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HS Paper 9/17BOARD MEETING: 24 MARCH 2017BOARD STANDING ORDERS AND COMMITTEE TERMS OF REFERENCERecommendation/action required:The Board is asked to approve the revised Board Standing Orders and Terms ofReference for the Audit, Health Governance, Remuneration and Staff GovernanceCommittees.Author:Sponsoring Director:Jenny KindnessGovernance ManagerGerald McLaughlinChief Executive15 March 2017

HS Paper 9/17BOARD STANDING ORDERS/COMMITTEE TERMS OF REFERENCEPurpose of PaperTo review and approve the Board’s Standing Orders and the Terms ofReference of the Board’s Standing Committees.1.Background2.The current version of the Board Standing Orders was approved at a Boardmeeting on 18 March 2016. Since April 2016, the Board’s standingCommittees have reviewed their Terms of Reference and agreed appropriateamendments, as necessary.3.Audit Committee reviewed its Terms of Reference and The Board’s StandingOrders on 1 February 2017; Health Governance Committee reviewed itsTerms of Reference on 13 January 2017; Staff Governance Committee on 23February 2017, and Remuneration Committee reviewed its Terms ofReference electronically from 14 March to 21 March 2017.4.The Board Standing Orders and Terms of Reference for all four Boardstanding Committees are enclosed, as appendices 1-5.5.Revisions to Terms of Reference (ToRs):a)Health Governance Committee (HGC) ToRs – Paragraph 2 has beenamended and paragraphs 3 and 4 inserted under “Role”, to clarify the roleof the Committee in relation to the Board and the HGC’s role in scrutinisingimpact.b)Health Governance Committee Scrutiny and Assurance Questions – Whenreviewing its Terms of Reference (ToRs) the Committee agreed to adoptthe 9 scrutiny and assurance questions included at the end of the ToRs(appendix 3), and these will be used by HGC members when reviewingstrategic priority agenda items. Paragraph 16 refers to the questions andhas been inserted under “Duties”. Paragraphs 17 and 19 regarding theillustrations of work the HGC will receive have also been added to theToRs.c)Under paragraph 20, items the Health Governance Committee will receive"A bi-annual review of Health Governance effectiveness" was added andthe Participation Standard Report was removed, and will instead be signedoff by Corporate Management Team.d)Minor changes were made to Staff Governance Committee ToRs under“Role” of the Committee, appendix 5 “the ambitions of our StrategicFramework for Action 2017-22 within a changing structural and policylandscape” was added under paragraph 5.2

HS Paper 9/17e)No changes were made to the Audit Committee ToRs and none have sofar been recommended for the Remuneration Committee.Finance and Resource Implications6.There are no additional finance and resource implications.Staff Partnership7.There are no issues in relation to partnership working.Communication and Engagement8.This paper and minutes of any related discussion will be made available onour website, www.healthscotland.comCorporate Risk9.Regular review of Board Standing Orders/Committee Terms of Reference areessential to ensure good governance, the failure of which would also lead toreputational risk to the organisation.Promoting Fairness10.There are no promoting fairness implications.Sustainability and Environmental Management11.There are no anticipated sustainability and environmental managementimplications.Action/ Recommendations12.The Board is asked to approve the Board Standing Orders and revised Termsof Reference for the Audit, Health Governance, Remuneration and StaffGovernance Committees.Jenny KindnessGovernance Manager15 March 20173

