UKGI00045860
UKGI00045860
UKGI-1
UK Government Investments Limited (the “Company”)
Terms of reference for the Company’s Chairman (the “Chairman”)
Role
This Board
receives its
authority from
Scope of the
Board oversight
and
responsibility
To promote the highest standards of corporate governance,
assisted by the Senior Independent Director, Deputy Chairman
and Chief Executive, which is meaningful, relevant and
understood throughout the business so that we all do the right
thing, the right way.
To be accountable to our stakeholders for the effectiveness of
the Board and to build a sustainable, respected business that
meets the requirements of UKGI's key stakeholders.
The Board receives delegated authority from HM Treasury and
as detailed in the [Company's Framework Document]
(“Framework Document”).
The Board is accountable to the Chancellor of the Exchequer
and through the Chancellor of the Exchequer to Parliament.
Specifically the Board is required to:
- adhere to the budget delegated by HM Treasury to the
Company's Accounting Officer with the accompanying terms
and conditions.
- ensure that the Company monitors its progress and delivers
against its objectives, as defined in the Framework
Document (“Objectives”);
- ensure the Company is adhering to its customer
responsibilities, by providing high quality independent
professional advice; and
- to monitor the Company's resources, its management and
risks.
To lead the Board and to chair its meetings, having agreed a
balanced agenda with the Chief Executive covering business
performance, strategy, risk and people. To ensure directors
receive accurate, timely and clear information for robust debate
and high-quality decision-making and that their time is allocated
to the right things.
To create the conditions for overall Board and individual director
effectiveness so that the Board achieves its full potential. To
facilitate and encourage active engagement of and appropriate
challenge by the Board, particularly on business strategy, project
and governance oversight and risk.
To ensure that once a Board decision is reached, there is
appropriate delegation of authority to the executive.
To review the annual performance of the Chief Executive, Senior
Independent Director, non-executive directors and Company
Secretary.
The Chairman alongside the Chief Executive will review the non-
executive director's fees at least every 3 years.
To chair the Nomination Committee which ensures there are
succession plans in place for the Board and the business, that
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BP-41a
Business
responsibility
Governance
Delegation of
Authority
Support
TOR last
approved on
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DRAFT
the Board has a balance of skills, experience, independence and
knowledge appropriate for the needs of the business; and that
committee membership is refreshed.
To pay due regard to the benefits of diversity, including gender.
To be a sounding board for the Chief Executive and in particular
in the formulation of strategy and in succession planning for key
roles within the business.
Together with the Chief Executive to provide coherent leadership
of the board to0 employees, external stakeholders, Government
departments, Entities for which UKGI has a governance role, the
media, the community and the public.
To promote constructive relations and open communication
between the directors, executive team, management and
employees, both inside and outside the boardroom.
To lead all governance matters to ensure they are conducted in
accordance with best practice and that there is a clear structure
for, and effective running of, the Board and its committees.
To lead the annual review of Board effectiveness and ensure that
committee chairman follow the same process. To determine, in
consultation with the Board, whether the evaluation should be
externally facilitated.
To put in place tailored induction for new directors and regularly
review and agree with each director their training and
development needs.
HM Treasury, Senior Independent Director
Chief Executive and Company Secretary
To be approved.
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UKGI00045860
UKGI00045860
UKGI
DRAFT
UK Government Investments Limited (the “Company”)
Terms of reference for the Company’s Chief Executive (the “Chief Executive”)
Role
This Board
receives its
authority from
Main
responsibilities
Objectives for
2016/17
To keep the Chairman regularly informed on all matters that may
be of importance to the Board, including progress against
strategic initiatives, emerging risks, the performance of the
executive team and succession planning for key roles within
UKGI.
To be accountable to the Board for all aspects of the performance
and management of UKGI. This includes developing business
strategies for Board approval and achieving timely and effective
implementation whilst managing the risks.
The Board receives delegated authority from HM Treasury and as
detailed in the Company’s Framework Document (“Framework
Document”).
The Board is accountable to the Chancellor of the Exchequer and
through the Chancellor of the Exchequer to Parliament.
Specifically the Board is required to:
- adhere to the budget delegated by HM Treasury to the
Company's Accounting Officer with the accompanying terms
and conditions.
- ensure that the Company monitors its progress and delivers
against its objectives, as defined in the Framework Document
(“Objectives”);
- ensure the Company is adhering to its customer
responsibilities, by providing high quality independent
professional advice; and
- to monitor the Company's resources, its management and
risks.
To lead the corporate strategic direction to develop appropriate
business strategies for Board consideration and approval.
To regularly update the Board on progress and KPIs.
To maintain an effective framework for internal controls and risk
management, ensuring that the risk register is reviewed quarterly
by the Executive Committee, prior to being submitted to the
Board.
To ensure the Board has adequate access to accurate, timely and
clear information for decision-making.
Ensure UKGI delivers its objectives to:
prepare and execute all significant corporate asset sales by the
UK Government;
advise on all major UK Government financial interventions into
corporate structures;
act as shareholder for those arm’s length bodies of the UK
Government that are structured to allow a meaningful
shareholder function and for other UK Government assets facing
complex transformations (especially if governance is at the heart
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of a model change); and
¢ advise on major UK Government negotiations with corporates
(Measurement — UKGI Board Secretariat to produce a report for
the Chair at year end)
2. Ensure that UKGI, and the CEO as leader, is embedded in its/his
relationship with its/his shareholder, HMT, through relationships
at all relevant levels of officials and ministers in HMT and that the
leadership, management and administration of UKGI’s business
is regarded by HMT as strong and that it is regarded highly for the
execution of its objectives.
