Publication - Advice and guidance

On Board: A Guide for Members of Management Advisory Boards

Published: 31 March 2023
Directorate: Public Service Reform Directorate
Topic: Public sector
ISBN: 9781805256175

This guidance is for all those appointed by the Chief Executive to be a member of management advisory boards.

Roles, Responsibilities and Relationships : Guidance Note 3

Overview

Every member of a Board of a public body must be clear about their specific roles and responsibilities if the Board and the public body are to operate successfully.

This section outlines the roles and responsibilities of the Board, its committees, individual board members and key internal and external stakeholders, such as the Chief Executive, Scottish Ministers, the Scottish Government and the Scottish Parliament.

It explains the importance of managing these relationships effectively, including a clear understanding of the operational and statutory accountability responsibilities of the Chief Executive, including as the body's Accountable Officer.

Key Messages

The main role of the Management Advisory Board is to assist the body to deliver its functions either on behalf of Ministers or as a Non-Ministerial body. Members of the Board offer strategic advice and constructive challenge to the Chief Executive; seek to improve performance and promote good governance; and hold officials to account for identifying and managing risk. Members of Audit Committees provide assurance to the Accountable Officer regarding risk, systems and performance.
Board members must adhere to the fundamental principles of Board life – confidentiality and the highest standards of conduct.
Individual board members should contribute fully to Board deliberations and exercise a healthy challenge function. The Chief Executive or meeting Chair will ensure that all board members have an opportunity to contribute to board discussions.
Committees are established to deal with particular areas of interest outside main Management Advisory Board meetings and are required to submit substantive reports to summarise issues, debates and decisions.
The Chief Executive or meeting Chair (where someone other than the Chief Executive chairs the Board) has additional responsibilities to board members, particularly leadership, directing a diverse team and harnessing the benefits of this, and the conduct of Board business.
The Chief Executive is entirely responsible for the overall organisation, management and staffing of the public body. The Chief Executive is normally designated as its Accountable Officer with responsibility for the proper management of public funds under the public body's control.
The Chief Executive is solely responsible for operational issues. The Board helps the Chief Executive and senior management team focus on strategy, performance, risk and behaviour.
The Framework Document sets out how the organisation will operate and its relationship with the Scottish Government. It describes the financial and wider accountabilities of the organisation and its approach to staffing and other organisational matters.

Key References

Audit and Assurance Committee Handbook

Audit Scotland – The Role of Boards

Equality Act 2010

Model Framework Documents

Scottish Public Finance Manual (Accountability)

Fundamental Principles of Board Life

There are two fundamental principles of Board life to which all advisory board members must adhere:

Principle 1 – Confidentiality

All board members must respect the confidentiality of how decisions are made and sensitive information held by the public body. This includes commercially sensitive information, personal information and information received in confidence by the organisation. It is also essential that discussion of a confidential nature inside the Boardroom is not reported outside it. Board members should not publicly criticise the organisation's decisions.

Principle 2 – Conduct

All board members should set an example by demonstrating the highest standards of behaviour. It is important that nothing you do or say when you are acting in your capacity as a Board member tarnishes in any way the reputation of the public body or the Board. If you have specific concerns about the manner in which the public body is being run, or about how your critical challenge role is being taken into account, these should be raised with the Chief Executive in the first instance. If you fail to achieve resolution with the Chief Executive, it is open to you to take them to the relevant senior civil servant in the Scottish Government (usually a Director or Director-General) – but you should appreciate this is a significant step. Your Framework Document should set out the lines of accountability for your public body.

The principle of Corporate Responsibility which applies to Statutory Boards does not apply to members of Advisory Boards as the Board has no formal decision-making responsibilities.

Role of Management Advisory Boards

The main role of the Management Advisory Board is to assist the body to deliver its functions either on behalf of Ministers or as a Non-Ministerial body. This is achieved through the provision of strategic advice and support to the Chief Executive, and through constructive challenge. Advisory board members are not appointed to hold the Chief Executive and senior management team to account.

