Poaching NEDs for the public sector

Cabinet secretary Francis Maude has taken the lead in making substantive changes to the way in which government boards are populated and run. The most eye-catching change has been his intention to appoint a much greater number of non-executive directors drawn from the private sector.

To achieve this, Lord Browne of Madingley, the former chief executive of BP has been appointed as the lead NED. According to the Cabinet Office, ‘one of his first tasks will be to work with secretaries of state to appoint non-executive directors to the board of each government department’.

Clearly, Browne has the right credentials for the job: a glittering career at BP augmented by a number of high-profile non-exec roles at Goldman Sachs, Apax and SmithKline Beecham. However, finding people of a similar calibre is difficult: so the government is now beginning a recruitment drive to attract some of the brightest minds from the private sector to sit on public sector boards.

‘Under the new plan, boards themselves will be chaired for the first time as a matter of course by the secretary of state. So therefore the type of non-exec that is needed to work on those boards is different from what was needed before.’ says Andrew Baigent, director general, financial audit at the National Audit Office.

Put simply, the shake-up means that the quality of the individual and the challenge function that they will need to present must improve. And that inevitably will suit those with senior roles in large commercial organisations, or indeed professional practices. It’s hardly surprising, therefore, that accountants are in such demand given the parlous state of the public finances. And there is also little doubt that for some organisations, a rebalancing of priorities, in favour of a bottom-line focus, is overdue.

Abridged from an article in Accountancy, October 2010. Read the full article.