On Board: A Guide for Members of Statutory Boards

Roles, Responsibilities and Relationships

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 and the Scottish Government sponsor Directorate. It explains the importance of managing these relationships effectively, including a clear understanding of the strategic governance and decision-making responsibilities of the Board and the operational and statutory accountability responsibilities of the Chief Executive, including as the body's Accountable Officer.

Key Messages

• The four main functions of the Board of a public body 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.
• Board members must adhere to collective corporate responsibility, confidentiality and the highest standards of conduct.
• Individual Board members should contribute fully to Board deliberations and exercise a healthy challenge function. The 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 Board meetings and are required to submit substantive reports to summarise issues, debates and decisions.
• The Chair 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 accountable to the Board for the overall organisation, management and staffing of the public body. Where a public body manages its own budget, 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 Board should have regard to the issues and concerns of the Accountable Officer.
• Where an Accountable Officer considers that any action that they is required to take is inconsistent with the proper performance of their duties as Accountable Officer, they should obtain written authority from the body for which they are designated.
• The Board focuses on strategy, performance and behaviour – the Chief Executive advises the Board on all matters and is solely responsible for operational issues. Board members have no authority to instruct the Chief Executive or any member of staff on operational matters.

Key References

Audit and Assurance Committee Handbook

Audit Scotland – The Role of Boards

Equality Act 2010

NDPB Model Framework Document

Scottish Public Finance Manual (Accountability)

Blueprint for Good Governance as set out by the Scottish Government for NHS Boards

Fundamental Principles of Board Life

There are three fundamental principles of Board life to which all Board members (including the Chair) must adhere:

Principle 1 – Corporate Responsibility

While Board members must be ready to offer constructive challenge, they must also share collective responsibility for decisions taken by the Board as a whole. If they fundamentally disagree with the decision taken by the Board, they have the option of recording their concerns in the minutes.

However, ultimately, they must either accept and support the collective decision of the Board – or resign. Board decisions should always comply with statute, Ministerial directions (where this is provided for in statute), Ministerial guidance and the objectives of the sponsor Directorate, as appropriate (noting of course that certain bodies are required to demonstrate independence in order to maintain credibility).

Principle 2 – Confidentiality

All Board members must respect the confidentiality of 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 debate of a confidential nature inside the Boardroom is not reported outside it.

Principle 3 – Conduct

Board members have a responsibility to set an example by demonstrating the highest standards of behaviour. It is important that nothing you do or say when you are acting 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, these should be raised with the Chair in the first instance. If you fail to achieve resolution with the Chair, 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 that this is a significant step. Ultimately, as you are appointed by the Minister, a Board Member can raise significantly serious issues with the Minister.

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 (collective) 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 and/or collaborative service delivery 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 Ministers, 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 remit of the organisation, the National Performance Framework and the National Outcomes/Programme for Government.

The corporate plan will usually be approved by the Scottish Ministers. Ministers should write to sponsored 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; and
• 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; and
• 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; and
• Provides continuity of direction and effective management by making appropriate arrangements for delegation.

Role of the Board as an Employer

In most cases the Board is the employer of the individuals who work for the public body, although the management of staff, apart from the Chief Executive (whose performance is appraised by the Chair), is a matter for the executive.

The Board should be satisfied that the public body is meeting its moral and legal obligations to its employees and that the senior management team is fulfilling its obligations in this regard.

The Board is usually responsible for the recruitment of the Chief Executive and, in some cases, other senior staff. The founding legislation will contain information on the recruitment route to be followed, particularly when appointing the first Chief Executive. If you take part in a recruitment exercise, you will need to be familiar with employment legislation and any codes of best practice in relation to equal opportunities issues. You should receive training in recruitment and selection before serving in that capacity.

Role of the Board as an Employer

This includes ensuring that the body

• Has policies and procedures that comply with employment law;
• Avoids discrimination of any kind against current or potential employees and has policies to guarantee equal opportunities and value diversity;
• Has in place agreed terms and conditions of employment which should reflect the general standards set out in the Model Code for Staff;
• Has in place clear policies and strategies relating to staff; and
• Complies with all health and safety requirements.

Role of the Board Committees

Many Boards establish committees to deal with particular areas of interest outside of main Board meetings. The extent to which Boards use committees will be dependent on the size of the organisation. Examples of Board committees include:

• Remuneration Committee
• Audit Committee
• Succession Planning Committee
• Area or Regional Boards where appropriate.

Committees may also be set up to deal with specific aspects of the Board's role, such as:

• Staff Governance
• Finance
• Policy
• Development
• Clinical Governance (in the NHS).

