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Annual review of official documents and procedures approved by the Board

Summary

Board Report Number: SEPA 03/23 - January 2023

In 2010, the Agency Board established an annual review of all official documents and procedures that come to the Board for review/or approval on a regular basis.

The purpose of the annual review is to ease the process of governance through the Board seeing all documents at one meeting, rather than at individual meetings.

This report provides the Board with an update on official documents and procedures and seeks approval where necessary.

Introduction

To ease the process of governance, the Agency Board established an annual review of all official documents and procedures formerly approved by the Board on an irregular basis. This report provides the review for 2023. An indication of the status of each document is given, together with the details of any review, if necessary.

The report presents a list of all pertinent official documents and procedures together with an explanation of the purpose and status of each document. Some of the documents are formal and, indeed, statutory in nature and others have been developed following a request from the Board or Chair.

Official documents and procedures

Framework Document

This document sets out the broad framework within which SEPA will operate and defines key roles and responsibilities which underpin the relationship between SEPA and the Scottish Government (SG). The document will be reviewed and updated, as necessary, and at least every 2-3 years. The current Framework Document was approved in 2021. As part of the Public Bodies Units’ ongoing Strategic Sponsorship implementation, following the publication of the Review into SG Relationships with Public Bodies, Scottish Government has been working to reshape and restructure the model Framework Document currently on offer to Public Bodies. SEPA is working with SG Sponsor on the transposition to the new format and will come back to the Board at the appropriate time.

Standing Orders

The purpose of the Standing Orders is to provide rules for the way in which the Board should operate. Following the review in 2016 the Standing Orders were revised and approved by the Agency Board on 22 February 2022.

Code of Conduct

The Code is a requirement of the Standards Commission for Scotland (“Standards Commission”) and sets out rules of conduct for members of the Board. The Code was first introduced in 2002 and was most recently revised in 2021 following consultation. SEPA’s current Code of Conduct was produced following a request from SG to review and update our Code to bring it in line with the newly revised Model Code for Members of Devolved Public Bodies provided by the Standards Commission. This was submitted to the Board for the 26 April 2022 Agency Board meeting and approved for publication on our website by SG prior to the 10 June 2022 deadline date. SG has also passed a copy of the approved Code to the Standards Commission and the Ethical Standards Commission for their records.

Terms of Reference of the Audit and Risk Committee

The terms of reference and remit of the Audit and Risk Committee were last revised and approved on 22 February 2022 and are available on the SEPA website. Meeting dates are published on the Board calendar on the website and updates to the Agency Board are reflected in the minutes of Board meetings.

Terms of Reference of the People Committee

The terms of reference of the People Committee were approved by the Board on 26 January 2022 and are available on the SEPA website. Meeting dates are published on the Board calendar on the website and updates to the Agency Board are reflected in the minutes of Board meetings. A review of the terms of reference will be undertaken in 2023 and will be returned to the Board at an appropriate time.

Board members’ representation of SEPA at meetings and events

This policy and procedure presents an opportunity for Board members to represent SEPA at external meetings and events, in the capacity as a speaker and/or a delegate, and was formally approved by the Board in November 2010. The policy is being reviewed in line with the revised Code of Conduct and Standards Commission of Scotland Advice Notes and will submitted to the Board for the 25 April 2023 meeting.

Policy and procedure for Board members claiming expenses

The procedure was last revised in January 2015 following a desk top exercise into SEPA’s application of its expenses policies and their interaction with PAYE. Board members were informed of amendments to the procedure, by email, and provided with a copy of the updated procedure dated 14 January 2015. The procedure remains unchanged since that date; a review is currently being undertaken and will come back to the Board later this year. Board members are also reminded that it is good practice to return expense claims in a timely manner.

Board members role and procedure in concerns raised by whistleblowing

This document outlines the role of the Board in dealing with concerns raised with the Board through the whistleblowing policy and the procedure the Board will follow where a member is designated as a “prescribed person”. It was updated and approved by the Board on 22 February 2022, in alignment with SEPA’s whistleblowing policy. The Board members ‘prescribed person’ are Fran van Dijk, Craig Hume and Harpreet Kohli. Training took place on 30 March 2022. The Audit and Risk Committee has responsibility for whistleblowing and receives an annual report of incidents. No further review is proposed at this time.