3. Ensure that Ministers, permanent secretaries and senior officials
of key departments with whom existing projects/governance are
done regard performance of UKGI, and the CEO’s leadership,
during the year to have been strong — these departments would
include BIS, DECC, DfT, DCMS and Cabinet Office.
4. Ensure that UKGI develops stronger and deeper relations with
key departments identified for future work, notably MOD, DH.
5. Create an effective ethos and culture across UKGI resulting in
strong engagement at all levels and other positive metrics in
respect of working environment — identify/propagate/monitor
appropriate behaviours and have a developed people plan in
place by end September. This should include plans and action to
highlight attractions of UKGI for key targets in public and private
sector.
6. Continue to strengthen senior management team (directors,
COO, CFO) identify gaps and develop capabilities and develop a
CEO succession plan — near term emergency and longer term.
7. Plan, with the CEO and Chair of UKFI, for full UKGI/UKFI merger
to ensure there is a clear vision for the future shape and design
of UKGI to allow effective governance of a merged UKGI and for
UKGI/UKFI to continue to attract and retain talent effectively to
deliver that model over the next 12 to 24 months.
Business e To lead UKGI, promoting the values and ensuring company
values policies and procedures are adhered to.
¢ To ensure UKGI complies with all relevant legislation and
regulation.
e To ensure risks are effectively assessed and managed, and that
the necessary financial and human resources are in place.
¢ To ensure performance is effectively monitored.
People e To pay due regards to the benefits of diversity.
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DRAFT
¢ To review the performance of the Executive Committee,
allocating responsibilities to individuals.
*« To make recommendations to the Remuneration Committee
regarding individual pay and long-term performance incentives.
e Together with the Chairman review non-executive director fees at
least every 3 years.
Delegation of Given from the Board.
Authority
Support e Deputy Chief Executive, Directors, Chief Operating Officer, Chief
Financial Officer & Company Secretary
ToR last [ ] Date
approved on
ToR to be approved annually in line with the setting of the CEO’s
objectives.
Annex A: Extract from UKGI Framework document - Accounting Officer responsibilities in
the UKGI Group
Responsibilities of UKGI’s chief executive as Accounting Officer
4.1 The chief executive as Accounting Officer for the UKGI Group is personally responsible
for safeguarding the public funds for which he or she has charge; for ensuring propriety,
regularity, value for money and feasibility in the handling of those public funds; and for the
day-to-day operations and management of UKGI. In addition, he or she should ensure that
UKGI as a whole is run on the basis of the standards, in terms of governance, decision-making
and financial management that are set out in Box 3.1 of Managing Public Money.
4.2 As Accounting Officer, the chief executive has specific responsibilities to account to
Parliament as covered by the Accounting Officer’s letter of appointment and as described in
Managing Public Money. The accountabilities include:
« signing the accounts and ensuring that proper records are kept relating to the
accounts and that the accounts are properly prepared and presented in
accordance with any directions issued by the Treasury;
* preparing and signing a Governance Statement covering corporate governance,
risk management and oversight of any local responsibilities, for inclusion in the
annual report and accounts;
* ensuring that effective procedures for handling complaints about UKGI are
established and made widely known within UKGI;
e acting in accordance with the terms of this document, Managing Public Money and
other instructions and guidance issued from time to time by the Department, the
Treasury and the Cabinet Office;
« giving evidence, normally with the PAO, when summoned before the PAC on
UKGI’s stewardship of public funds.
4.3 Particular responsibilities to HM Treasury include:
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« establishing, in agreement with the department, UKGI’s corporate and business
plans in the light of the department's wider strategic aims and agreed priorities;
« _ informing the department of progress in helping to achieve the department's policy
objectives and in demonstrating how resources are being used to achieve those
objectives; and
* ensuring that timely forecasts and monitoring information on performance and
finance are provided to the department; that the department is notified promptly if
over or under spends 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 notified to the department in a timely fashion.
4.4 Unless agreed by HM Treasury, UKGI will follow the principles, rules, guidance and
advice in Managing Public Money to the extent applicable, referring any difficulties or potential
bids for exceptions to the sponsor team in HM Treasury in the first instance.
4.5 The chief executive is responsible for:
« advising the board on the discharge of UKGI’s responsibilities as set out in this
document and in any other relevant instructions and guidance that may be issued
from time to time;
e advising the board on UKGI’s performance compared with its objectives;
« — ensuring that financial considerations are taken fully into account by the Board at
all stages in reaching and executing its decisions, and that financial appraisal
techniques are followed;
* — taking action as set out in paragraph 3.8.6 of Managing Public Money if the board,
or its chairman, is contemplating a course of action involving a transaction which
the chief executive considers would infringe the requirements of propriety or
regularity or does not represent prudent or economical administration, efficiency
or effectiveness, is of questionable feasibility, or is unethical.
4.6 The Company chief executive will be authorised to act as the "qualified person" under
section 36(5)(0) (iii) of the Freedom of Information Act 2000.
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