Board Effectiveness Review Report 2021
Reports, plans and updates
- Publication date
Last year, and following a competitive procurement process, the Ofgem Board appointed Campbell Tickell to undertake an externally-facilitated Board Effectiveness Review. It is good practice in corporate governance to undertake such a review at least every three years.
The Board welcomes the findings of this review, and wishes to place on record its appreciation and thanks to Campbell Tickell and, in particular, to Radojka Miljevic and James Tickell for such a considered and thorough report.
We are pleased that the review found that there is much that currently works well in Ofgem’s corporate governance. At the outset, however, the Board was clear that it wanted the review to suggest areas for improvement – and so we are equally pleased that the review has identified a number of areas in which we can strengthen our current practices. In a number of these, the Board took steps to implement the recommendations from the review shortly after receiving the report. Other recommendations were addressed as part of the increased tempo of Board meetings responding to the impact of record high gas prices on the consumer and the retail market. For example:
- The Board held a strategy away-day in July 2021, at which it discussed Ofgem’s overall strategy and the supporting programmes, helping to strengthen the strategy clarity between the Board and the Executive. This was followed by a Board and executive workshop in September 2021, with a further strategy away-day planned for July 2022.
- The Board discussed the organisation’s work to improve Diversity and Inclusion in June 2021 and returned to this issue in November 2021 and May 2022. The Board is committed to returning to this issue regularly.
- The Board now receives an organisational and performance dashboards, which is reviewed on a quarterly basis and assists the Board in monitoring Ofgem’s performance more effectively.
- The Chair has instituted an improved process for agenda management, so that the Board’s time is more closely structured around its duties in respect of regulatory decision-making, strategy-setting, supervisory, and organisational health.
- The People and Remuneration Committee considered Board composition, including its diversity, at its July 2021 meeting, and made recommendations for further non-executive appointments, which the Board itself discussed.
- The Audit and Risk Assurance Committee considered improvements to Ofgem’s Declarations of Interest policy, which was then published in March 2022.
- Generating further opportunities for Board-staff engagement.
Alongside this, the Chair of the Board, the Chair of the Audit and Risk Assurance Committee, and the Chief Executive are overseeing a structured programme of other improvements. These improvements are also being by Oxera’s independent review of Ofgem’s regulation of the energy supply market, which the Board commissioned, and the National Audit Office’s report on the energy supplier market. This will include:
- Updated paper templates and improved guidance to provide clearer advice on the preparation, approval process and format for Board and Committee papers.
- Improvements in the Board induction programme and ongoing learning and development for Board members.
- Reviewing the Board’s Rules of Procedure, and the Schedule of Reserved Matters, to ensure these reflect the Board’s ways of working and the improvements being made.
- The Governance and Secretariat team is also taking forward a number of more detailed improvements, which had been recommended in the review.
The Board will be updated regularly on this programme of improvements, and will return to overall Board effectiveness in its next review, which will be an internal exercise this year.