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ICAEW Council votes for governance changes

Author: ICAEW Insights

Published: 11 May 2023

ICAEW Council has approved a series of recommendations to modernise and strengthen the Institute’s governance. The changes are designed to streamline decision making, clarify accountability and support greater diversity throughout the governance structure.

The proposals were put forward by ICAEW’s Governance Implementation Group (GIG) – a sub-group of the ICAEW Council – at a special Council meeting on Wednesday.

The GIG was established by Council last February to build on the ideas set out by a working group (the Governance Working Group or GWG), which had conducted an extensive review during 2020/21. That review had been commissioned by Council in the light of the new 10-year strategy, and it had the aim of ensuring that our governance is world class, so that ICAEW remains fit for the future as we head towards our 150th anniversary in 2030.

The GIG, working closely with ICAEW staff, has already overseen the implementation of several measures approved by Council at the end of last year. These included the creation of a new Risk Committee, changing the reporting line of the Audit Committee from Council to the Board and, most significantly, the recruitment of a new independent Chair of Board.

Board changes

Historically, the ICAEW Board has been chaired by the elected ICAEW President, a Council member who serves a single year term in office. The new independent Chair will stand apart from Council and will serve a three-year term. Recruitment for this role is currently underway.

The new Chair will oversee a Board with a significantly different look after Council approved the changes to its composition that the GIG proposed at this week’s meeting.

The current representation by three elected Council members and the three department board chairs will be replaced by six ICAEW members, selected on the basis of their skills and expertise. To avoid any possible conflicts of interest, no Board member – bar the President – may also be a member of Council for the duration of their time in office.

The President, Chief Executive, Chief Operating Officer and Chief Financial Officer all remain as ex-officio members, but the Deputy and Vice Presidents will attend as observers. Lay membership will, however, be increased from the two independent non-executive directors at present to three, to bring in more outside perspectives and further boost transparency.

The Council also agreed that Board members should be entitled to remuneration for the time they put into their Board responsibilities, so as to attract a broader and more diverse range of candidates.

“ICAEW is 143 years old this week, and in that time our governance has continuously evolved in response to new challenges and changing times”, said ICAEW President, Julia Penny.

“It’s incumbent on us, as the current custodians of the Institute, to ensure that ICAEW continues to adapt. I am therefore pleased to see our Council vote for these important governance reforms: they will foster an even more effective decision-making environment and improve our accountability and agility,” she added.

“The commitment of GIG and GWG members over many months has been outstanding. I’d like to thank them and everyone else who contributed to this vital work. I think they can be proud of what they’ve achieved.”

The other changes voted through by Council include: 

  • The creation of a Board Nomination Committee (BNC), as a committee of the Board, responsible for Board member and senior employee appointments, removals and succession planning.
  • The establishment of a Governance and Appointments Committee (GAC) to oversee any appointments proposed by the BNC or Volunteer Nomination Committee, and to keep ICAEW’s governance under review.
  • The development of a new skills and competencies framework for the Board, led by external advisors.

Work will now begin on the implementation of these latest recommendations.

ICAEW Council is responsible for ensuring that the organisation meets the objectives set out in its Royal Charter. It is supported by the ICAEW Board and expert governance bodies and committees populated by active ICAEW members, employees and lay members.

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