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 ratification, 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.

Committees should provide the Board with an annual report on their work throughout the year and the assurance that the committee provides to the Board.

For some organisations individuals with specific skills and/or expertise may be invited to serve on committees as co-opted members. Co-opted members do not hold Board member status and must never constitute a majority of the membership of any committee.

The founding legislation will usually determine whether or not it is possible to appoint co-opted or independent Members to Committees. In any event, a co-opted/ independent member will have no voting rights and will only be able to give their advice in respect of committee business.

Should there be a need to have a Member co-opted to the Board, the Chair should seek advice from the Sponsor Directorate within Scottish Government on the need to obtain Ministerial approval, or to inform the Minister.

Role and Responsibilities of the 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 responsibilities 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 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' responsibilities will be summarised in their letter of appointment.

Role and Responsibilities of the 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;
• Represents the Board at meetings and stakeholder events when required;
• Contributes to strategic development and decision-making;
• Clarifies which decisions are reserved for the Board and which should be delegated;
• Monitors the reporting of performance and holds management to account through purposeful and constructive challenge and scrutiny;
• As necessary, seeks further information than that which is provided to give assurance on organisational performance;
• 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 independent oversight on issues of strategy, performance and resources;
• Behaves in accordance with the agreed Code of Conduct; and
• Establishes and promotes the public body's role in the community.

Performance Appraisal

You have been appointed to the Board because your personal skills, knowledge and experience match the criteria for the post and meet the needs of the public body. Your performance as a Board member will be regularly reviewed throughout the term of your appointment, usually by the Chair of the public body. All Board members should receive a performance appraisal every year that assesses their performance in relation to certain pre-established criteria and objectives, and provides an opportunity for meaningful dialogue.

The Chair is responsible for the annual appraisal of the Chief Executive and the Chair will be appraised on an annual basis by the relevant Scottish Government Director or Deputy Director (as appropriate).

Re-appointment to the Board

The Scottish Ministers will determine the period for which an appointment, re-appointment or extension to an appointment term is to be made, based on the needs of the public body concerned.

Ministers will consider whether the needs of a Board will most effectively be met by an appointment, re-appointment or extension to an appointment term subject to any relevant provisions in the legislation which established the public body. They will balance the continuity provided by re-appointment and term extensions with the opportunity to increase the diverse range of relevant skills, knowledge and experience on a Board by making a new appointment through open competition.

You may be re-appointed for second and subsequent terms in the same role without open competition, if you possess the skills and knowledge required on the Board at the time of re-appointment. You will only be considered for re-appointment if your performance has been properly assessed as effective during the initial period of appointment. The final decision as to whether or not you are re-appointed ultimately rests with the Minister, subject to the specific nature of your public body's constitution, the needs of the Board for the foreseen period of the re-appointment and the terms upon which you are appointed. 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.

Nomination to the Board of Another Organisation

Some public bodies have the right to nominate one or more Board members to the Board of another organisation. If you are nominated to be a Board member on a public body which is also a limited company, you will assume personal responsibilities as a Company Director under the Companies Acts. Any breach of your legal responsibilities as a Company Director could have serious consequences for you personally. If you are in any doubt as to your position, you should take legal advice from the Board's legal advisers.

Civil Liability as a Board Member

If you, as an individual Board member, incur a civil liability in the course of carrying out your responsibilities for the Board, you will not have to pay anything out of your own pocket provided that you have acted honestly and in good faith. However, this indemnity does not protect you if you have acted recklessly or in bad faith.

Removal from Office

In many cases, the founding legislation or the Board's standing orders will set out the grounds on which you may be removed as a Board member, such as:

• Bankruptcy
• Becoming incapable of performing your duties as a Board member
• Consistent absence from Board meetings
• Being convicted of an indictable offence.

Charity Trustees

Some public bodies hold charitable status. This has implications for Board members who will also act as charity trustees for the purposes of the Charities and Trustee Investment (Scotland) Act 2005. A charity trustee is a person who has the general control and management of the administration of a charity. A charity may refer to its charity trustees in a number of ways including management committee members, directors and Board members. If a Board member is also the trustee of the charity, they will have the same general duties of any other charity trustee as set out at section 66 of the 2005 Act. The Office of the Scottish Charity Regulator's guidance publication, 'Guidance for Charity Trustees', gives further details on the duties of charity trustees.

The Role of Non-Ministerial Appointed Members

The vast majority of Board members in Scotland are appointed by Scottish Ministers; however there are instances where Board composition varies to include a mix of directly elected or local authority nominated members. Provision for such arrangements will normally be set out in the public body's enabling legislation.