The Board provides the Chief Executive and the senior management team with support, advice and challenge. Advice from non-executives and the outside perspective they bring help the Chief Executive and senior management team make well-considered and well-rounded decisions.

Non-executives can often be more comfortable in providing challenge to senior management, as they do not have a line management relationship. The critical challenge function of Non-executives helps decision-makers consider their rationale, motivations, logic and principles in a way that should both help the executive to make good decisions and make the reasons for decisions more transparent.

The Chief Executive should encourage advice and challenge and offer Non-executives and executives support for frank and open discussion.

The Management Advisory Board

Key Functions

Strategic Advice – brings external perspectives, stimulates innovation and brings fresh eyes to issues and challenges, acts as a "critical friend".
Improving Performance – ensures clarity and rigour in scrutiny, measurement and evaluation in delivering objectives and outcomes.
Promoting Good Governance – helps bodies to discharge their functions effectively.
Audit – members of the Audit Committee provide assurance to the Accountable Officer regarding risks, systems and performance.
Risk – seeks assurance from officials about how they are identifying and managing risks within their defined areas of responsibility, and ensures risk strategies are fit for purpose, monitored and evaluated.

Issues on which the Management Advisory Board will provide support, advice or challenge will usually include:

developing the strategic aims and objectives of the body and 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;

developing and reviewing the corporate, business and budget plans of the public body;
promoting the efficient, economic and effective use of staff and other resources by the public body consistent with the principles of Best Value;
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 (as appropriate) and ensuring strategy and plans are aligned with the National Performance Framework – board members should be clear about the extent to which Ministerial priorities apply to their respective public bodies;
scrutinising financial and performance information concerning the management of the public body and being informed in a timely manner about any concerns regarding the activities of the public body;
where the public body is an employer, ensuring that employment policies and procedures comply with the Civil Service Management Code;
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, and;
encouraging and demonstrating high standards of corporate governance at all times, including openness and transparency in decision-making.

Role of the Body's Committees

Many public bodies establish committees to deal with particular areas of interest outside of main Board meetings.

Where appropriate, committees can allow for specialist areas relating to the Board's role to be debated in detail by members with the appropriate knowledge or skills. The key points can then be presented to the full Board for discussion, making more effective use of scarce time. As the Board cannot be expected to understand the issues dealt with by the committee from the minutes alone, it will generally require substantive reports from the committee to summarise issues, debates and recommendations.

Role of the Individual Board Member

Your specific role as a board member will depend on the role of the Board to which you have been appointed and the capacity in which you have been appointed, but will normally cover a number of general duties and responsibilities.

Individual board members should act in accordance with the role of the Board as a whole and comply at all times with the Code of Conduct adopted by the public body and with the rules relating to the use of public funds and to conflicts of interest. In this context "public funds" means not only any funds provided to the public body by the Scottish Ministers or the Scottish Parliament but also any other funds falling within the stewardship of the public body, including trading and investment income, gifts, bequests and donations. General guidance on board members' roles will be summarised in their letter of appointment.

Performance Appraisal and Appointments

Members are appointed to the Board because their personal skills, knowledge and experience match the criteria for the post and meet the needs of the public body.

Performance as a board member is regularly reviewed throughout the term of appointment by the Chief Executive. In some cases, an independent Chair may be in place, who will contribute to this process. The Chief Executive will consider whether the needs of the Board will most effectively be met by an appointment, re-appointment or extension to an appointment. Appointments of non-executive members to Management Advisory Boards are not regulated by the 2013 Code of Practice for Ministerial Appointments to Public Bodies in Scotland published by the Commissioner for Ethical Standards, but Chief Executives are expected to have regard to the Code.

