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UKGI BOARD MANDATE
UK Government Investments Limited (“the Company” or “UKGI”) was formed on 1* April, 2016 to
undertake the activities previously undertaken by The Shareholder Executive and to be the parent
of UK Financial Investments (“UKFI”). UKGI is wholly owned by HM Treasury (“HMT”) and
governed by a Framework Agreement with HMT dated April 2016. UKFI is governed by its own
Board and by a separate Framework Agreement with HMT agreed in June 2016 .
The purpose of this mandate (“Mandate”) of the Board of Directors (the “Board”) of UKGI is to
provide guidance to Board members, about our role and responsibilities and the culture and values
of the Board.
This Mandate will be reviewed annually in March of each year.
OUR PURPOSE AND ROLE
The Board is responsible for the stewardship of the Company. We oversee the conduct and affairs
of the Company to ensure that it achieves the objectives set out in its Framework Agreement (the
“Objectives”) with HM Treasury, as well as complying with applicable law and regulation.
The Board discharges some of its responsibilities directly and others through its Board
Committees and senior management.
The Board agrees, and has collective responsibility for, developing the strategy and high level
priorities of the Company. We track and measure the performance against the strategy and
Objectives. Our strategy consists of the development of specific actions aimed at achieving the
Objectives.
The key resource in implementing our strategy is our people. Accordingly, one of our important
roles is ensuring that senior management is effective in recruiting and developing our people, as
well as ensuring that they are appropriately allocated to deliver our Objectives.
The Board is responsible for ensuring that appropriate values, ethics and behaviours for the proper
conduct of the Company are agreed and that appropriate procedures and training are in place to
ensure that these are observed throughout UKGI and that reward and assessment includes
measurement against these values.
The Board has discussed and agreed the key values of the Company. We expect the Board and
employees to be Professional, Collegiate, Open and Honest and Outcomes Focused.
The Board is responsible for ensuring that the senior management ensures respect for diversity
across, inter alia, gender, ethnicity, age, nationality and religion by attention to recruiting,
evaluation, promotion and compensation. The senior management will present an annual review
of its diversity plan.
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Our responsibilities
The Board recognises that it cannot, and should not, be involved in the day-to-day exercise of the
various activities of the Company and nor to take operational decisions. The CEO, as Accounting
Officer, is responsible for the key operational decisions. The CEO’s duties, priorities and objectives
will normally align with the Board’s. When they do not, it is up to the Accounting Officer to act
according to Accounting Officer standards of regularity, propriety, value-for-money and feasibility.
However, as the prudent fiduciary providing oversight of the management of the business, the
Board does have responsibility for:
(i) Ensuring that adequate controls and processes are in place for the proper exercise
of the senior management's day-to-day responsibilities, including controls and
processes to manage audit, compliance and legal risks as well as to manage public
money and the Company’s budget;
(ii) Ensuring that people with the appropriate mix of skills and experience are in place
to lead UKGI and meet our Objectives through recruiting, developing, remunerating
and motivating our people;
(iii) Ensuring that the management team of UKGI achieves our Objectives, including
delivering corporate finance and corporate governance advice to Ministers and
Departments across Whitehall. Each year the Board will agree the KPls against
which performance in delivering the Objectives will be measured. The Board will
review and assess the KPls quarterly and agree with the CEO on the form in which
the CEO reports the KPIs to HMT at the Quarterly Shareholder Meeting;
(iv) Giving its endorsement, when requested to do so by the Chair, CEO or Ministers, of
advice to be given to Ministers. Requests to the Board for endorsement of advice will
be typically about major decisions to be taken by Ministers at key milestones. Such
milestones might include, but are not limited to, the pricing of an initial public offering
or agreement to sale in a private market transaction.
The CEO and other senior UKGI officials may be held to account for advice given to Ministers
when they are called as witnesses to give evidence at Parliamentary Select Committee hearings,
in particular hearings of the Public Accounts Committee (“PAC”). PAC hearings will typically follow
National Audit Office value-for-money reports. In these cases, the UKGI executives will typically
appear in support of the Accounting Officer responsible for the asset, investment or divestment
on which we have provided advice.
Discharging our responsibilities
In order to effectively discharge its responsibilities, the Board should be informed about the
business of UKGI, including transactions and governance projects as well as other corporate
finance and corporate governance advice. Accordingly:
(i) Independent Directors are encouraged to meet with senior management and
members of the project teams outside Board meetings;
(ii) Independent Directors may be assigned to specific project teams. Assignments to
project teams will facilitate the Board’s role in ensuring appropriate risk assessment
and internal control is in place and that advice is well-considered. The Independent
Directors assigned to a project are expected to challenge, advise and support teams
but do not have responsibility for leading the team or making decisions but, given
their expertise and experience, may exercise influence;
(iii) Independent Directors are encourage to attend management-led, Risk and
Assurance Reviews and to challenge, advise and support the teams in those
reviews;
(iv) The Board will discuss which transactions, governance roles and other significant
areas of advice merit the Board’s focus and attention and, in some instances,
endorsements of advice. The CEO and senior management, in discussion with the
Chairman, will identify the most important issues as far in advance as is possible so
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that the Board can be appropriately informed about the issues;
(v) The Board will regularly review the main corporate finance and corporate governance
projects to allow challenge, discussion and advice to the teams about the key issues
and risks; and,
(vi) Non-Executive Directors will receive regular updates as well as deep dives, when
additional detail is required, at Board meetings.
