Pensions Bill

I thank the noble Baroness, Lady Noakes, for the chance to touch on the size and composition of the delivery authority board. Amendment No. 86 puts strict limits in place for the size of the delivery authority board. The Bill currently provides some flexibility in the size of the authority's board, enabling the membership to go below three or above nine for a short period should this be needed. Paragraph 6(2) of Schedule 6 enables the authority board to function without an executive member until the first chief executive is appointed, which will enable the chairman to be involved in the recruitment process for the chief executive. Alternatively, there may be a need for additional expertise to be recruited for a short period, which may temporarily increase the size of the board above nine members. This flexibility is important in enabling the authority to tackle such short-term challenges in an appropriate and effective manner. As such, we would not wish to impose on the board the strict limits that this amendment seeks, but we expect the outcome routinely and normally to be as the noble Baroness would expect. Amendment No. 83 looks at the composition of the board. In particular, it seeks to ensure that not more than half the total members of the board are executive members. This rightly alludes to the important role that non-executives play in providing checks and balances on the executive members. I can reassure the Committee that this is a principle that we will adhere to; indeed, our current recruitment plans reflect this. However, this is already covered by the provision in Clause 21 that requires the authority board, in managing its affairs, to have regard to the general guidance for public bodies and the generally accepted principles of good corporate governance. This includes the principles in the Financial Reporting Council’s Combined Code, which sets out that executive members should not constitute more than half the membership of the board. Including this amendment in legislation is therefore unnecessary and could prove to be disruptive to the work of the authority in the event that there is a short period when a non-executive vacancy is not filled, forcing the proportion of executive members to more than 50 per cent. The provisions in Clause 21 are robust, but at the same time provide flexibility to deal with such circumstances. I hope that that has reassured Members of the Committee. I believe that what the noble Baroness seeks and expects to be the norm will pertain, while there will be flexibility at the margins for practical reasons.