NON-EXECUTIVE APPOINTMENTS TO THE COURT OF THE BANK OF ENGLAND
The Treasury is advertising in the national and regional press for candidates for non-executive members of the Court of Directors of the Bank of England. The first advert appears today in the Financial Times. Further adverts will appear during the week.
The Court has a key role in managing the affairs of the Bank of England and the non-executive directors have a particular role in reviewing the Bank's performance and controls. They also review the procedures of the Monetary Policy Committee of the Bank, although they have no involvement in the formulation of monetary policy.
The Treasury is looking for high quality individuals who, although not acting as representatives of particular interests or organisations, would collectively be representative of the economy as a whole, both geographically and across industry, commerce and finance.
Suitable candidates will be selected from a short list from which Court members will be chosen as vacancies arise. Two immediate appointments will be required to replace Sir Colin Southgate and Sir David Lees, who have completed their second terms of appointment.
Appointments will be made by Her Majesty the Queen for three year terms. Depending on re-appointments, vacancies arise by rotation each year in June.
NOTES TO EDITORS
1. Any appointments will be made in accordance with the guidance issued by the Commissioner for Public Appointments.
2. All non-executive Directors to the Court of the Bank of England are appointed in a personal capacity and do not serve as representatives of particular interests or associations.
3. The non-executive members of the Court at present are : Sir David Lees, Sir Colin Southgate, Frances Heaton, Sir Chips Keswick, Sir David Cooksey, Dame Sheila Masters, Sir Neville Simms, John Neill, Andrew Buxton, Christopher Allsopp, Howard Davies, Roy Baillie, Graham Hawker, Sheila McKechnie, Bill Morris, and James Stretton.
4. The text of the advertisement and the job description for non-executive members of the Court are attached.
Non-Executive Directors of the Bank of England The Bank and its Court
1. The Bank of England is a publicly-owned corporation with responsibilities for monetary policy, financial stability and the efficiency and effectiveness of the financial system. It is governed by a Court (Board) of Directors, which oversees the operation of the Bank as a company, except that the Bank's monetary policy decision-making is the responsibility of a separately-appointed Monetary Policy Committee. Both the Court and the Monetary Policy Committee are chaired by the Governor of the Bank. The 16 Directors are all non-executive, and are appointed by the Crown for three-year renewable terms. The three executive members of Court are the Governor and the two Deputy Governors.
2. The Bank of England Act 1998 gave the non-executive directors a more explicit role in overseeing and reporting on the Bank's performance. The Act created a sub-committee of Directors with statutory responsibilities for keeping the Bank's performance under review. All of the non-executive Directors are members of this Committee, and one of their number is appointed by the Chancellor to chair it. The current chair is Dame Sheila Masters.
3. The Act also placed great emphasis on accountability and transparency, in the context both of the monetary policy process and of the Bank's operations and finances. The Court is responsible for the Bank's published accounts and members of Court may be called to give evidence about the Bank before Parliamentary Committees.
The non-executive Director's job description
4. Reflecting the Bank's position in the economy, the business of Court spans both the management of a medium-sized financial business and the oversight of a key national economic policy function.
5. The meetings of Court take place monthly and usually last for a whole morning, with Court Committees sometimes continuing into the afternoon. A typical meeting of Court would start with a review of the monetary and economic situation, with MPC members present. Directors are expected to contribute views on the economic conjuncture as seen from their own business perspective: this provides useful input to the Monetary Policy Committee. Court would then discuss financial stability issues; issues relating to the Bank's financial market operations; and finally management issues.
6. Court is required by the Act to determine the Bank's Objectives and Strategy, to ensure the effective discharge of the Bank's functions and, subject to that, to ensure the most efficient use of the Bank's resources. Court approves the Bank's expenditure budget, which reflects the strategy determined by Court, and monitors outturns against budget.
7. The non-executive Directors, as members of the sub-committee of Directors, are required by the Act to review the Bank's performance in relation to the objectives set by Court, to monitor the extent to which the Bank is meeting its financial management objectives and to keep under review the internal financial controls of the Bank. The non-executive Directors make their own annual report on the discharge of these functions.
8. Although they have no involvement in, nor responsibility for, the monetary policy decisions taken by the Monetary Policy Committee, the non-executive Directors are required under the Act to keep under review the procedures that the Monetary Policy Committee follows, and especially to satisfy themselves that the Monetary Policy Committee has collected the regional, sectoral and other information necessary to formulate monetary policy.
9. The non-executive Directors are responsible for determining the remuneration of the executive members of Court, the members of the Monetary Policy Committee and some senior members of the Bank staff.
10. Court has two major committees on which Directors may be asked to serve: the Audit Committee and the Remuneration Committee. Directors may also be invited to become trustees of the Bank staff pension fund. Audit and Remuneration Committee work is similar to that in a major plc: in these respects the Bank prepares accounts and generally conducts itself as though it were a public company.
Qualities sought in a non-executive director
11. Directors of the Bank should be persons of undisputed integrity, standing and authority. Although Court members serve in a personal capacity and not as representatives of particular interests or organisations, Court has to be representative of the economy as a whole, both geographically and sectorally across industry, commerce and finance. They are expected to have substantial business experience either as chairman or chief executive of a large organisation or by having built up a significant enterprise themselves; or have played a prominent role in a relevant area of public policy. Maintaining the right balance of Court membership will be an important factor in selection.
12. Any candidate for the Court of the Bank should be a leader within his or her chosen profession, with a strong technical grasp in his or her field combined with an interest in the wider public policy debate and in economic and financial policy in particular.
13. Members of Court are required to treat as absolutely confidential the proceedings of Court, and to declare any conflicts of interest arising in Court business.