HS Paper 9/17Appendix 1NHS HEALTH SCOTLANDSTANDING ORDERS1.These standing orders are based on and drawn up in accordance with TheHealth Boards (Membership and Procedure) (Scotland) Regulations 2001,(Scottish Statutory Instrument 2001 No. 302), hereinafter referred to as theRegulations. Members of the Board are expected to subscribe to and complywith the Board Members’ Code of Conduct made under the Ethical Standards inPublic Life etc. (Scotland) Act 2000.2.Any statutory provision, regulation or direction by Scottish Ministers shall haveprecedence if they are in conflict with these Standing Orders.3.The Board shall meet no fewer than six times in each year. The period betweenmeetings shall not exceed three months.4.The date, hour and place of meetings shall be fixed by the Board. The Boardshall agree the meeting dates for the following financial year by, or at, its lastmeeting of the calendar year.5.Ordinary Board meetings shall be advertised and held in public. The ChiefExecutive shall give at least five clear working days’ notice in writing to eachmember for every ordinary meeting of the Board. Such notice shall includedetails of the business to be transacted at the meeting. Papers for each Boardmeeting will be sent out five working days in advance. Late papers will be sentout or tabled only in exceptional circumstances. The Board shall hold meetingsin private session when deemed appropriate in view of the nature of business tobe discussed.6.The Chair may convene special meetings of the Board at short notice toconsider matters of urgency. The notice convening such meetings shall statethe particular business to be transacted and no other business will becompetent.7.The Chair will be required to convene a special meeting of the Board if s/he is inreceipt of a written requisition to do so signed by no less than one third of themembers of the Board, including at least two who are not also officers of theBoard. Such requisition shall specify the business to be transacted and noother business shall be competent. The meeting must be held within sevendays of the Chair’s receipt of the requisition.8.The Board shall cause minutes of all of its meetings to be prepared recording:a) the names of all members present at a meeting and of those inattendanceb) apologiesc) details of all proceedings, decisions and resolutions of the meeting.4

HS Paper 9/17These minutes shall be circulated to each member before the next meeting ofthe Board when they shall be submitted for the approval of the Board. Whenthe minutes of the previous meeting have been approved they shall be signedby the Chair.9.In accordance with Article 7 of the Regulations, the Board is required to appointa member to act as Vice-Chair. The Vice-Chair shall not be an officer of theBoard.The Vice-Chair’s term of office shall terminate on 1 April in each year and s/heshall be reappointed or replaced by another member, according to the decisionof the Board, at the first meeting of the Board succeeding that date.10. In accordance with Article 8 of the Regulations:a. The Chair shall preside at Board meetings if s/he is present.b. In her/his absence the Vice-Chair shall preside.c. If both are absent the Board shall appoint, from amongst its members butexcluding officers of the Board, an Acting Chair for the meeting in question.d. All matters to be decided by the Board shall be decided by a simple majorityof the members present, but in the case of an equality of votes, the personpresiding at the meeting shall have a second or casting vote.11. All votes shall be taken by a show of hands unless decided otherwise by theChair.12. One third of the whole number of members, including no more than onemember who is an officer of the Board, shall form a quorum for meetings of theBoard.No business requiring a decision shall be transacted at any meeting of theBoard which is inquorate. If it arises during the course of a meeting that aquorum is no longer present, the Chair shall either suspend business until aquorum is re-established or declare the meeting at an end.13. The Chief Executive is designated as NHS Health Scotland’s AccountableOfficer in accordance with sections 14 and 15 of the Public Finance andAccountability (Scotland) Act 2000. As Accountable Officer the Chief Executiveis personally responsible for safeguarding the public funds falling within thestewardship of NHS Health Scotland; for ensuring propriety and regularity in thehandling of those public funds, and for the day-to-day management of NHSHealth Scotland.14. The Chief Executive shall ensure that during any temporary period ofunavailability, there will be a senior officer who can act on his/her behalf. If theabsence exceeds a period of four weeks or more, or the Accountable Officer isincapacitated and unable to discharge his/her responsibilities over this period oftime a substitute Accountable Officer will be appointed.5

