Advanced Research and Invention Agency Bill — House of Lords, 2021-12-14
Topic: Government Operations
Sheila Masters (Conservative, Centre-right): My Lords, in moving Amendment 15, I will also speak to my Amendments 16 and 18 in this group. With these amendments, I am returning to the issue of governance of ARIA. We debated these or similar amendments in Committee, and I thought I would give my noble friend the Minister another chance to answer the issues that I raised Amendment 15 is directed at the maximum size of the ARIA board. In Committee, I explained that large boards are subject to weaknesses such as passive free-riding, dislocation and groupthink. While it is true that there is no magic formula determining the size at which boards become ineffective, studies generally agree that, once they get to 13 or 14, they do not work well Schedule 1 has no overall size constraint but does require a majority of non-executive directors. One way to constrain the size of the board is therefore to limit the number of potential executive directors. My Amendment 15 would limit those executive members to six, which implies a board size of 13, assuming that non-executives are appointed simply to achieve a bare majority. The current Bill would allow a board size of 15 with a full complement of seven executives In Committee, the Minister said that the Government believed that a size of 15 was "in line with standard practice".—[Official Report, 17/11/21; col. GC 103.] It might well be standard practice for public bodies that BEIS creates, but I am sure that it is not in line with any of the literature on effective boards. I would hope that BEIS, in particular, would want to be at the forefront of best practice in this area Amendment 18 is about the executive/non-executive balance on the board, and I full support a majority of non-executive directors. I am concerned, however, that by allowing a quorum of half the members, as paragraph 10(2) does, a quorum could be achieved with only one non-executive member. My amendment requires a majority of non-executives for all board meetings, in order to ensure that important decisions are not taken by a dominant executive cadre My final amendment in this group, Amendment 16, would delete a power to pay pensions or gratuities to non-executive members, which I believe is drafting from another era and which keeps being repeated merely because it follows precedent. My noble friend the Minister said that the Government had no intention of using the power, but curiously then said that the Government wanted to retain it in the Bill. On the basis that the Government do not want to use the power, I hope my noble friend will now agree with me that it is time to read it its last rites Lastly, I will offer a comment on Amendment 17 in this group, tabled by the noble Lord, Lord Morse. I completely understand the thinking behind this amendment, but I believe we should be very wary of imposing this kind of legal straitjacket. We need ARIA to be the kind of place where high-quality people come to work. The concept of employment, which places a considerable fetter on life beyond ARIA, could well end up with exactly the wrong kind of people being attracted to work in ARIA. I agree with the earlier remarks of the noble Lord, Lord Broers, on this. I beg to move.