CAIRNGORMS NATION­AL PARK AUTHORITY

Audit & Risk Com­mit­tee Paper 3 20/04/21

Title: Gov­ernance Respons­ib­il­ity Statement

Pre­pared by: Dav­id Camer­on, Dir­ect­or of Cor­por­ate Services

Pur­pose of Paper

1. Board, seni­or officers and intern­al audit have all iden­ti­fied a require­ment to set out a state­ment of the respect­ive respons­ib­il­it­ies for Exec­ut­ive Man­agers and Non-Exec­ut­ive Mem­bers in decision-mak­ing with­in Cairngorms NPA in order to estab­lish a clear under­stand­ing of this ele­ment of the Authority’s gov­ernance. This paper sets out some ini­tial ideas for dis­cus­sion on devel­op­ment of a Gov­ernance Respons­ib­il­ity State­ment for the Cairngorms Nation­al Park which aims to sup­port devel­op­ment of clar­ity and under­stand­ing of decision-mak­ing respons­ib­il­it­ies with­in the Cairngorms NPA.

Object­ives of Work

1. The Chartered Insti­tute of Pub­lic Fin­ance and Account­ancy (CIPFA) defines gov­ernance as ​“the arrange­ments put in place to ensure that the inten­ded out­comes for stake­hold­ers are defined and achieved¹”. The work around devel­op­ing a Gov­ernance Respons­ib­il­ity State­ment seeks to identi­fy those who have a role to play in devel­op­ment and deliv­ery of good gov­ernance with­in the Cairngorms NPA and estab­lish a clar­ity around the respect­ive decision mak­ing respons­ib­il­it­ies of those involved in governance.

2. As a Non-Depart­ment­al Pub­lic Body (NDPB) the Cairngorms NPA has over-arch­ing gov­ernance arrange­ments unique to our sec­tor and with sig­ni­fic­ant vari­ations from com­mer­cial, loc­al author­ity and oth­er pub­lic sec­tor gov­ernance. The Frame­work Agree­ment between the Author­ity and Scot­tish Gov­ern­ment is the key doc­u­ment in estab­lish­ing the gov­ernance of the organ­isa­tion. Cru­cially in con­sid­er­ing decision mak­ing respons­ib­il­it­ies with­in the Author­ity, the Frame­work Agree­ment con­firms a dual­ity of account­ab­il­ity and respons­ib­il­ity for the decisions made by the organ­isa­tion between the Con­vener, on behalf of the Non-Exec­ut­ive Board and its mem­bers, and the Chief Exec­ut­ive on behalf of the Exec­ut­ive Man­age­ment Team.

3. The gov­ernance of the Author­ity is a part­ner­ship and team effort, in which the work and lead­er­ship of Non-Exec­ut­ive Board mem­bers is com­ple­men­ted by the work and lead­er­ship of the Exec­ut­ive Man­age­ment and wider staff group. The object­ives of estab­lish­ing a Gov­ernance Respons­ib­il­ity State­ment is to estab­lish as much clar­ity as pos­sible around the respons­ib­il­it­ies of those involved in gov­ernance and decision mak­ing in order to provide effect­ive gov­ernance of the Authority.

4. The nature of the Cairngorms NPA’s gov­ernance arrange­ments is such that it is impossible to elim­in­ate the need for judge­ment in estab­lish­ing the cor­rect level of decision mak­ing in a num­ber of aspects of our work. As such, it is not pos­sible to set out pre-spe­cified lines of del­eg­ated author­ity in all instances. This work on devel­op­ing a Gov­ernance Respons­ib­il­ity State­ment there­fore also helps estab­lish those aspects of decision mak­ing where some judge­ment remains as to appro­pri­ate decision mak­ing processes.

5. Through cla­ri­fy­ing spe­cif­ic areas of Non-Exec­ut­ive and Exec­ut­ive decision mak­ing respons­ib­il­ity and estab­lish­ing that judge­ment and over­lap of respons­ib­il­ity will con­tin­ue to some degree, this doc­u­ment aims to help estab­lish a sol­id found­a­tion for the gov­ernance of the Author­ity through clar­ity of under­stand­ing and mutu­al respect for rel­ev­ant roles and respons­ib­il­it­ies involved.