HS Paper 9/1715. From amongst its members the Board may appoint Committees, consisting offour or more persons, for the purpose of carrying out its business. SuchCommittees shall be responsible to the Board for all of their actions. ThoseCommittees shall have delegated authority to make decisions within their termsof reference, and such decisions shall subsequently be reported to the Board.For this purpose accurate minutes of each Committee meeting must be kept forsubmission to the Board. Each Committee shall have a Chair who shall be anon-executive Board member and shall be appointed by the Board or by theCommittee concerned from amongst its members, as determined by the Board.In the absence of the Chair, the Committee shall appoint from among itsmembers, but excluding officers of the Board, an Acting Chair for the meeting inquestion.The Board will appoint standing Committees in relation to audit, healthgovernance, staff governance, and remuneration.The Board may co-opt non-members to serve on a Committee, without limit,except that on any Committee the number of co-opted non-members may notexceed the number of non-executive Board members.The Board will review its Committee structure/operation on an annual basis.16. Three members of a Committee, of whom at least two shall be non-executiveBoard members, shall form a quorum.In order to ensure a quorum, a Committee Chair may nominate, either inadvance of the meeting or at the time, another non-executive member of theBoard to be a temporary member of the Committee.No business requiring a decision shall be transacted at any Committee meetingwhich is inquorate. If it arises during the course of a Committee meeting that aquorum is no longer present, the Chair shall either suspend business until aquorum is re-established or declare the meeting at an end.17. In accordance with Article 11 of the Regulations, if a member of the Board or ofa Committee of the Board, or associate of theirs has any pecuniary or otherinterest, direct or indirect, in a contract to be awarded by the Board or aCommittee of the Board, or any other matter to be discussed, s/he shall declarethat interest as soon as possible after the commencement of the meeting. If aconflict of interest is established, the Board member concerned shall withdrawfrom the meeting and shall play no part in the relevant discussion or decision.18. By the decision of the Chair of the Board or of the Chair of a Committee of theBoard, or by the decision of a majority of those present at a meeting of theBoard or of a Committee of the Board, meetings of the Board or of a Committeemay be adjourned at any time to be reconvened at any other day, hour andplace, as the Board or Committee shall decide.6

HS Paper 9/1719. At all meetings of the Board or Committees of the Board it shall be the duty ofthe Chair to preserve order and to ensure that all members are treated fairly.S/he shall decide all questions of order that may arise.20. No motion to alter or rescind a resolution of the Board shall be competent withinsix months of the date of its adoption, except with the consent of a majority ofthe full membership of the Board.21. At the discretion of the Board, any member may be suspended from the Boardor disqualified from taking part in any business of the Board if s/he:a. fails to attend at least three meetings of the Board in any year, withoutspecial leave of absence or without furnishing satisfactory reason to theBoard; orb. conducts her/himself in a manner prejudicial to the best interests of theBoard and its objectives.22. Decisions reserved for the Board and a scheme of delegation are presented asan appendix.23. No motion for the suspension of Standing Orders shall be carried unlesssupported by a majority of the full membership of the Board.24. Proposed amendments to these Standing Orders must be submitted to theChief Executive in writing and must be received by her/him at least seven daysbefore the Board meeting at which the proposal will be considered. To beapproved, any such proposal must be supported by a majority of the fullmembership of the Board.7

HS Paper 9/17DECISIONS RESERVED FOR THE BOARD AND SCHEME OF DELEGATION1.Decisions reserved for the BoardMatters for determination by the Board are as follows:a.strategic direction, business plans and budgets.b.standing orders, including a scheme of delegation.c.standing financial instructions.d.the establishment, terms of reference and reporting arrangements forall Committees and special groups acting on behalf of the Board.e.all items of capital expenditure and disposal of fixed assets.f.financial and auditing reporting arrangements.g.performance management reporting arrangements.h.investment policy for exchequer funds and discharge of trusteeresponsibilities in relation to non-exchequer funds.i.approval of the annual accounts.j.approval of the annual report.8

HS Paper 9/172.Scheme of delegationArea of s)t)Issuing, receiving, opening tenders andpost-tender negotiationsLegal claimsDelegation of budgets and approval tospend fundsOperation of detailed financial mattersincluding bank accounts and bankingproceduresManagement of non-exchequer fundsArrangements for the management ofland, buildings and other assetsbelonging to or leased by the BoardManagement and control of stocksManagement and control of computersystems and facilitiesRisk managementRecording and monitoring of paymentsunder the losses and compensationregulationsMaking ex-gratia paymentsHealth and safety arrangementsInformation Management and InformationGovernanceInsurance arrangementsVirement between appropriate heads ofexpenditure, in line with current guidancePersonnel policies relating toarrangements for the appointment/removal and remuneration of staff.Audit arrangementsApproval of the annual objectives for theChief Executive/Directors, in line with theagreed corporate objectives and businessplanMonitoring compliance with Equality andDiversity RegulationsMonitoring quality of Health Scotland’sHealth Improvement programmesDelegated to postholder orauthorised nomineeHead of Finance and ProcurementChief ExecutiveChief ExecutiveHead of Finance and ProcurementHead of Finance and ProcurementChief ExecutiveHead of Finance and ProcurementDirector of DeliveryDirector of StrategyDirector of StrategyChief ExecutiveDirector of StrategyDirector of StrategyHead of Finance and ProcurementChief ExecutiveStaff Governance CommitteeAudit CommitteeRemuneration CommitteeDirector of StrategyHealth Governance Committee9