The Code states that members may be re-appointed for second and subsequent terms in the same role without open competition, if they possess the skills and knowledge required on the Board at the time of re-appointment and their performance has been properly appraised as effective. No member's total period of appointment in the same position may exceed eight years. This eight-year maximum is based on the aggregate time in post and applies regardless of whether the time in post was continuous or not. The terms and conditions of re-appointment should be outlined in a re-appointment letter.

Role of the Individual Board Member

The Board Member:

understands the operational environment in which their public body operates within the context of the wider public service delivery landscape;
attends board meetings on a regular basis and is well prepared by reading relevant papers in advance, and, if necessary, seeks further information to ensure their understanding;
attends training events and keeps up to date with subjects relevant to the public body's work;
contributes to the work of any committees that have been established by the Board;
contributes to strategic development and discussion;
questions and, as necessary, challenges, proposals made by fellow board members and the executive team constructively and carefully to reach and articulate a considered view on their suitability;
provides a creative contribution to the Board by providing an independent perspective on issues of strategy, performance and resources;
where appropriate, establishes and promotes the public body's role in the community.

Role and Responsibilities of the Chief Executive

The Chief Executive of the public body is appointed by, or on the recommendation of, the Scottish Ministers to discharge certain functions – either administratively as head of an Executive Agency or by statute as a Non-Ministerial Officeholder.

The Chief Executive is responsible for all aspects of the operation of the body, any policy developed and any policy or service delivered. The Chief Executive is personally accountable either to the Scottish Ministers and the Scottish Parliament (for Executive Agencies) or directly to the Scottish Parliament (for Non-Ministerial Offices).

Role and Responsibilities of the Chief Executive

The Chief Executive:

ensures that financial considerations are taken fully into account at all stages in reaching and executing decisions, and that appropriate financial appraisal and evaluation techniques, consistent with the Scottish Public Finance Manual, are followed;
agrees the public body's corporate and business plans;
ensures effective relationships with stakeholders;
ensures that timely forecasts and monitoring information on performance and finance are provided to the Scottish Government as appropriate; that the Scottish Government is notified promptly if overspends or underspends are likely and that corrective action is taken; and that any significant problems, whether financial or otherwise, and whether detected by internal audit or by other means, are promptly notified to the Scottish Government;
ensures robust performance and risk management arrangements, consistent with the Scottish Public Finance Manual, are in place to support the achievement of the public body's aims and objectives and facilitate comprehensive reporting to the Scottish Ministers or the Scottish Parliament and the wider public;
ensures that the public body adheres, where appropriate, to the Scottish Government's Programme and Project Management Principles
ensures that adequate systems of internal control are maintained by the public body, including effective measures against fraud and theft consistent with the Scottish Public Finance Manual
establishes appropriate documented internal delegated authority arrangements consistent with the Scottish Public Finance Manual.

Role and Responsibilities of the Accountable Officer

The Permanent Secretary to the Scottish Government is the Principal Accountable Officer of the Scottish Administration. The Principal Accountable Officer designates Directors-General (DGs) as Portfolio Accountable Officers. The Portfolio Accountable Officer has specific responsibilities with regard to a public body with its own Accountable Officer. These responsibilities are set out in a Memorandum sent by the Principal Accountable Officer on appointment of an Accountable Officer.

Role and Responsibilities of the Accountable Officer

The Accountable Officer

signs the annual accounts and associated governance statements;
ensures the propriety and regularity of the public body's finances and that there are sound and effective arrangements for internal control and risk management;
ensures that the resources of the public body are used economically, efficiently and effectively, and that arrangements are in place to secure Best Value for the organisation and deliver Value for Money for the public sector as a whole;
ensures compliance with relevant guidance issued by the Scottish Ministers, in particular the Scottish Public Finance Manual;
represents the public body before the Public Audit and Post-Legislative Scrutiny Committee of the Scottish Parliament;
may have their Accountable Officer status withdrawn or suspended if the Principal Accountable Officer has serious concerns about their actions and performance.
Where a public body manages its own budget, the Chief Executive will normally be designated as its Accountable Officer, but this is not always the case. If the Accountable Officer is not the Chief Executive, their respective roles will be clearly set out in the Framework Document.

