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Board meeting - 25 April 2023

The one hundred and eighty-fifth meeting of the Agency Board took take place at 1.00 pm on Tuesday 25 April 2023 via Microsoft Teams.

Safe SEPA @ Board:

The Clerk to the Board advised the Board of learning modules for Board members available on a Scottish Government hub. Board members would have been notified of this directly by Scottish Government some time ago in a public bodies update. The Clerk to the Board asked that Board members provide feedback to her on these modules and confirm if the modules have been completed.

Chair's opening remarks

The Chair welcomed everyone to the meeting.

The Board noted that there were no members of the public in attendance and SEPA had received no approaches from the public in advance of the meeting.

Matters arising

The Clerk to the Board provided an update. The following updates to the actions were noted:

• Action 729 - Added to Register of interests on 6 March 2023. Proposed closed.
• Action 730 - Briefing uploaded to Diligent Boards on 28 March 2023. Proposed closed.
• Action 731 - Briefing uploaded to Diligent Boards on 18 April 2023. Proposed closed.
• Action 732 - This has been considered and it is proposed that the day remains virtual to make the best use of Board and others time and avoid travel. Proposed closed.
• Action 733 - Presentations uploaded to Diligent Boards. Proposed closed.
• Action 734 - These amendments were made to the Board Buddy Register for presentation at the Strategy Board meeting on 21 March 2023. Proposed closed.
• Action 735 - This has been added to the planner for the Audit & Risk Committee on 27 June 2023. Proposed closed.

Chair's report - verbal

The Chair provided a verbal update on his activities since the last Agency Board meeting in February 2023. The focus of the Chair’s activities has been on preparation for appraisals for Board members and recruitment this year for new Board members.

The Chair advised that recruitment for new Board members had made very slow progress, but that SEPA had fulfilled its obligations with Scottish Government in respect of the assistance it can provide to the process, including advice on the job description and around potential independent panel members. He confirmed that it is for Scottish Government to lead the recruitment process and that he will raise again the issue of timing for the recruitment at his next meeting with the Director of Environment and Forestry. He confirmed that there is expected to be a separate process for the recruitment of a new Agency Board Chair, but the timing may mean that it is combined with the recruitment for Board members. The Chair also advised that he was aware of recruitment underway for Board members at Nature.Scot but had not yet seen an announcement from Scottish Government on this. The Clerk to the Board confirmed that she is also in regular dialogue with the Scottish Government Sponsor team on this issue.

Concern was raised by the Board members on the delay to the Board recruitment and a request made for contingency planning and transition arrangements to be considered to help the Executive team should a new Chair not be recruited in time. The Chair confirmed that he would be departing SEPA at the end of this calendar year.

The Chair advised that he will be having his annual appraisal with the Director of Environment and Forestry in a few weeks and will again raise the issue of recruitment then, as well as other points of concern to SEPA including resourcing for the Deposit Return Scheme (DRS). The Chair asked that Board members contact him if there are other issues that should be raised at his meeting with the Director.

Other activities undertaken by the Chair since the February Board meeting were noted as including internal and external discussions around DRS and preparation being underway for the Chair and CEO to meet with political parties during the summer recess period.

The Board noted the update.

Management reports

Chief Executive’s Report (SEPA 16/23)

Report: Chief Executive’s Report

The CEO introduced the report and highlighted the following key areas of work:

• The reset of SEPA and new SEPA branding.
• The ongoing review of governance.
• External meetings with partners, stakeholders, and MSPs.
• Internal staff meetings at various SEPA office locations, which were well received with great feedback from staff who were open and honest on the challenges the organisation is facing.

The CEO also drew attention to a number of sections in her report: 3.1.1 30-day Scottish flood forecast launch; 3.3 River Carron (Falkirk) Flood Warning Scheme (a 2022-23 AOP target); 4.4 recognition given to International Women's Day 2023 and Neurodiversity Celebration week; 3.5 and 3.6 highlighting areas of innovation; and 2.4 Deposit Return Scheme, confirming that this was the focus on a separate agenda item in the private session of the Board meeting today (item 23). She also highlighted items in the report where SEPA has been working with different universities.