HS Paper 9/17Appendix 2NHS HEALTH SCOTLANDAUDIT COMMITTEE: TERMS OF REFERENCEConstitution1.The NHS Health Scotland Board has established a Committee to be known asthe Audit Committee.Role2.The role of the Audit Committee is to assure the Board that an appropriatesystem of control is in place to ensure that: 3.business is conducted in accordance with law and proper standards;public money is safeguarded and accounted for;financial statements are prepared timeously and give a true and fair viewof the financial position of the Board;reasonable steps are taken to prevent fraud and other irregularities;the system of risk management in the organisation is adequate inidentifying risks and allowing the Board to understand the appropriatemanagement of those risks.As the standing committee with responsibility for information governance, theAudit Committee provides the Board with an Information GovernanceImprovement Plan as part of its annual report.Membership4.The Committee is appointed by the Board from amongst the non-executivemembers and consists of not less than 4 members. A quorum shall be 3members. Arrangements for ensuring a quorum are set out in the Board’sStanding Orders.5.The Chair of the Audit Committee will be a Non-executive Board Member,appointed by the Board. Arrangements to deal with the absence of the Chairare set out in the Board’s Standing Orders.6.The Chair of the Board is prohibited from being a member of the AuditCommittee.Attendance at meetings7.The Chair of the Board and other non-executive Board Members have theright to attend Audit Committee meetings and may contribute to the meeting ifinvited to do so by the Chair of the Committee.10

HS Paper 9/178.The Chief Executive and the Lead Officer for Audit are expected to attendmeetings, but are not members of the Committee.9.The Audit Committee can require the attendance of any member of staff.10.The External Auditor and the Internal Auditor are expected to attend AuditCommittee meetings.11.The Board or Committee shall appoint an officer to be Secretary to theCommittee.12.The Audit Committee can exclude all executive Board Members and officersfrom any meeting if the Committee considers this necessary.Frequency of meetings13.Routine meetings shall normally be held quarterly, and at a minimum not lessthan four per year.14.The Committee Members only shall have, at least, one private meeting withboth internal and external auditors each year.15.The Chair of the Audit Committee will be required to convene a specialmeeting of the Audit Committee if s/he is in receipt of a written requisition todo so signed by two Non-executive Board Members or the external auditor,the internal auditor, the Chief Executive, the Executive Finance &Procurement Manager. Such requisition shall specify the business to betransacted and no other business shall be competent. The meeting must beheld within seven days of the Chair’s receipt of the requisition.Authority16.The Committee is authorised by the Board to investigate any activity within itsterms of reference. It is authorised to seek any information it requires fromany employee and all employees are directed to co-operate with any requestmade by the Committee.17.The Committee is authorised by the Board to obtain independent professionaladvice and to secure the attendance of outsiders with relevant experience andexpertise if it considers this necessary.18.The Committee shall receive written and oral evidence from senior staff, andother partners, as appropriate.19.The Committee shall seek to ensure there is an acceptable balance betweenthe value of the information it receives and the time and other costs it takes toacquire and process it.20.The Committee shall ensure good communication and relationships with otherstanding Committees of the Board.11

HS Paper 9/17Duties21.The remit of the Audit Committee shall be a review of the strategic process forrisk control and governance. The key specific duties are:a)assisting in discharging the Board’s responsibilities as they relate tomanagement and internal controls, accounting policies and financialreportingb)reviewing the effectiveness of management information, informationgovernance (including Data Protection and Freedom of Information Actcompliance) and other systems of controlc)reviewing accounting policies adopted and any changes in accountingprinciples or practices introducedd)reviewing arrangements established by management for compliance withany regulatory or administrative requirements; reviewing policies andpractices involving counter fraud, whistleblowing, special investigations,legal compliance, ethics and other such matters, and ensuring that theseare adequatee)acting as a channel of communication between the Board and bothinternal and external auditors and other interested partiesf)undertaking an annual review of all statutory audit material, in particularany annual report or management letter relating to certification of theBoard’s accountsg)holding meetings with the External Auditor, if necessary, to discuss hisannual report, the scope of his audit examination and any matters whichhe wishes to discuss, with or without any members of staff being presenth)a regular review of action planned and undertaken by the Board’smanagement to remedy weaknesses or other criticisms of the Board’sfinancial management made by the External Auditori)appointing the internal auditor and agreeing the feej)noting the appointment of the External Auditor by Audit Scotland andagreeing the feek)agreeing long and short term internal audit plans, and discussing theexternal audit programme of workl)monitoring progress of internal audit’s coverage against long and shortterm plans12