Accountable Officers are personally answerable to the Scottish Parliament for the exercise of their functions, as set out in the Memorandum to Accountable Officers for Other Public Bodies issued to the Chief Executive at the time of formal designation (normally at the same time as they are appointed as Chief Executive).

Role of Management Advisory Board Chair

The role of chairing the Management Advisory Board may not always fall to the Chief Executive. It may be appropriate in some circumstances for the Chief Executive to delegate that role to a non-executive board member. The Chair has additional responsibilities over and above those of board members, particularly in relation to leadership and the conduct of board business.

Role Of The Management Advisory Board Chair

The Member Chairing

leads the Board, ensures that the Board has the ability to carry out functions effectively and chairs Board meetings;
leads the Board's approach to the establishment of committees and ensures the Board considers substantive reports from any committees established;
ensures that the work of the Board and any committees is subject to regular self-assessment and that the Board is operating strategically and effectively;
has an input into the appraisal process as carried out by the Chief Executive.

The Chief Executive

leads representation and links with Ministers and Scottish Parliament;
leads the Board's approach to strategic planning;
ensures the Board has a balance of skills appropriate to directing the public body's business, in accordance with recognised good practice in corporate governance;
is appraised annually by the relevant Scottish Government Director-General or Director;
ensures the board members are fully briefed on terms of appointment, duties, rights and responsibilities; and
ensures there is a Code of Conduct for members in place, if applicable.

Role and Responsibilities of the Minister

Public bodies in the Scottish Administration work within a strategic, policy and operational framework determined by the Scottish Ministers. Executive Agencies fall within the portfolio of a specific Scottish Minister who will set overall policy aims, define expected outcomes arising from implementation of policy and review progress against outcomes. Agency Chief Executives will have close and direct relationships with their portfolio Ministers.

Non-Ministerial Offices such as Registers of Scotland and the National Records of Scotland have a less direct relationship with Ministers. These bodies are not subject to direction of Ministers in the exercise of their statutory functions.

Ministers may seek to increase their understanding of the public body through formal meetings with the public body's Chief Executive and other more informal events.

As Ministers are responsible to the Scottish Parliament, they may be asked at any time to attend Parliament or one of its Committees to answer questions from Members of the Scottish Parliament (MSPs) about the activities of public bodies within their remit.

Role and Responsibilities of the Minister

The Minister

considers and approves the public body's strategic objectives and the policy and performance framework within which it operates;
secures and approves the allocation of public funds for public bodies;
approves key documents such as the Framework Document and corporate plan;
approves the Chief Executive's and staff pay in line with Scottish Public Sector Pay Policy.

Role of the Scottish Government

The day-to-day link between the public body and the Minister depends on the status of the public body. Executive Agency Chief Executives have a direct relationship with the Scottish Ministers for whom they develop policy or deliver a service. The Executive Agency is also part of the Scottish Government. It will be for the Agency to make sure it is adequately briefed about the Scottish Government's policies and priorities. The relevant DG, as Portfolio Accountable Officer, has a leadership role in relation to an Executive Agency.

DGs are responsible for overseeing the relationship between Scottish Ministers and Agencies. They ensure that Agencies are part of portfolio management arrangements, including business planning, performance reporting, and risk management. Where appropriate, these responsibilities may be delegated to a Director or Deputy Director as Senior Lead Officer. DGs are usually responsible for appraising the Chief Executive's performance, but in certain circumstances may also delegate this role to an appropriate SG Director.

DGs provide support and constructive challenge to ensure that operational accountability is being exercised properly and that Agencies are high-performing and continuously improving organisations. Appropriate arrangements will be in place to achieve effective, high-level performance monitoring and review. As part of their advice to Ministers about strategic matters, DGs provide advice about the strategic direction and contribution of Executive Agencies.