6. Over­all, the aim of the work sup­por­ted by this doc­u­ment is estab­lish­ing gov­ernance arrange­ments appro­pri­ate to an NDPB which: a) Sup­port an effect­ive exec­ut­ive / non-exec­ut­ive work­ing rela­tion­ship and part­ner­ship; b) Provide clar­ity and under­stand­ing of respect­ive respons­ib­il­it­ies of key gov­ernance roles not­ably Con­vener, Chief Exec­ut­ive Officer, Deputy Con­vener, [Deputy Chief Exec­ut­ive], Board Mem­bers and mem­bers of the Seni­or Man­age­ment Team (SMT) par­tic­u­larly where those mem­bers of the SMT have spe­cif­ic, del­eg­ated decision mak­ing respons­ib­il­it­ies; c) Estab­lish a clear under­stand­ing over the decision mak­ing respons­ib­il­it­ies of those parties involved in gov­ernance. d) Recog­nise areas of over­lap between gov­ernance roles; identi­fy aspects of ongo­ing judge­ment which will be required in exer­cise of respons­ib­il­ity; and thus help devel­op and main­tain col­lab­or­at­ive, respect­ful team work­ing under­pinned by clear­er under­stand­ing of roles, respons­ib­il­it­ies and judge­ments; e) Help embed mutu­al respect and under­stand­ing between all involved in aspects of stra­tegic and organ­isa­tion­al man­age­ment; f) Com­ple­ment, sup­port and embed the oper­a­tion of oth­er key gov­ernance policies and pro­ced­ures (see sec­tion on key ref­er­ences) and not­ably the imple­ment­a­tion of the [Frame­work Agree­ment], Code of Con­duct, Scot­tish Pub­lic Fin­ance Manu­al (SPFM), Busi­ness Con­tinu­ity Plan and effect­ive oper­a­tion of Board and its Com­mit­tee with­in their agreed remits. g) Pro­mote, sup­port and embed organ­isa­tion­al val­ues through­out all aspects of the Cairngorms NPA’s work through lead­er­ship from the most seni­or indi­vidu­als respons­ible for governance.

7. The Audit and Risk Com­mit­tee is invited at this time to con­sider the appro­pri­ate­ness of the above aims for this ele­ment of the work on gov­ernance and estab­lish­ing a Gov­ernance Respons­ib­il­ity State­ment for the Cairngorms NPA as set out in the fol­low­ing document.

8. The devel­op­ment of the draft Gov­ernance Respons­ib­il­ity State­ment is a work in pro­gress. This early draft is brought to the Com­mit­tee at this point as a check on the dir­ec­tion of travel and to test with the mem­bers of the Com­mit­tee wheth­er the con­tin­ued devel­op­ment of a doc­u­ment along the lines set out in the fol­low­ing sec­tion of this paper is likely to adequately cov­er the needs of the Cairngorms NPA in address­ing the need for great­er clar­ity around gov­ernance roles and their decision mak­ing responsibilities.

A Gov­ernance Respons­ib­il­ity Statement

1. The label of Gov­ernance Respons­ib­il­ity has been adop­ted for use in this dis­cus­sion paper, as the CNPA is an NDPA with dif­fer­ing arrange­ments to oth­er areas of the pub­lic sector.

Gov­ernance Responsibilities

1. The [Frame­work Agree­ment] is a key doc­u­ment set­ting out the gov­ernance respons­ib­il­it­ies of key indi­vidu­als, roles and groups with­in the Author­ity. Brief extracts of that doc­u­ment are set out here to give con­text of the key respons­ib­il­it­ies of those with gov­ernance respons­ib­il­it­ies which have a sig­ni­fic­ant bear­ing on decision mak­ing respons­ib­il­it­ies. The full nar­rat­ive on respons­ib­il­it­ies may be referred to with­in the [Frame­work Agree­ment] and sup­port­ing doc­u­ment­a­tion such as the Code of Con­duct and On Board guidance.

Scot­tish Ministers

1. The Scot­tish Min­is­ters are ulti­mately account­able to the Scot­tish Par­lia­ment for the activ­it­ies of the NDPB and its use of resources.

The Cairngorms NPA Board

1. The role of the board is to provide lead­er­ship, dir­ec­tion, sup­port and guid­ance to ensure the Author­ity deliv­ers and is com­mit­ted to deliv­er­ing its func­tions effect­ively and effi­ciently and in accord­ance with the aims, policies and pri­or­it­ies of the Scot­tish Min­is­ters. Key ele­ments of these respons­ib­il­it­ies of rel­ev­ance to the devel­op­ment of this Gov­ernance Respons­ib­il­ity State­ment are: a) Tak­ing for­ward the stra­tegic aims and object­ives for the body agreed by the Scot­tish Min­is­ters; b) Determ­in­ing the steps needed to deal with changes which are likely to impact on the stra­tegic aims and object­ives of the NDPB or on the attain­ab­il­ity of its oper­a­tion­al tar­gets; c) Pro­mot­ing the effi­cient, eco­nom­ic and effect­ive use of staff and oth­er resources by the NDPB con­sist­ent with the prin­ciples of Best Value; d) Ensur­ing that effect­ive arrange­ments are in place to provide assur­ance on risk man­age­ment (includ­ing in respect of per­son­nel, phys­ic­al and cyber risks/​threats/​hazards), gov­ernance and intern­al con­trol; AND e) Ensur­ing that the board receives and reviews reg­u­lar fin­an­cial inform­a­tion con­cern­ing the man­age­ment and per­form­ance of the NDPB and is informed in a timely man­ner about any con­cerns regard­ing the activ­it­ies of the NDPB.

