs) (also known in the context of Arm’s Length Bodies (ALBs), as non-executive board members) are appointed to the boards of organisations to bring: independence; impartiality; wide experience; special knowledge; and personal qualities.

As a NED of a public body you should be expected to act in an independent manner bringing expertise, scrutiny and challenge and support to your organisation.

You are bound by the Code of Conduct for Board Members of Public Bodies, which covers your conduct in the role and includes the Nolan Principles of Public Life.

NEDs on Public Bodies should demonstrate the following 12 qualities.

1. Expertise

• Consider and act in the best interests of your organisation and its objectives; delivering the outcomes expected by your sponsor department, ministers and ultimately the public.

• Consider the broader mission and duties of your sponsoring Secretary of State, his or her Department and the Government.

• Ensure compliance with statutory duties and the organisation’s Framework Document and act within its powers.

• Exercise reasonable care, skill and diligence in the exercise of their authority and judgement.

2. Scrutiny and challenge

• Maintain independence from the executive to allow scrutiny of management and in meetings agree goals and objectives, and monitor performance and the reporting of performance so that the public who use your organisation receive a high quality service.

• Satisfy yourself on the integrity of budget setting to deliver objectives and financial information and reporting against budgets, and that financial controls and systems of risk management are robust and defensible. Meet the requirements of Managing Public Money, including supporting the Accounting Officer in fulfilling their duties to provide propriety and value for money in the use of public funds.

• Champion high standards of risk management by ensuring your organisation has effective risk reporting, controls and governance, risk expertise and risk tolerances to effectively manage risk.

• Represent your organisation to the department and to Ministers, as well as ensuring Ministers’ views are considered by the executive team of the organisation, as appropriate.

3. Support

• Support the board in succession planning and be prepared to put yourself up for re-appointment, as well as promoting the need for a diverse board.

• Participate in and promote regular reviews of your organisation, as well as the board’s own effectiveness, with particular focus on the organisation’s purposes and its efficiency in meeting these purposes. Engage in the appraisal process, including self-reflection on your own abilities.

• Listen carefully to, ask appropriate questions of and support management to encourage discussion in a manner that promotes a culture where all perspectives are listened to, while fulfilling the individual Director’s duties and responsibilities and respecting and valuing the expertise of the executive team.

• Promote the success of the entity having regard to the interests of all members and stakeholders, and all risks.