HS Paper 9/17m)determining if the internal audit service is properly staffed, trained andequipped, and reviewing the operational effectiveness of the servicen)consideration of the findings of internal audit reports and investigations,and the overseeing and reviewing of the management response andaction takeno)consideration of occasional reports issued by the Audit Commission forEngland and Wales, the National Audit Office, the AccountsCommission, Audit Scotland, NHS Counter Fraud Services and othersimilar bodiesp)reviewing the Board’s standing orders and standing financial instructionsq)reviewing schedules of losses and compensations including theft, fraudand other financial irregularitiesr)reviewing the Annual Accounts and making recommendations to theBoard regarding adoption of these accountss)reviewing the strategic processes for risk including review of thecorporate risk register, control and governance and the GovernanceStatement (on internal control)t)reviewing assurances relating to the corporate governance requirementsfor the organisationu)undertaking periodic reviews of delivery against agreed sustainabilityinitiativesv)undertaking periodic reviews of progress against the organisationalEquality Outcome related to systems and processesw)reviewing an annual summary of the Board’s waiving of the tenderprocessx)to be the lead governance sub-committee for EFQM work (subject toBoard approval)Reporting procedures22.Accurate minutes of each Committee meeting will be kept and submitted tothe Board for homologation of all decisions taken by the Committee.23.The Audit Committee will report to the Board annually on its work and give therelevant assurance to the Board relating to the Governance Statement. In itsannual report the Audit Committee should give a view on the Board’seffectiveness within the guidance on corporate governance.13

HS Paper 9/1724.Additional reports will be provided to the Board as required to ensure it isinformed of current issues.Review25.The terms of reference, remit and effective working of the Audit Committeewill be reviewed annually.14

HS Paper 9/17Appendix 3NHS HEALTH SCOTLANDHEALTH GOVERNANCE COMMITTEE: TERMS OF REFERENCEConstitution1.The NHS Health Scotland Board has established a Committee to beknown as the Health Governance Committee.1.The role of the Health Governance Committee is to review the evidencethat NHS Health Scotland’s activities make an effective contribution totackling health inequalities and improving health. This is to ensure thealignment of work with the ten agreed principles; do good, do no harm;fairness; sustainability; respect; participation; empowerment; socialresponsibility; openness; and accountability2.The Health Governance Committee will, on behalf of the Board,examine and comment on the quality (including the dimension ofimpact) of work in each of the Strategic Priorities that support theStrategy of the organisation. This will be themed under Knowledge intoAction to reflect the Board’s purpose.3.The Health Governance Committee will do this through a Programmeof business that includes the proper sampling of the work undertakenby the Board.RoleMembership4.The Committee is appointed by the Board from amongst the nonexecutive members and consists of not less than 4 members. Aquorum shall be 3 members. Arrangements for ensuring a quorum areset out in the Board’s Standing Orders.5.The Chair of the Health Governance Committee will be a non-executiveBoard Member, appointed by the Board. Arrangements to deal with theabsence of the Chair are set out in the Board’s Standing Orders.6.The Chair of the Board and other NHS Health Scotland non-executiveBoard Members have the right to participate in meetings.7.The Board or Committee will ensure the appointment of a Secretary tothe Committee.15

