Updated legislation is set to improve efficiency

The UK government published a new code for corporate governance that aims to improve transparency and accountability in central government.

The code draws on best practice in the public, private and charity sectors and reinforces the importance of governance for effective financial management.

The Treasury reports that the most significant changes in the code aim to:

  • Provide greater ministerial involvement in departmental business, with the Secretary of State chairing board meetings.
  • Establish a ‘comply or explain’ approach. Ministries can now depart from the code provided the reasons are explained accordingly.
  • Increase the number of non-government board members. Around a third of board members will now be come the private sector and will have experience of managing complex organisations.

It is expected that the private sector’s knowledge of governance and risk management will increase efficiency and accountability in the public sector.

“The appointment of experienced leaders from across the private, public and not-for-profit sectors as Government Non-Executives is an important step in the government’s reform agenda,” said Francis Maude, Minister for the Cabinet Office.

“Effective corporate governance is essential to any well run organisation. This Government is committed to applying the highest standards and this new Code is a further important step in the Government’s drive to increasing transparency and accountability in the use of public money,” said Danny Alexander, Secretary to the Treasury.

The report was released on July 19. Click here for the full document.