Procedure for dealing with allegations of failure by Board members to comply with the SEPA Code of Conduct

SEPA Board members are subject to the SEPA Code of Conduct and SEPA Standing Orders in matters of conduct and discharge of their SEPA duties. This document presents the procedures for dealing with allegations of failure by Board members to comply with the SEPA Code of Conduct or failure to carry out their SEPA duties. The latest version of the procedure was submitted to the Agency Board 26 April 2022 for noting alongside the revised Code of Conduct and is included here in Appendix 1 to this paper for approval at the 21 February 2023 Board meeting. The Agency Board has delegated responsibility for overseeing matters of standards to the Audit and Risk Committee. Standards are a standing agenda item at every Audit and Risk Committee meeting.

General Scheme of Delegation

The Scheme of Delegation to the Chief Executive (incorporating matters reserved to the Board) was last revised in July 2011. SEPA’s Specific Scheme of Delegation was last reviewed in 2013. Both schemes are currently under review following agreement of the Board in 2016. A full review of both these documents is being undertaken as part of the Governance framework work in parallel with the work with SG Sponsor on the revised Framework Document. The Scheme of Delegation will come back to the Board with the new Framework Document later this year.

Recommendations

The Board is invited to note the report.

The Board is asked to approve the “Procedure for dealing with allegations of failure by Board members to comply with the SEPA Code of Conduct” (Appendix 1).

Appendix 1

Procedures for dealing with allegations of failure by Board Members to comply with the SEPA Code of Conduct or failure to carry out their SEPA duties

Preamble

SEPA Board members are subject to the SEPA Code of Conduct and SEPA Standing Orders in matters of conduct and discharge of their SEPA duties. These procedures outline how allegations of misconduct or failure to carry out duties will be investigated.

The status of Board Members

SEPA Board members are subject to the SEPA Code of Conduct and SEPA Standing Orders in matters of conduct and discharge of their SEPA duties. These procedures outline how allegations of misconduct or failure to carry out duties will be investigated.Board Members are appointed by and are accountable to Ministers. Concerns over their fitness to hold office or ability to undertake their responsibilities will be dealt with by the Standards Commission for Scotland (conduct) or Ministers (capability). Complaints of breaches of a public body’s Code of Conduct are investigated by the Commissioner for Ethical Standards in Public Life (ESC) and adjudicated upon by the Standards Commission.

Board Members, as appointees, do not enjoy employment rights. They have no redress for unfair termination of office or discrimination through an Employment Tribunal but could pursue actions through judicial review, human rights or equal opportunities legislation. This requires SEPA to make explicit its standards of conduct/performance and have in place a fair, reasonable procedure for investigating and dealing with alleged transgressions.

The SEPA Code of Conduct, Standing Orders, the Standards Commission for Scotland and the Standards Officer

Conduct and interests of Board members are dealt with in the SEPA Code of Conduct. The rules of good conduct must be observed in all situations where you act as a member of the SEPA Board. It is expected that you will lead by exemplar behaviour, and it is expected that fellow board members and employees will show you the same consideration in return. SEPA will promote a safe, healthy and fair working environment for all.

The SEPA Standing Orders regulate attendance, duties and responsibilities of Board members at meetings. The purpose of the Standing Orders is to provide clarity about the way in which the Board should operate. Effectively, it is a set of rules that aim to ensure effective governance of the Agency. The most recent Standing Orders were approved by the Agency Board in February 2022.

The role of the Standards Commission for Scotland is to encourage high ethical standards in public life; including the promotion and enforcement of the Codes of Conduct and to issue guidance to council and devolved bodies and to adjudicate on alleged breaches of the Codes of Conduct, and where a breach is found, to apply a sanction.