2. The board must set up an audit com­mit­tee chaired by a non-exec­ut­ive mem­ber to provide inde­pend­ent advice and assur­ance on the effect­ive­ness of the intern­al con­trol and risk man­age­ment systems.

The Con­vener

1. The Con­vener is account­able to the Scot­tish Min­is­ters and, in com­mon with any indi­vidu­al with respons­ib­il­ity for devolved func­tions, may also be held to account by the Scot­tish Par­lia­ment. Com­mu­nic­a­tions between the NDPB board and the Scot­tish Min­is­ters should nor­mally be through the Convener.

2. The Con­vener is respons­ible for ensur­ing that the NDPB’s policies and actions sup­port the Scot­tish Min­is­ters’ wider stra­tegic policies and that its affairs are con­duc­ted with probity.

3. The Convener/​Depute Con­vener have a par­tic­u­lar lead­er­ship respons­ib­il­ity on the fol­low­ing mat­ters: a) For­mu­lat­ing the Board’s strategy; b) Ensur­ing that the Board, in reach­ing decisions, takes prop­er account of guid­ance provided by the Scot­tish Min­is­ters; c) Pro­mot­ing the effi­cient and effect­ive use of staff and oth­er resources; d) Encour­aging high stand­ards of pro­pri­ety and reg­u­lar­ity; AND e) Rep­res­ent­ing the views of the Board to the gen­er­al public.

Non-Exec­ut­ive Board Members

1. Indi­vidu­al board mem­bers should act in accord­ance with the respons­ib­il­it­ies of the board as a whole and com­ply at all times with the code of con­duct adop­ted by the NDPB and with the rules relat­ing to the use of pub­lic funds and to con­flicts of interest. In this con­text ​“pub­lic funds” means not only any funds provided to the NDPB by the Scot­tish Min­is­ters but also any oth­er funds fall­ing with­in the stew­ard­ship of the NDPB, includ­ing trad­ing and invest­ment income, gifts, bequests and donations.

Chief Exec­ut­ive and Account­able Officer and their Exec­ut­ive Team

1. The Chief Exec­ut­ive Officer and Account­able Officer (CEO) is the board’s prin­cip­al adviser on the dis­charge of its func­tions and is account­able to the board. The CEO’s role is to provide oper­a­tion­al lead­er­ship to the NDPB and ensure that the board’s aims and object­ives are met and the NDPB’s func­tions are delivered and tar­gets met through effect­ive and prop­erly con­trolled exec­ut­ive action. The CEO’s gen­er­al respons­ib­il­it­ies include the per­form­ance, man­age­ment and staff­ing of the NDPB.

2. These respons­ib­il­it­ies will typ­ic­ally be sup­por­ted by a del­eg­a­tion of author­ity to a wider exec­ut­ive man­age­ment team, which for Cairngorms NPA is the team of Dir­ect­ors sup­por­ted by Heads of Service.

Gov­ernance Respons­ib­il­ity and Exer­cise of Judgement

1. While the Gov­ernance Respons­ib­il­ity State­ment seeks to estab­lish as much clar­ity as pos­sible around determ­in­ing the respect­ive respons­ib­il­it­ies of those involved in gov­ernance, there are some areas where it is not pos­sible to draw up abso­lute lines of respons­ib­il­ity and which have some areas of over­lap. Judge­ment and sens­it­iv­ity to oth­ers’ involve­ment and respons­ib­il­it­ies will always be required in most areas of the Cairngorms NPA’s work and the gov­ernance of it. The Gov­ernance Respons­ib­il­ity State­ment is there­fore developed to cla­ri­fy points of sub­jectiv­ity and the require­ment for judge­ment and decision mak­ing. It does not seek to remove the need for judge­ment and decision mak­ing on areas of poten­tial over­lap of responsibility.