Recently appointed Independent Directors will be offered an induction which may include
meetings with senior management as well as a review of the main corporate finance and
corporate governance projects and of the risk register.
Budget, Business Plan and Performance
The Board is responsible for ensuring that effective procedures and processes are in place so that
UKGI discharges its responsibilities to prepare a Budget and Business Plan each year for
agreement with HMT and report on an effective and timely basis to the Principal Accounting Officer
at HMT (or their nominee).
The Board is responsible for receiving updates of the performance of its subsidiary UKFI on a
quarterly basis. While UKFI remains a separate subsidiary with its own Board and framework
agreement UKGI will not be responsible for approval of advice given to HMT nor for day-to-day
operations of UKFI.
Committee responsi ies
The Board is responsible for ensuring that proper remuneration policies are in place for the
attraction, retention and motivation of employees and that these policies are consistent with the
framework agreed with HMT. Much of this work is delegated to the Remuneration Committee.
The Board is responsible for effective succession planning at Board level and for assessing the
processes in place to ensure that there is appropriate succession planning amongst the senior
management. Much of this work is delegated to the Nominations Committee.
The Board is responsible for overseeing the implementation of appropriate risk assessment
systems, internal controls and processes to identify, manage and mitigate the principal risks of the
Company's business both as they relate to transactions and Governance roles. Much of this work
is delegated to the Audit and Risk Committee.
APPOINTMENTS, VALUES AND CULTURE
Appointments
The UKGI Board consists of (i) Independent Directors nominated by the Nominations Committee
and approved by the Board and by HM Treasury, (ii) the Shareholder Representative Director and
the Director appointed by a government department, currently BEIS, and (iii) the Chair, Deputy
Chair and Chief Executive who are appointed by HM Treasury. (The Chief Executive is appointed
by Treasury Ministers in consultation with the Chair).
UKGI aspires to be a high performing Board; this means we must appoint Independent Directors
with the skills and experience necessary to achieve the Board’s purpose and with the attributes
and values required to help the effective functioning of the whole Board. The Board explicitly
acknowledges the need for diversity in the composition of our Board. The Board will ensure that
rigourous appraisals of the Board, its Committees and the individual Board members are
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conducted. (HM Treasury is responsible for external review of the Chair.)
Values
Each member of the Board must exercise due care and diligence, using the skills and experience
that they have and for which they were appointed to the Board. It is the responsibility of each
Board member to always act in the interests of the Company and play their part in creating the
required open Board culture.
In fulfilling their duties, UKGI Directors are expected to uphold and embody the Company's values
of being Professional, Collegiate, Open and Honest and Outcomes Focused; these values
are the lens through which our decisions and actions should be viewed. The values will be used
in evaluating the effectiveness of the Board and the contribution of all Board members.
These values should be at the heart of every action of the UKGI Board and its Members and of
every decision taken by the Board. UKGI’s reputation and its ethos has been hard earned through
the work over many years of The Shareholder Executive and UKFI, is a key element of the brand
and must be preserved and enhanced. If any material aspect of the Company's business or of any
proposed action does not feel right judged against these values, the view should be expressed at
the Board or, where necessary, privately to the Chairman, Senior Independent Director or CEO
for discussion and resolution.
Board Members are expected to comply at all times with “Code of Conduct for Board Members of
Public Bodies” and otherwise observe the points set out in paragraph 6.12 of the Framework
Agreement relating to use of public funds, conflicts of interest, use of information, acceptance of
gifts and hospitality, etc.
Culture
Board members have a duty to make their considered views known, even if they are critical or are
expressing an opposing view. They should do this in a way that represents the values and
encourages constructive discussion and solutions rather than conflict, and in a way that respects
the views of other Board members.
As a Board we accept that things do not always go according to plan in business and we must be
able to discuss openly difficult issues and plans that have failed in a way that is designed to
improve outcomes. So, whilst accountability must be clear, to encourage this open discussion we
expect that challenge should be tempered and balanced by support and encouragement.
Directors are expected to take an active role in discussion and decision-making at each Board
meeting. To facilitate this, the Chair is primarily responsible for ensuring that the Board has a
culture where openness is encouraged, where disagreement is tolerated and valued, and where
all Board members feel able to raise issues about any relevant aspect of the performance of the
Company without constraint. As a Board, we respect the different skills and experience we each
have and for which we were appointed and try to ensure that collectively we make the most of
these talents by listening as well as speaking.
In support of the required openness at the Board, where it is expected that there will be differences
of opinion, it is the responsibility of the Chair to bring discussion to a conclusion, decision and
agreed action that reflects the views of the Board, cutting through disagreement where required.