A report was received setting out the recommendations of the Governance Sub Group regarding the appointment of additional director(s) to the BCPP Limited Board ("the Board") at the request of the Company.

Members were reminded that at the last meeting of the Joint Committee, the Governance Sub-Group was asked to meet and consider how the resolution of the Joint Committee could best be implemented.

Cllr Worth noted he had submitted comments prior to the meeting in case he was unable to attend in person due to concerns about the weather.  These comments had not been circulated as Cllr Worth had made the meeting.  He was concerned about proposals to create two Partner Fund directors.  He suggested the appointments could create conflicts of interest for the appointees and ,may disenfranchise the ten Pension Funds that would not be represented on the BCPP Ltd. Board.

Cllr Stevens did not feel that the proposal would disenfranchise the ten unrepresented Pension Funds and proposed the directors be appointed for fixed time periods. Cllr Stevens suggested there was no perfect system but agreed the funds should have representation on the BCPP Ltd. Board.

Members were advised that in keeping with this suggestion, the report (at paragraph 3.2.4) notes the Governance Sub Group’s opinion that the Joint Committee should recommend to the Company that each director should serve an initial two year term with extension subject to re-election and consideration could be given to one director having an initial one year term to avoid coincident retirements from the Board.

Cllr McMurdo also suggested the appointment of two directors to the BCPP Ltd. Board would present a conflict of interest and raised questions around independency and quoted guidance from the Association of British Insurers and Financial Reporting Council in support of this suggestion.  Mention was made regarding how others might view conflicts.

Cllr Leask noted support for the recommendations and suggested the need to have representatives on the BCPP Ltd. Board to represent the ethos of the public sector.

Cllr Ellis agreed the Board needs to hear the ethos and principles of the public sector and sought comments from Members regarding alternate means via which this could be best achieved. Cllr McMurdo suggested there may be a way of enabling all the Joint Committee collectively to achieve this objective.

G Fielding noted the S151 officers had raised similar concerns around the lack of local government understanding on the Board.  He further noted that the general feeling, although not unanimous, amongst the S151 Officers was that the proposal would be a useful addition to the governance arrangements.

Members gave further consideration to the proposal to appoint directors on a fixed term basis, debating what might be an appropriate length of term and how many consecutive terms might be served. General support was noted for the notion of having no more than two consecutive two year terms.

C Hitchen advised Members of the desire to have a fully-rounded Board capable of best serving its clients and shareholders and the benefits therefore of having additional representation with expertise and an understanding of the public sector.

Cllr Evans suggested that the nomination of representatives of two of the Partner Funds to the Board shouldn’t disenfranchise those who aren’t represented.  He suggested that the Joint Committee could review the effectiveness of the Partner Fund directors be reviewed after one year of operation.

Cllr Kennedy noted comfort with the recommendations contained in the report and suggested sufficient control measures be introduced to help avoid sentiments of disenfranchisement.

The Chair outlined to Members a possible alternate option that would effectively engage all Partner Funds, making the Joint Committee the ‘client’ and the Board the ‘investment manager’ and have no direct representation on the Board, but suggested this model of governance was probably not what the majority of Shareholders want.  It was noted that everyone needed to be clear about the different roles and responsibilities between the administering authorities acting in  the role of Shareholder as opposed to the funds as clients acting through the Joint Committee.  The proposal being out forward is for the Shareholders  to be directly represented on the Board.

Cllr Bloundele suggested there was no value in not having shareholder representation on the Board and noted support for the recommendation of director appointments be staggered and limited in terms of consecutive re-elections

Cllr Stevens and other members supported the request  for a review of the effectiveness of the appointments process after one year.

Cllr Davinson noted the requirement for a job description and person specification to help prospective candidates consider the likely commitments involved.

Members considered the likely timescales involved in ratifying the proposals each individual Authority level and the processes involved in electing and appointing directors to the Board (noting the added potential complexity of local government elections in May).

The Chair noted the directors once appointed would be protected by insurance, a privilege not currently afforded to the Joint Committee’s observers on the Board.

The Chair agreed to undertake a recorded vote on the recommendations, the outcome of which was as follows:

For – Cllrs Weighell, Ellis, Davinson, Meredith, Strengiel, Kennedy, Evans, Bloundele, Leask and Stevens.

Against – Cllrs Worth and McMurdo

The recommendations were therefore carried.

RESOLVED: that the Committee adopt the following recommendations:

a)  That two representatives of the Shareholders be nominated through the operation of the Joint Committee at the July meeting and that those nominations be adopted by the Board of BCCP Limited and appointed as directors subject to the approval of shareholders.      

b)  That the directors should be designated as non executive Directors and their nominations should be made by the Joint Committee who should adopt an exhaustive ballot procedure to select those nominees.

c)  That the ballot should take place as soon as practically possible and potentially at the July meeting of the Joint Committee, allowing potential candidates time to consider their position

d)  That any Member of the Joint Committee appointed to the BCPP board should stand down in favour of another representative of their fund such as a deputy or vice chair for the duration of their appointment.

e) That until the nominations are confirmed the Board be requested to invite the Chair and Vice Chair of the Joint Committee to attend Board meetings as representatives with full participatory rights save for formal voting until such time as Partner Fund Directors are formally appointed.

f)   That the effectiveness of the non-executive director appointments process be reviewed after one year of operation

g)  That non-executive director appointments be limited to two consecutive terms of office and of two year duration.