In circumstances where it is considered appropriate, a mix of Board membership is generally designed to deliver a balance between local and national representation in the decision-making process.

However, regardless of composition, all Boards are expected to play a key role in the delivery of the Scottish Government's Purpose through alignment with the National Performance Framework, and are required to adhere to the established principles of public sector accountability and governance set out in this guidance, including collective responsibility for decisions and actions and confidentiality. Further clarification about roles and responsibilities should be provided by the Chair and/or the Chief Executive.

Role and Responsibilities of the Chair

The Chair has additional responsibilities over and above those of Board members, particularly in relation to leadership, the conduct of Board business, and developing a close working relationship with the Chief Executive. The Chair of a sponsored body is accountable to the Scottish Ministers and, in common with any individual with responsibility for devolved functions, may also be held to account by the Scottish Parliament. The Chair of a Non-Ministerial body is only held to account by the Scottish Parliament. Communications between the public body Board and the Scottish Ministers should normally be through the Chair. They are responsible for ensuring that the public body's policies and actions support the Scottish Ministers' wider strategic policies if these apply to the body and that its affairs are conducted with probity. The Chair is appraised by the relevant Director or Deputy Director on behalf of Ministers. Mutual investment in a constructive relationship between the Chair and the Scottish Government sponsor Directorate is important to supporting the effective performance and delivery of the public body.

Succession planning should be led by the board chair, with the support of the Scottish Government sponsor and the knowledge and expertise of the Chief Executive and other executive officers. Plans should take account of the board's composition, and the public body's purpose, strategic objectives, and operational context, and reflect those in aims and plans for developing and retaining current board members, and attracting and developing prospective new board members.

The Scottish Government has created a Governance Hub for public body boards that includes a module on succession planning. It is anticipated that boards will actively consider the guidance provided in that module and the range of activities that they can engage in in order to plan effectively for succession. Attracting and retaining new board members can also dovetail with other board activities and can include measures such as meaningful community outreach and engagement and mentoring, training and shadowing schemes for people who share protected characteristics which are currently under-reflected on the board in question.

Role and Responsibilities of the Chair

The Chair

• Leads representation and links with Ministers and Scottish Parliament;
• 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 strategic planning;
• 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;
• Leads the Board's approach to succession planning to ensure the Board is diverse and effective;
• Ensures that the Board, in accordance with recognised good practice in corporate governance, is diverse both in terms of relevant skills, experience and knowledge appropriate to directing the public body's business, and in terms of protected characteristics under the Equality Act;
• Ensures the Scottish Ministers are advised of the body's needs when Board vacancies arise;
• Ensures the Board members are fully briefed on terms of appointment, duties, rights and responsibilities;
• Together with the other Board members, receives appropriate induction training, including on financial management and reporting requirements and, as appropriate, on any differences that may exist between private and public sector practice;
• Ensures there is a Code of Conduct for Board members in place, approved by the Scottish Ministers;
• Assesses the performance of individual Board members on a continuous basis and undertakes a formal appraisal at least annually; and
• In consultation with the Board as a whole, as appropriate, is responsible for undertaking an annual appraisal of the performance of the Chief Executive.

Role and Responsibilities of the Chief Executive

The Chief Executive of the public body is employed and appointed by the Board (with the approval of Scottish Ministers). They are the Board's principal adviser on the discharge of its functions and will be accountable to the Board. The Chief Executive's role is to provide operational leadership to the public body, and ensure that the Board's aims and objectives are met and the public body's functions are delivered and targets met through effective and properly controlled executive action. The Chief Executive's general responsibilities will include performance management and staffing of the public body. In summary, the Board focuses on strategy, performance and behaviour – the Chief Executive advises the Board on all matters and is solely responsible for operational issues.

Role and Responsibilities of the Chief Executive

Chief Executive

• Advises the Board on the discharge of its responsibilities – as set out in the Framework Document, in the founding legislation and in any other relevant instructions and guidance issued by or on behalf of the Scottish Ministers – and implements the decisions of the Board;
• Ensures that financial considerations are taken fully into account by the Board at all stages in reaching and executing its decisions, and that appropriate financial appraisal and evaluation techniques, consistent with the Scottish Public Finance Manual, are followed;
• Prepares the public body's corporate and business plans, in the light of the strategic aims and objectives agreed by the Scottish Ministers where the body is sponsored;
• Advises the Board on the performance of the public body compared with its aims and objectives;
• Ensures effective relationships with Scottish Government officials – across the wider organisation, as necessary, and with the sponsor Directorate in particular;
• Ensures that timely forecasts and monitoring information on performance and finance are provided to the Scottish Government; 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 Board, the Scottish Government 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; and
• Establishes appropriate documented internal delegated authority arrangements consistent with the Scottish Public Finance Manual.
• The Chief Executive/Senior Official has ultimate responsibility for the day to day management of health and safety for their staff and any others affected by their activities as per current legislation.