For Non-Ministerial Offices there may be policy links with Scottish Government officials but less direct contact with Ministers. The DGs are also unlikely to have a direct leadership role. Non-Ministerial Offices operate outwith the remit of Portfolio Accountable Officers, with the Accountable Officer instead reporting directly to the Principal Accountable Officer.

Role of the Senior Lead Officer

The report 'Making the most of Next Steps' (1991) by Sir Angus Fraser gave rise to the concept of the "Fraser Figure". The concept of the "Fraser Figure" role was originally intended to provide a senior link between Agency Chief Executives and the parent government department.

Drawing on the original concept of the "Fraser Figure", where appropriate, the Portfolio AO may delegate some, or all, of their public body duties to a Director or Deputy Director as Senior Lead Officer. The Senior Lead Officer is a member of Scottish Government staff at Senior Civil Service level, from the relevant policy area. Other SG officials may support the Portfolio AO and Senior Lead Officer in a liaison role.

If appointed, the Senior Lead Officer will:

develop and advise Ministers on the strategic direction of the Agency in the context of wider departmental or cross-governmental objectives;
agree a framework for strategic performance management;
advise Ministers on their response to strategic performance information;
advise the Chief Executive on steering the Agency's activities to ensure that they most effectively support the delivery of departmental objectives, and;
ensure that the Agency has the delegations and authorities necessary for effective delivery and continuous improvement.

Diversity, Equality and Human Rights

Diversity

The Board should give specific consideration to the impact on equality of opportunity when developing policies and making decisions. The Board should also look at how information can be presented to different groups in formats that best suit their needs and find ways of consulting effectively with people with different needs and backgrounds.

Public bodies are expected to take positive action to support and enable greater diversity of Ministerial appointments, through:

taking an active role in succession planning, and providing advice to Ministers about the Board's membership needs, both for new and re-appointments;
ensuring that suggested criteria for the selection of new board members meet the needs of the body, are unbiased and are not unnecessarily restrictive;
taking action both during and between board member recruitment exercises to attract the broadest range of candidates to the work of the Board;
providing mentoring, shadowing and training opportunities for potential board members, and;
establishing a succession planning committee.

Public authorities are required to report on the steps they are taking towards diversity amongst their members in terms of relevant protected characteristics. This will be through the mainstreaming reports that are published every two years as part of the requirements of the Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012 and should form part of Board succession planning.

Equality

Equality and fairness are at the heart of the Scottish Government's ambition for a socially just and inclusive Scotland. They are central to its purpose, outcomes and approach to public service reform.

The Equality Act 2010 requires public authorities to: eliminate discrimination, harassment and victimisation; advance equality of opportunity; and to foster good relations between persons who share a relevant protected characteristic and those who do not. This is known as the Public Sector Equality Duty (PSED).

Scottish public authorities must have "due regard" to the need to eliminate unlawful discrimination, advance equality of opportunity and foster good relations.

Scottish Ministers introduced regulations in the Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012 placing specific duties on Scottish public authorities to help implement the PSED. These are also known as the Scottish Specific Duties.

Public bodies should ensure that they operate in a way which promotes equality of opportunity and all policies must meet the requirements of equality legislation.

Human Rights

Under the Human Rights Act 1998, it is unlawful for a public body to act in a way that is incompatible with a right under the European Convention on Human Rights. The Board should seek assurances from the Chief Executive that the policies and procedures in place within the public body are compatible with Convention rights. The Board should also be committed to protecting the privacy of individuals in relation to how personal information is used as required by the Data Protection Act 2018.

As mentioned in Guidance Note 4 public bodies should also assess the human rights record of any individual or company before entering into an investment relationship with them. The Guidance on Due Diligence: Human Rights sets out recommendations on how these assessments should be conducted.