2. One means of estab­lish­ing great­er clar­ity around areas of judge­ment on where gov­ernance and man­age­ment respons­ib­il­ity lies on issues, and help­ing to cla­ri­fy the respect­ive roles and respons­ib­il­it­ies of Exec­ut­ive and Non-Exec­ut­ive is to estab­lish chal­lenge ques­tions or cri­ter­ia for assess­ment. For example, the fol­low­ing chal­lenge ques­tions / key prin­ciples may be used to assess when judging where decision mak­ing falls: a) Is a decision estab­lish­ing or amend­ing a long-term object­ive, out­come or per­form­ance meas­ure of the organ­isa­tion? b) Is a decision unique or nov­el? c) Does a decision have the poten­tial to sig­ni­fic­antly and adversely impact on the repu­ta­tion of the Cairngorms NPA? d) Does an action have the poten­tial to cre­ate a sig­ni­fic­ant and / or a long-term liab­il­ity for the organ­isa­tion (long-term being hav­ing fin­an­cial impacts bey­ond the exist­ing Cor­por­ate Plan peri­od)? e) Does a decision or action have the poten­tial to cre­ate a new stra­tegic risk for the organ­isa­tion or to escal­ate the sig­ni­fic­ance of an exist­ing stra­tegic risk? f) Does a decision or action impact on the over­arch­ing gov­ernance of the organisation?

3. Where these ques­tions are answered ​“yes”, the implic­a­tion is that such decisions are mat­ters of stra­tegic policy and gov­ernance and res­ol­u­tion should there­fore err toward a mat­ter for Board determ­in­a­tion through appro­pri­ate routes.

4. Equally, in dis­cus­sions over aspects of scru­tiny and decision mak­ing, there is judge­ment to be exer­cised in determ­in­ing wheth­er the aspect of decision mak­ing is a Non-Exec­ut­ive or Exec­ut­ive func­tion: a) Is the decision around what is to be achieved or how an out­come is to be delivered? b) Is the decision about wheth­er a pro­ject is deliv­er­ing against a stra­tegic out­come or how the pro­ject is being man­aged / designed / delivered?

5. Where these ques­tions are answered on the basis of scru­tiny or assur­ance over out­comes or final achieve­ments, there is an appro­pri­ate area of Board scru­tiny and assur­ance. Where ques­tions are about how things are being done; how pro­jects or activ­it­ies are being designed, man­aged or imple­men­ted, then these mat­ters are stray­ing more into exec­ut­ive man­age­ment responsibilities.

Non-Exec­ut­ive Assurance

1. In addi­tion to decision mak­ing respons­ib­il­it­ies on aspects related to gov­ernance and strategy, Non-Exec­ut­ive Board mem­bers also have a role to seek assur­ance over cer­tain key ele­ments of the Authority’s oper­a­tions. There is a key dis­tinc­tion here from decision mak­ing respons­ib­il­it­ies. As out­lined in 25, the role is one of ensur­ing there is appro­pri­ate report­ing and evid­ence avail­able to allow board mem­bers to take con­fid­ence that stra­tegic object­ives are being met. Where there are issues, Board Mem­bers should also have assur­ance that these have been escal­ated to stra­tegic Board levels, with appro­pri­ate resolution.

2. The key areas of assur­ance work for board mem­bers are: a) Pro­mot­ing the effi­cient, eco­nom­ic and effect­ive use of staff and oth­er resources by the NDPB con­sist­ent with the prin­ciples of Best Value; b) Per­form­ance in attain­ment of agreed cor­por­ate plan stra­tegic out­comes; c) Per­form­ance in attain­ment of agreed key per­form­ance meas­ures; d) Mit­ig­a­tion of agreed stra­tegic risks; and e) Design and deploy­ment of appro­pri­ate and effect­ive intern­al controls.

3. As set out in this doc­u­ment, alloc­a­tion of respons­ib­il­ity for action in areas of gov­ernance with­in an NDPB can­not always be assigned solely to the board or the Exec­ut­ive. There is an essen­tial require­ment for an effect­ive team dynam­ic between those charged with gov­ernance respons­ib­il­it­ies in deliv­er­ing an effect­ive and per­form­ing sys­tem of gov­ernance. An illus­tra­tion of this situ­ation over the key aspects of gov­ernance with­in CNPA is set out in the fol­low­ing ​“Map of Gov­ernance Responsibility”.

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¹Inter­na­tion­al Frame­work: Good Gov­ernance in the Pub­lic Sec­tor; CIPFA; 2014

(The rest of the doc­u­ment con­tains tables and dia­grams which can­not be eas­ily con­ver­ted to mark­down without los­ing format­ting. The tables are present in the ori­gin­al OCR output.)