The Board congratulated the innovative work around reedbeds (section 2.6) and recognised the interest from Norway in SEPA’s flood warning system (section 3.4). In response to a question about the illegal activity intervention (section 2.2) and whether there is an outcome yet, Lin Bunten advised that it is a good, long running piece of work and that its conclusion will be reported back to the Board.

In response to a question about where the nitrogen comes from, is it agriculture, emissions from farming (section 3.6), David Pirie advised that it varies by site, but that agriculture is a key source. In response to a question about the progress made in respect of Dalgety Bay (section 2.1) and when it will draw to a conclusion Martin Grey advised that the expected completion is mid-June 2023 with interest from BBC and STV and discussions around a potential community event. In response to a follow up question about the publication of the report, David Harley highlighted the public interest and profile around it. The Board asked that the matter be kept on the agenda with updates provided between now and June 2023.

Action: David Harley/Martin Grey

In response to a question about why the Stirling and Fraserburgh offices are still closed, Jennifer Russell advised that significant work is still required at Stirling and is currently at the procurement stage and advised that CLT (then AMT) had made a decision last year to consider closing Fraserburgh but that the position is under review as part of our strategic approach to workspaces.

In response to a Board comment that it would be good to see learnings and the dynamics to approaches in future reports (section 4.1), Kieron Gallagher advised that Robbie MacDonald, Resilience Manager sits on the Risk Management Group to help close the gap and ensure that learnings and actions from events are implemented.

In response to questions around whether there had been any discussion at the flooding conference on water scarcity (section 3.1) and what may fall to SEPA in terms of the costs and problems in respect of the coastal change adaptation plan (section 3.1.2), David Pirie advised that he was not at the conference but would check and advised that coastal change is a significant issue for Scotland and that he will provide a briefing to be added to the resource centre in Diligent Board in advance of the water management item coming to the Board shortly.

Action: David Pirie

The Board noted the report.

Equality Mainstreaming Report (SEPA 17/23)

Report: Equality Mainstreaming Report

Bridget Marshall introduced the report with Anne Turner in attendance. The Board noted that this is a statutory report which is to be published on SEPA’s website by 30 April 2023. It was confirmed that Board members had an opportunity to comment on the draft report in advance of the meeting and that two set of comments had been received which have been incorporated into the final report.

She highlighted that the potential for a Board Buddy Group had been highlighted in the comments received from Board members. Julie Hutchison expressed an interest confirming that she thought there was an opportunity to use Board Buddies as a sounding board to go beyond compliance in terms of inclusion.

The Board commented on the relatively positive nature of the report and noted congratulations. In response to a question about whether the Scottish Government do a review of the effectiveness of reports and also how they shape the evolution of reports, Anne Turner advised that yes work was done a few years ago highlighting that a lot of organisations do not have equality resource and there is a concern that focus is therefore on the writing of the report rather than on the delivery itself.

In response to a question about consideration of options beyond male and female for gender identities Jennifer Russell advised that work is in train as we build back Agresso we are reviewing equality fields.

In response to a question about anonymisation and the fact that it does not help with understanding the data at the higher levels in the organisation, Jennifer Russell advised that this is standard practice for reports, but that consideration will be given as to how it could potentially be broken down for the People Committee to discuss. Kieron Gallagher confirmed that the report needs to be compliant with data protection principles highlighting that it includes protected characteristic data and the risks of identifying individuals but that this could be explored further.

In response to a question about the four new outcomes and what thinking has been done on measures and reporting as some are challenging and also whether the report could be widened out to look at socio economic impacts including the Fairer Scotland duty or if is this prevented by guidance, Anne Turner confirmed that we can look at anything we want in future reports but that we need to focus on what we have to do first to build confidence before we widen out.

The Chair concluded the item by acknowledging that the Board cannot keep asking for things when there are resource pressures but requested that this be considered in the mix.

The Board noted the report.

Annual Operating Plan (SEPA 14/23)

Report: Annual Operating Plan

Bridget Marshall introduced the report with Anne Turner, Lauren Davidson and Donna Brodie in attendance.