SEPA is required by the Standards Commission for Scotland to appoint a Standards Officer with responsibility for the Code of Conduct, maintaining the register of interests and providing advice, support, and appropriate training on matters of interests or conduct. This includes ensuring training is provided on induction and on a regular basis thereafter (on the ethical standards framework, the Code of Conduct, and the guidance issued by the Standards Commission).

The Standards Officer is an employee who is either solely, or jointly, responsible for undertaking various duties and responsibilities related to the ethical standards framework (regardless of whether they have the formal title of Standards Officer). SEPA’s Standards Officer is currently the Clerk to the Board and Corporate Solicitor (sole employee).

The role of the Audit and Risk Committee

The Audit and Risk Committee monitors and reviews risk, control, and corporate governance. It operates independently and reports to the Agency Board.

The SEPA Agency Board has delegated responsibility for overseeing matters of standards to the Audit and Risk Committee, reporting to the Agency Board with recommendations. The Audit and Risk Committee also acts on behalf of the Board in overseeing the work of the Standards Officer.

Standards are a standing agenda item.

Also refer to the Audit and Risk Committee Terms of Reference and Remit, which is reviewed every two years (last reviewed February 2022).

Procedures

Concerns over the conduct or ability of Board members (other than the Chief Executive¹, for whom normal SEPA employment procedures would apply) should be referred to or raised with the Standards Officer.

⁽¹ The revised Guidance on the Model Code explains how Members can raise any concerns they may have about the performance, conduct or capability of the Chief Executive: “If you have concerns about the performance, conduct or capability of the Chief Executive, you should raise them in private with the Chief Executive. You should discuss your concerns with the Chair before doing so, to see if they are shared by other members and/or are already being addressed.” )

The Standards Officer, in consultation with the Chair of the Audit and Risk Committee², will undertake an initial investigation to assist in ascertaining whether there might be a case to answer.

(² If the allegations relate to the Chair of the Audit and Risk Committee, the Chair of the Agency Board will act instead, presenting the conclusions of the initial investigation to the Audit and Risk Committee (the Chair of the Audit and Risk Committee withdrawing))

The Chair of the Audit and Risk Committee will consider the report of the initial investigation and any recommendation from the Standards Officer on further action.

If the Chair of the Audit and Risk Committee decides there may be a case to answer, the Chair of the Agency Board³ will be consulted to consider an appropriate and proportionate response.

(³ If the allegations relate to the Chair of the Agency Board, the Deputy Chair of the Agency Board will immediately consult with the Scottish Government and agree how matters should be progressed.)

If there is to be any further investigation, the Chair of the Audit and Risk Committee (assisted by the Standards Officer) will prepare terms of reference detailing the scope, nature and areas to be investigated. The terms of reference will also outline the process of investigation.

The Board member under investigation will be notified of the allegations in writing and will be given a copy of the terms of reference. An opportunity will be given to answer the allegations either in writing or face to face. If a formal meeting is held, the Board member will be entitled to representation.

The findings of the investigation will be reported to the Audit and Risk Committee sitting in private session without SEPA Officers (other than the Chief Executive and Standards Officer), the Internal or External Auditors, or the member under investigation present. If the Committee decides there should be further action, it will make a report and recommendation to the Agency Board.

The Agency Board will consider the recommendation from the Audit and Risk Committee. It may take any further action it deems appropriate and fair to resolve the matter and may apply any of the sanctions detailed below.

In the case of Agency Board members:

• Referral of the matter to the ESC and Standards Commission for Scotland (misconduct) or Scottish Government Ministers (attendance or failure to perform competently), requesting suspension (full or partial for up to one year) or disqualification (removal) from the Agency Board.

  Note that, as stated in the Code, the ESC is responsible for investigating complaints about members of devolved public bodies. It is not, however, mandatory to report a complaint about a potential breach of the Code to the ESC. It may be more appropriate in some circumstances for attempts to be made to resolve the matter informally at a local level.

  A full suspension means that the member is suspended from attending all meetings of the public body. Partial suspension means that the member is suspended from attending some of the meetings of the public body (one or more, but not all, of the following: i) all meetings of the public body; ii) all meetings of one or more committees or sub-committees of the public body (including Board Buddy project groups); (iii) all meetings of any other public body on which that member is a representative or nominee of the public body of which they are a member).