HS Paper 9/17Frequency of meetings8.Routine meetings shall normally be held quarterly, and at a minimumnot less than twice per year. The Health Governance Committee Chairmay call meetings more frequently if deemed necessary.Authority9.The Committee is authorised by the Board to investigate any activitywithin its terms of reference. It is authorised to seek any information itrequires from any employee and all employees are directed to cooperate with any reasonable request made by the Committee.10.The Committee is authorised by the Board to obtain independentprofessional advice and to secure the attendance of outsiders withrelevant experience and expertise if it considers this necessary. TheCommittee shall have delegated authority to act on behalf of the HealthScotland Board to assure, recommend and report to the Board on thequality and impact of Health Scotland’s improving health and reducinghealth inequalities programmes.11.The Committee will receive written and oral evidence from senior staffand other partners, as appropriate.12.The Committee will seek to ensure there is an acceptable balancebetween the value of the information it receives and the time and othercosts it takes to acquire and process it.13.The Committee will ensure good communication and relationships withother standing Committees of the Board.Duties14.The Committee will ascertain whether there is consistent evidence thatHealth Scotland’s activities are achieving outcomes which provide thegreatest opportunity to make a positive impact and promote action toreduce inequalities and improve health.15.The Committee will consider specific illustrations from each of theStrategic Priorities within the organisational strategy. The scrutinyquestions in Appendix 1 of the ToR will be used to assist members.16.This is to ensure that these activities and illustrations:(a) are consistent with NHS Scotland Quality Ambitions of: being safe person-centred and effective16

HS Paper 9/17(b) meet the three Health Governance Committee quality assurancestandards of “Knowledge into Action”: Standard 1 – Knowledge generation Standard 2 – Knowledge management Standard 3 – Knowledge application(c) meet the Boards role in quality assurance, embracing the EuropeanFoundation of Quality Management (EFQM) standards of: Leadership Strategy People Partnership and Resources Processes, Products and Services And the results for: People, Customer, Society and BusinessThis will embrace members considering the scrutiny questions framed aroundthese EFQM standards in Appendix 1 when scrutinising the Strategic Prioritywork.17.The Committee will review illustrations of work that have made positivecontributions, as well as evidence of work that have encounteredchallenge, generated learning and necessitated improvementmeasures.18.Papers to the Health Governance Committee will indicate theirpurpose, either for decision, discussion or noting.19.In addition to the Strategic Priority illustrations, the Health GovernanceCommittee will receive items as follows: Reports on the risks assigned to the Health GovernanceCommittee from the Corporate Risk Register, at each meetingAn annual report on the equality outcomes assigned to theHealth Governance CommitteeAn annual report on Significant RisksA bi-annual review of Health Governance effectivenessAnnual Assurance Statement and ReportAnnual Review of Terms of ReferenceForward planner of businessReporting procedures21. Accurate minutes of each Committee meeting will be kept and submitted to theBoard for approval of all decisions taken by the Committee.17

HS Paper 9/1722. Additional reports will be provided to the Board as required to ensure it isinformed of current issues.Review23. The terms of reference, remit and effective working of the Health GovernanceCommittee will be reviewed annually.January 201718

HS Paper 9/17Appendix 1Health Governance Committee (HGC) scrutiny and assurance questionsThese questions have been aligned to the EFQM standards outlined in paragraphnumber 16 of the ToR. They are offered as prompts for HGC members in relation toStrategic Priority agenda items: Does the Strategic Priority illustration have a clear alignment to theHealth Scotland vision and the Strategic Priority?Are you satisfied that the Strategic Priority illustrations carries out andprovides evidence on quality improvement in a way which promotesequality, tackles discrimination and addresses health inequalities?Is there good definition of performance and impact measures and dothey relate closely to specific actions described?Is there evidence of stakeholder analysis and engagement, feedback,demand (for the product/service) and participation?Is there evidence of the application of the three Knowledge into Action(KIA) standards in a cyclical way? For example is the learning fromapplying action being integrated to knowledge generation andknowledge management (continuous improvement)?Have there been resource issues in relation to staff and budgets?Have the Strategic Priority illustrations identified and managed specificrisks, as well as corporate risks?Is there satisfactory evidence of achieving impact and being on trackwith expected outcomes?Have the authors drawn out improvement lessons and clearly identifiedactions resulting from lessons? To what extent are these lessons

BOARD STANDING ORDERS/COMMITTEE TERMS OF REFERENCE Purpose of Paper 1. To review and approve the Board's Standing Orders and the Terms of Reference of the Board's Standing Committees. Background 2. The current version of the Board Standing Orders was approved at a Board meeting on 18 March 2016. Since April 2016, the Board's standing