The Chair thanked Donna Brodie and Lauren Davidson for getting to this stage in difficult circumstances recognising the hard work and the incorporation of Board responses.

Bridget Marshall advised that there are three minor errors that will be rectified before the final AOP document is launched and asked the Board to approve this version with the caveat of the three changes. She also highlighted the amazing job done by Donna Brodie and the team, with clear leadership being shown. Donna Brodie thanked the Board and advised that it had been an enjoyable experience.

The Board commented on minor typos and suggested some language and design options for consideration.

The CEO concluded the item by thanking he Board for their comments and for going through the process with CLT, it is time consuming but hugely important and valuable to get to this milestone today.

The Board approved the report subject to the three amendments highlighted.

Bathing Waters (SEPA 23/23)

Report: Bathing Waters

David Pirie introduced the report highlighting that it sets out the background to SEPA’s role, the history of SEPA’s achievements, the preparation in place for this year and the background context for strategic discussion in private session.

The Board commented that the reputational risk may be higher than medium given the issues the Environment Agency face and asked whether it was a coincidence that both the beaches that failed were in Fife. David Pirie confirmed that it was a coincidence.

The Board drew attention to the meaningful analysis and commentary on equality provided in the report commented that it was exemplary.

In response to a question about whether Scottish Water are properly appraised of our priorities at a strategic level from a Board perspective commenting that it looks a bit piecemeal and case by case with no strategic plan in place, David Pirie advised that SEPA has the most joined up and evolved touch points with Scottish Water from CLT level down covering strategic, operational and tactical but not at Board level.

The Board asked for a paper to give assurance that our strategy is aligned, suggesting it be included as part of the water management work.

Action: David Pirie/David Harley

The Board discussed the potential to have a joint seminar session style Board meeting with Scottish Water to develop relationships and understanding. David Pirie advised that there had been a joint meeting previously and confirmed that there are regular meetings at CLT and CEO level with for example prioritised work then being built, into the River Basin Management Plan (RBMP).

The CEO advised that there will be opportunities once the new Scottish Water CEO has settled in. The Chair concluded by acknowledging that this would be the right time for the reset of board relationships with a meeting between the Chairs and CEOs and potentially the water commission as well as the potential for a wider Board site visit.

The Board noted the report.

Workforce Strategy (SEPA 20/23)

Report: Workforce Strategy

Jennifer Russell introduced the report with Cat Cunningham in attendance advising that it had been to the People Committee on 11 April 2023 where the inclusion of a mission statement had been recommended around moving forward in respect of values and behaviours.

Martin Hill, as Chair of the People Committee, advised that the Committee had been glad to see the strategy, and that it has been well received as sets out the framework of what is required. Numbers will be determined by the operating model so there is still a lot of work to do but the Committee is supportive.

The Board commented that it is a good framework for the action plan highlighting the need for visibility in advance of the staged milestones. Jennifer Russell advised that work on a timeline and action plan is underway.

The Board also discussed including Artificial Intelligence considerations and recent research about how people like to work with the impact being around design not location drawing attention to a Harvard study published this week.

The Board commented on the age profile of the organisation and potential issues, with Jennifer Russell highlighting the important examples of apprenticeships and the nervousness that the same support cannot be given via hybrid working but that career paths across the organisation are being looked at particularly in hard to fill roles.

In response to a comment about using SEPA’s strengths more by leveraging our reputation (page 5) and on suggested changes to the environmental box (page 6), Jennifer Russell advised that the wording is meant to reflect how businesses have changed in terms of service delivery with Cat Cunningham confirming that different businesses have different processes and ways of tackling climate change that we may need to regulate but that the wording can be made clearer.

In respect to a question about future skills (page 10) and whether the five bullets were principles or examples of skills, Cat Cunningham advised that skills would change as circumstances change. The Board followed up with a comment that as currently worded it sets planning assumptions on which to set the operating model. The focus can then be on skills with more definition now being better than vagueness noting that this is an opportunity to be more courageous and transformative.

The Board approved the report subject to the points made.

