On Board - A guide for Board Members of Public Bodies in Scotland (April 2015)

Role of the Board

The four main functions of the Board are: to ensure that the body delivers its functions in accordance with Ministers' policies and priorities; to provide strategic leadership; to ensure financial stewardship; and to hold the Chief Executive and senior management team to account. It has corporate responsibility, under the leadership of the Chair, for the following:

• Taking forward the strategic aims and objectives for the body agreed by the Scottish Ministers;
• Determining the steps needed to deal with changes which are likely to impact on the strategic aims and objectives of the body or on the attainability of its operational targets;
• Promoting the efficient, economic and effective use of staff and other resources by the public body consistent with the principles of Best Value, including, where appropriate, participation in shared services arrangements;
• Ensuring that effective arrangements are in place to provide assurance on risk management, governance and internal control;
• Taking into account relevant guidance issued by Scottish Ministers;
• Receiving and reviewing regularly financial information concerning the management and performance of the public body and being informed in a timely manner about any concerns regarding the activities of the public body;
• Ensuring systems are in place to enable early notification to be provided to the Scottish Government about emerging issues which will impact on the operation or reputation of the public body;
• Appointing (with the approval of the Scottish Ministers) the public body Chief Executive and, in consultation with the Scottish Government, setting appropriate performance objectives and remuneration terms linked to these objectives which give due weight to the proper management and use of resources within the stewardship of the public body and the delivery of outcomes; and
• Demonstrating high standards of corporate governance at all times, including openness and transparency in its decision-making.

Representing Ministerial Interests

In the majority of cases, Boards of public bodies are appointed by Ministers to ensure delivery of Ministerial policies. Board members should be clear about Ministerial policies and expectations for their public body. If they are in any doubt on this point, they should seek clarification from the Chair or sponsor Directorate.

Providing Strategic Leadership

The Board usually fulfils its leadership role by developing the public body's corporate strategy. The Board then agrees a corporate plan to turn the strategy into action over a period of about three years and promotes continuous improvements in corporate performance over this period. Both the strategy and corporate plan must align with the National Performance Framework and the National Outcomes and indicate how the public body will contribute to public service reform.

The corporate plan will usually be approved by the Scottish Ministers. Ministers should write to public bodies at least annually setting out the policies and priorities which they wish them to pursue.

PROVIDING STRATEGIC LEADERSHIP

The Board

• Develops and agrees the organisation's strategy;
• Sets cost effective plans to implement the strategy;
• Ensures that the strategy and plans are aligned with the National Performance Framework and the public body's statutory duties, and the policies and priorities of the Scottish Government;
• Reviews the public body's corporate and business plans and performance on a regular basis, including their own performance as a Board;
• Establishes a performance management framework which enables under-performance of the body to be addressed quickly;
• Establishes the values and standards of the organisation and ensures that the organisation adopts and complies with Codes of Conduct for Staff and the Board;
• Ensures that the highest standards of governance are complied with, that the organisation complies with all Ministerial guidance, its Framework Document and legislation, and that a framework of prudent and effective controls is in place to enable risks to be assessed and managed;
• Focuses on the positive impact that the organisation is making in the outside world, i.e. effects on customers and citizens;
• Ensures that the public body is a Best Value organisation and delivers Value for Money for the public sector as a whole.

Ensuring Financial Stewardship

The Board is collectively responsible for ensuring that the organisation adheres to strict standards of financial propriety, and complies with the financial requirements contained in the Framework Document and the Scottish Public Finance Manual.

ENSURING FINANCIAL STEWARDSHIP

The Board

• Satisfies themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible;
• Considers and approves forward budget allocations and financial targets within key strategic and planning documents, such as corporate and operational business plans;
• Monitors the financial position against budget allocations and key financial targets and takes corrective action where required;
• Has regard to the issues and concerns of the Accountable Officer;
• Approves high value, novel or contentious expenditure proposals, for submission to the Scottish Government and Ministers for approval when it is necessary/appropriate to seek approval from the Scottish Government.

Holding the Chief Executive to account

It is the Board's duty to hold the Chief Executive (and senior management team) to account for the operational management of the organisation and the delivery of agreed plans on time and within budget.

HOLDING THE CHIEF EXECUTIVE TO ACCOUNT

The Board:

• Ensures an effective team and management arrangements are in place at the top level of the organisation;
• Oversees the development (and review) of the corporate strategies, plans and policies of the public body;
• Ensures the operation and work of the public body is closely aligned with the work of other service delivery public bodies in support of the wider aims of public service delivery and reform;
• Oversees the development of performance and key financial targets;
• Monitors performance and ensures that corrective action is taken to address any under-performance;
• Provides continuity of direction and effective management by making appropriate arrangements for delegation.