12/02
26 February 2002
NON-EXECUTIVE APPOINTMENTS TO THE COURT OF THE BANK OF ENGLAND
Advertisements for suitable candidates for appointment as non-executive members of the Court of Directors of the Bank of England will appear in national newspapers in the week beginning Monday 25 February.
The Court has a key role in reviewing the performance of the Monetary Policy Committee and managing the affairs of the Bank of England. The Treasury is looking for high quality individuals who will be able to take account of the full range of industrial and business views of the country. The Court should be fully representative of the whole of the United Kingdom.
Suitable candidates will be selected from a short list, from which Court members will be chosen as vacancies arise. One immediate appointment will be required to replace Sir Neville Simms who has completed his term of appointment, having joined Court in March 1995.
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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
- All appointments will be made in accordance with the guidance issued by the Commissioner for Public Appointments.
- 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.
- The membership of the Court at present is: Sir Edward George, David Clementi, Mervyn King, Roy Bailie, Bridget Blow, Sir John Bond, Sir David Cooksey, Sir Howard Davies, Mary Francis, Sir Ian Gibson, Graham Hall, Dr DeAnne Julius, Dame Sheila McKechnie, Sir Brian Moffat, William Morris, John Neill, Kathleen O'Donovan, Sir Neville Simms and James Stretton.
- Media enquiries should be addressed to Simon Moyse in the Treasury press office on 020 7270 4420
JOB DESCRIPTION: NON-EXECUTIVE DIRECTORS OF THE BANK OF ENGLAND
The Bank and its Court
The Bank of England is the central bank of the United Kingdom. It is governed by a Court (Board) of Directors, which oversees the operation of the Bank as a publicly-owned corporation, except the Bank's monetary policy decision-making, which is the responsibility of a separately-appointed Monetary Policy Committee. The Governor of the Bank chairs both the Court and the Monetary Policy Committee. The three executive members of Court are the Governor and the two Deputy Governors. The 16 Directors are all non-executive, and are appointed by the Crown for three-year renewable terms.
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The Bank of England Act 1998 gives the non-executive Directors an 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 Sir David Cooksey, who has held this post since 1 June 2001.
The Act also places 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
Reflecting the Bank's position in the economy, the business of Court spans both the direction of an important financial business and the oversight of a key national economic policy function.
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 Monetary Policy Committee 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 typically discuss financial stability issues; issues relating to the Bank's financial market operations; and finally management issues.
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.
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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.
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.
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.
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.
Non-executive Directors receive remuneration of £5,000 each year plus expenses.
Qualities sought in a non-executive director
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 UK economy as a whole, both geographically and sectorally across industry, commerce and finance. They are expected to have substantial business experience either:
- as chair, chief executive or head of a function or group in a large organisation, or
- by having built up a significant enterprise themselves, or
- by having 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.
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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.
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.
Further background about the Bank, including a list of the current Court non-executive Directors is available on the Bank of England's website.