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 as Portfolio Accountable Officers. The Portfolio Accountable Officer has specific responsibilities with regard to a sponsored public body with its own Accountable Officer. These are set out in a Memorandum sent by the Principal Accountable Officer on appointment. The Portfolio Accountable Officer has no responsibilities in respect of Non-Ministerial bodies.

Where a public body manages its own budget, the Chief Executive will normally be designated as its Accountable Officer.

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).

It is incumbent on the Chief Executive to combine their Accountable Officer responsibilities to the Scottish Parliament with their wider responsibilities to the Board. The Board and Chair should be fully aware of, and have regard to, the Accountable Officer responsibilities placed upon the Chief Executive.

If the Board has serious concerns about the actions and performance of the public body's Accountable Officer, it can recommend to the Principal Accountable Officer that Accountable Officer status should be withdrawn or suspended. If the Board instructs the Accountable Officer to carry out actions which the AO considers are inconsistent with the proper discharge of their Accountable Officer duties, the Accountable Officer should request a written authority be provided from the Board to proceed, this will then be published and sent to the Auditor General for Scotland and the Public Audit Committee.

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 applicable guidance issued by the Scottish Ministers, in particular the Scottish Public Finance Manual;
• Has a statutory duty to obtain written authority from the Board/Chair before taking any action which they consider would be inconsistent with the proper performance of the Accountable Officer functions. The Accountable Officer should also notify, where considered appropriate, the relevant Portfolio Accountable Officer;
• Represents the public body before the Public Audit Committee of the Scottish Parliament; and
• May have their Accountable Officer status withdrawn or suspended if the Principal Accountable Officer has serious concerns about their actions and performance.

Role and Responsibilities of the Minister

Every public body is expected to be aware of, and work within, a strategic and operational framework determined by the Scottish Ministers. Most fall within the portfolio of a specific Scottish Minister who will set overall policy aims, define expected outcomes arising from implementation of that policy and review progress against outcomes.

Public bodies are sometimes described as operating at 'arm's length' from Ministers but this does not mean that they are outwith Ministerial control. The Minister will decide how much independence and flexibility the public body should have, depending on its size, constitution, the nature of its functions and the legislation under which it operates.

Ministers may seek to increase their understanding of the public body through formal meetings with the public body's Chair and Board and other more informal events. The founding legislation for a public body may also give Ministers the power to issue a formal direction requiring it to take particular action. However, the use of such formal powers is extremely rare.

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 for most public bodies;
• Makes appointments to the Board;
• As well as the Chair, the Minister is responsible for succession planning, informed by the Board, and determining what skills, knowledge, experience and other attributes are required when roles on boards are to be filled and appointing or recommending for appointment the Chair and Members;
• Approves the terms, conditions and remuneration of the Chair and Board members;
• Approves the Chief Executive's and staff pay remit in line with Scottish Government Pay Policy;
• Lays accounts, together with the annual report, of sponsored public bodies before Parliament (Non- Ministerial public bodies do this themselves);
• Fulfils any responsibilities specified in the founding legislation, charter or articles of association, such as approving the appointment of the Chief Executive; and
• Issues letters of strategic guidance to sponsored public bodies.

The Role of the Scottish Government Sponsor Directorate

The day-to-day link between a sponsored body and the Minister is provided by the sponsor Directorate. Within the sponsor Directorate, a sponsor team will ensure that the public body is adequately briefed about the Scottish Government's policies and priorities. That team will monitor the body's activities on behalf of the Minister. However, civil servants from the sponsor Directorate will not normally attend Board meetings of the public body. On any occasion that they do, they should do so as observers, not participants, and are not party to decisions taken by the Board.

Responsibility for ensuring Non-Ministerial public bodies are appropriately briefed about the Scottish Government's policies lies with the relevant Director-General.

The sponsor team prepares a Framework Document which sets out formally the relationship between the public body and the Minister and officials. While Framework Documents vary according to the functions, powers and finances of the public body, the Model Framework in the Scottish Public Finance Manual provides a useful template.