  The Standards Commission also has the power to impose an interim suspension on a member on receipt of an interim report from the ESC about an ongoing investigation.

• Removal from Committees or offices of the Board other than the positions of Chair and Deputy Chair of the Agency Board (where referral to the Scottish Government would be required).
• A formal meeting with the Chair of the Agency Board and the Standards Officer to review the concerns, detail future expectations and offer appropriate assistance.

The Board member will have a right of appeal on the following grounds:

• The fairness and reasonableness of the process followed.
• Any further information coming to light which could not have been known at the time.
• The severity of the penalty.

SEPA will appoint an independent outside person with the necessary knowledge and understanding of the requirements of conduct in public life to undertake a review of the decision.

If the independent review finds in favour of the Board member, the matter will be referred back to the Agency Board to reconsider its decision. In this instance the decision of the Agency Board will be final without any further right of appeal.

Guidance on fitness or ability to hold office

A condition of any public appointment is to maintain exacting standards of personal and professional conduct. These are contained in the SEPA Code of Conduct and Standing Orders for the Board.

The following points offer guidance on the aspects of conduct or performance that would merit investigation and action. Reference should also be made to the Standards Commission’s Guidance on the Code. The Guidance includes numerous illustrations and case examples. It has also produced Advice Notes for members to help interpret the Code’s provisions. You may also choose to seek external legal advice on how to interpret the provisions of the Code and, on detailed financial and commercial matters, seek advice from other relevant professionals.

Fitness to hold office may be called into question where there has been a serious or deliberate breach of the Code of Conduct. For a breach of the Code to be found, there must be a contravention of one or more of the provisions in sections 3 to 6 inclusive of the Code (General Conduct, Registration of Interests, Declaration of Interests, Lobbying and Access). Examples are:

• Systematic failure to provide or update entries within the appropriate timescale in the Register of Interests. This includes registering paid work undertaken; for example, if you write for a newspaper, you must give the name of the publication, and the frequency of articles for which you are paid.
• Using membership of the Board for personal, political or financial gain or to further the interests of a third party, improperly seeking preferential treatment.
• Accepting any paid work in which you give advice on how to influence your public body.
• Fraudulently claiming expenses or allowances (including travel expenses).
• Breach of confidentiality.
• Any conduct (physical, verbal or non-verbal) that could bring the good name of SEPA into disrepute.
• Inappropriate behaviour towards SEPA staff, other Board members or whilst representing SEPA (such as disrespect, bullying, or harassment (including sexual harassment)) or discriminating unlawfully on the basis of race, age, sex, sexual orientation, gender reassignment, disability, religion or belief, marital status or pregnancy/maternity.
• Undermining an individual employee or group of employees or raising concerns about their performance, conduct or capability in public.
• Not disclosing/declaring personal interests in dealings (formal and informal) with employees and other members, not just in board or committee meetings.
• Serious failure to follow procedures and potentially compromising SEPA.
• Becoming inappropriately involved in operational matters⁴.
• Misuse of SEPA’s resources.
• Inappropriate comments or postings on social media⁵.

(⁴ An Advice Note for Members on Distinguishing between Strategic and Operational Matters can be found on the Standards Commission’s website.)

(⁵ Social media is a term used to describe online technologies, platforms, applications and practices that are used to share information, knowledge or opinions. These can include, but are not limited to, social networking sites, blogs, wikis, content sharing sites, photo sharing sites, video sharing sites and customer feedback sites.)

Ability to hold office may be called into question where the Board member systematically fails to attend to SEPA duties as required in the Standing Orders or terms of appointment. Examples are:

• Failure to attend three consecutive meetings of the Agency Board or 50% of the scheduled ordinary meetings in a calendar year (and has not been given leave by the Chair). Meetings can include virtual meetings or other forms of remote working via platforms such as MS Teams, Skype and Zoom.
• Failure to respond to correspondence or reasonable requests for information.

In addition, if members are frequently declaring interests at meetings, then they should consider whether they can carry out their role effectively and discuss with the Chair.