Board Members’ Representation of SEPA at meetings and events (SEPA 15/23)

Report: Board Members Representation of SEPA at meetings and events

The Clerk to the Board spoke to the report and advised that the annual review of official documents and procedures paper that came to the Board on 21 February 2023 highlighted that the Guidance on Board members’ representation of SEPA at meetings and events was being reviewed in line with the revised Code of Conduct and Standards Commission of Scotland Advice Notes and would be submitted to the Board at this meeting.

The Chair expressed a view that as already having done so earlier in the year he would sign off events that met the exceptions within the Code.

In response to a question about why the document had not been reviewed for such a long period, the Clerk to the Board advised that there had been minor reviews but no substantial amendments but that this would not be the case going forward in line with the Governance Framework Update paper that had gone to the Audit and Risk Committee on 21 March 2023.

The Board approved the report.

Board Work Programme

Board Engagement Activity

Julie Hutchison provided an update on the Scottish Flood Risk Management Conference she had attended in Perth on 23 February 2023.

Fran van Dijk confirmed that she had been at a cyber security workshop with Scottish Government and got confidence that SEPA is doing a lot of the right things. She highlighted the threat of phishing particularly whale phishing targeted at senior managers and board members and conveyed that there had been a strong message about complex passwords not being the best option but instead using three memorable words together.

Fran van Dijk also drew attention to the Big One event she had attended in her personal capacity – a 70,000 people march to encourage the government to do more. She confirmed that she had followed the guidance on attending events.

Craig Hume advised that he had attended a Living Wage leadership group meeting and that a member of SSE chairing the group had spoken highly of SEPA and is looking for SEPA to get involved in the refurbishment of broken turbines which is a multibillion-pound industry.

Nicola Gordon advised that she had attended an Audit Committee Chair network event that morning and that ESG particularly the environmental aspects was part of the briefing by Azets. It was clear from the reaction of the fifty/sixty organisations in attendance that a lot are not clear about their obligations and have more to do.

The Board noted the update.

Board Buddy Register

The Clerk to the Board advised that the executive is looking for Board Buddies for:

• Environmental Performance Assessment (future compliance approach) following the email sent seeking interest on 12 April 2023; and
• Equality in respect of communications and measures going forward.

Harpreet Kohli agreed to be a Board Buddy for the Environmental Performance Assessment (future compliance approach) and as documented under item 9; Julie Hutchison will be a Board Buddy for Equality.

The Board agreed that as she is coming to the end of her tenure as a SEPA Board member Fran van Dijk should not continue to be the Board Buddy for the Board Succession planning group and agreed that the Clerk to the Board would look at the remit and Terms of Reference (ToR) for the group with expressions of interest to be submitted to her.

The Board noted the update.

Board Committee Reports

Audit and Risk Committee minute of meeting held on 21 March 2023

Nicola Gordon as Chair of the Audit and Risk Committee (ARC) advised that the minute of the meeting held on 21 March 2023 was available for all members to view on Diligent Boards. The Board noted the change to external auditors with SEPA now being audited by Audit Scotland. Reference was also made to the annual report on risk to be considered in the private session of this meeting (item 24).

The Board noted the update.

People Committee update

Martin Hill as Chair of the People Committee provided an update on the meeting on 11 April 2023. He highlighted that the meeting had been supported by very good papers, that there had been an update on pay, the future of work and estates including the Edinburgh and Glenrothes exits.

There had been a discussion around coaching being a mandatory element of the Management Development Programme and two case studies on recent grievances heard by Board members. Martin Hill gave assurance to the Board that considerable learnings had been gained from the process and that behaviours and impacts had been identified with plans to address them including through the positive work on culture. Learning is being taken forward and built into the roadmap. He highlighted that the previous external auditor, Grant Thornton, had recommended a Remuneration Committee and that the Committee had debated the pros and cons of having a separate Committee or revising the terms to extend the remit of the People Committee.

The conclusion reached was that the People Committee should become the People and Remuneration Committee and are today recommending this to the Board. The revised draft ToR will go to the People Committee on 20 June 2023 then to the Board in June or July 2023 for approval.

The Board noted the update and agreed with the recommendation.