The Framework Document for a Non-Ministerial public body is prepared by the body itself based on good practice examples in existence.

Where appropriate the Framework Document will be drawn up by the Scottish Government, in consultation with the public body, and it will be reviewed at least every two to three years.

The key focus for much of the sponsorship role is to support sponsored bodies in being accountable, high performing organisations, delivering Value for Money services, which meet people's needs, as outlined in their business plan. An excellent sponsorship function is underpinned by two key elements:

• good governance structures and processes; and
• good relationships with the public body, based on openness, trust, respect and mutual support.

Model Framework Document

Contents

• The legislative basis under which the public body was established and its statutory functions, duties and powers;
• Aims and objectives, how these are to be delivered and the key targets to be achieved;
• The roles and responsibilities of Ministers, a sponsor Directorate, the Chair, Board members, the Chief Executive and other senior officials; and the public body’s accountability to Ministers (where appropriate) and to the Scottish Parliament;
• Arrangements for the planning, budgeting and control of the public body’s activities and expenditure, including funding, preparation of corporate and business plans and setting of performance targets;
• Arrangements for preparation and publication of the annual report and accounts and external audit procedures; and
• Responsibilities of the public body for recruitment, pay, grading and other personnel matters.

Managing Relationships

Strategic and Operational Responsibility

It is important that the Board maintains a focus on strategy, performance and behaviour and is not diverted by detailed operational matters which are the responsibility of the Chief Executive and the Senior Executive Management Team.

The Board should clearly differentiate their role in strategic governance and leadership from that of operational management. The Board should protect the Chief Executive and Senior Executive Management Team from individual Board members becoming involved in operational matters. Individual Board members have no authority to instruct the Chief Executive or any member of their staff on such matters.

However, it is important that the Board are aware of overall performance in respect of the operational matters.

Board Members have a duty to be aware of operational issues where they could be, or become significant to the delivery of the body's objectives and should be aware of the action to be taken to resolve such issues.

Decision-Making

The Board should give all matters reserved to them due consideration and take ownership of the decisions taken. For instance, the Board should not simply 'rubber stamp' strategy proposals or a draft corporate plan put forward by the Chief Executive. It is important that both the Chief Executive and the Board understand the distinct nature of their roles.

Audit Scotland's report on The Role of Boards provides useful information about the operation of Boards in the public sector, including a series of questions at Annex 3 for Boards and individual Board members to ask themselves about how well they are working.

The Chair and Board Members

Individual Board members should contribute fully to Board deliberations and exercise a healthy challenge function. This expectation extends to Executive Directors (where, as is the case in many NHS bodies, they are Board members). However, it is important that no individual Board member (or Chair) dominates the debates or has an excessive influence on Board decision-making. The Chair has an important role to play in ensuring that all Board members are enabled and encouraged to contribute to Board discussions.

As a Board member, you should support the Chair in their efforts to conduct Board business in an efficient and effective manner. However, you should not hesitate to challenge the Chair if you believe that a decision is wrong (even illegal) or is in contravention of the Framework Document or formal instruction from Ministers, or has been taken without a full and proper debate.

Relationships with Stakeholders

The Board needs to consider the concerns and needs of all stakeholders and actively manage its relationships with them.

Stakeholders – and the general public – should have access to full and accurate information on the decision-making processes and activities of each public body and have the opportunity to influence decisions and actions.

Stakeholder engagement should include encouraging people to consider applying for roles on the board and highlighting any shadowing or mentoring schemes that the board has established for succession planning purposes.

Scottish Ministers expect all public bodies to communicate clearly with their stakeholders, make information widely available, consult thoroughly and imaginatively and seek feedback on the public body's performance, acting on it as appropriate.

Communication with Stakeholders

The Board should consider

• Holding an Annual Open Meeting;
• Holding Board meetings in public, unless there is a good reason not to;
• Publishing summary reports and/or minutes of meetings;
• Inviting evidence from members of the public in relation to matters of public concern;
• Consulting stakeholders and users on a wide range of issues; and
• Making business and corporate plans and the Annual Report and Accounts widely available.

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.

From April 2017, 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.

Further Information and Contacts

The Data Protection Act 2018

Equality Act 2010

Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012

Guidance on Succession Planning for Public Bodies

Freedom of Information (Scotland) Act 2002

Information Commissioner’s Office (Data Protection)

Human Rights Act 1998

Strategic engagement between the Scottish Government and Scotland’s NDPBs

The Commissioner for Ethical Standards in Public Life

Scottish Information Commissioner (FOI)

Standards Commission for Scotland