Agenda item

Report of the Managing Director of BHE

The Board considered a report of the Managing Director of BHE setting out matters for decision which are recommended to support the Board in the ongoing effective administration and governance of BHE, consistent with the City Corporation’s legal obligations as Trustee of the charity. The Managing Director of BHE introduced the report and drew Members’ attention to the key points, also outlining each item requiring the Board’s consideration in turn and the options for decision.

Review of the BHE Board’s Terms of Reference

The Board discussed the BHE Board’s Terms of Reference, noting several amendments proposed by officers. Members commented that they felt Co-opted Members were more suitable for the main Board than Board Committees, but agreed to maintain flexibility and agreed retaining up to two rather than three Co-optees within the Board’s membership could be supported.

The Board agreed that the provision within the Board’s Terms of Reference for reporting to the Court of Common Council should be amended from biannual to annual, subject to the approval of the Court of Common Council.

Other BHE Board Governance and Delegation Arrangements

The Board agreed that other governance arrangements outlined, such as levels of delegation should be continued without amendment, noting that these matters were regularly reviewed as necessary.

Committees of the Board

The Board considered whether to establish a Bridge Management Committee for the ensuing year. Members discussed the potential benefits and challenges of establishing such a Committee, and arising from the discussion the Board agreed to defer a decision on this matter to the next meeting.

The Board then agreed that the Grants Committee should be reconstituted for the ensuing year, and supported the extension of the current terms of the two existing co-optees on the Committee which would be progressed in accordance with the agreed process for appointing Co-opted members.

Investments

The Managing Director of BHE introduced and outlined the options available to the Board with regards to City Corporation governance for the administration and management of BHE’s investments, both arising from the City Corporation’s wider corporate governance review and in the context of regular review by the Board of its Terms of Reference in administering and having responsibility for the day-to-day management of the charity. The Deputy Chair noted the current position before drawing the Board’s attention to the options outlined and recommendations.

Arising from discussion of the recommendations relevant to the outcomes of the City Corporation’s Lisvane (Corporate Governance) Review, the Board agreed not to participate in informal joint meetings with other City Corporation investment committees in developing investment strategies for the charity and for the City Corporation’s other Funds, nor to establish a formal joint sub-committee with the Policy & Resources and Finance Committees that would have delegated authority to undertake the operational management of BHE investments. Members commented that the existing arrangements, with the wider City Corporation Investment Boards having an advisory role to the BHE Board in respect of BHE investments, were satisfactory for the time being, and that it was not clear that informal joint meetings for the development of investment strategy were necessary for the time being.

Members then discussed the options outlined regarding a prospective BHE Finance & Investment Committee of the BHE Board. The Board agreed to retain these functions at Board level for the ensuing year, but that establishing a BHE Investment Committee should be a longer-term aspiration, as the charity’s Investment Strategy was likely to diverge from that of the City Corporation’s other Funds over time, and this would support the Board in independently and more actively pursuing avenues such as green and social investments where considered to be in the best interests of the charity.

Audit & Risk Management Committee

The Board agreed not to establish a BHE Audit & Risk Management Committee and to retain these functions at Board level for the ensuing year.

Social Investments

The Board agreed that decisions on social investments would be retained at Board level for the ensuing year, noting that further discussion on social investments would take place following the anticipated grant of the Supplemental Royal Charter and associated social investment powers.

RESOLVED - That Members, in the discharge of functions for the City Corporation as Trustee of Bridge House Estates (Charity No. 1035628) and solely in the charity’s best interests:

1. Review the Terms of Reference of the Bridge House Estates Board and agree the proposed amendments outlined in the report for submission to the Court in April 2022; with the exception of the following matters:

• The Board’s membership shall include provision for ‘Up to 2 external co-opted members’, rather than ‘3 external co-opted members’; and
• The Board’s requirement to report to the Court of Common Council shall be amended from ‘at least biannually’ to ‘at least annually’;

2. Agree the proposals set out at paragraphs 17 – 22 in relation to other arrangements of the BHE Board relating to levels of delegations, co-option, frequency of meetings, agendas, style of reports and culture, noting that these matters will be kept under review;

3. Agree that a decision in relation to the discharge of functions pertaining to the primary object of the charity, either by retaining all functions at the Board level or by establishing and making further delegations to a Bridge Management Committee, shall be deferred to the April meeting of the Board;

4. Agree to support the reconstitution of the Grants Committee of the BHE Board in April 2022 for the ensuing year, and endorse the extension of the terms of the current Co-opted Members of the Committee in accordance with the terms of the agreed Co-option Protocol;

5. Decline to agree the recommendations within the City Corporation’s Lisvane Review at paragraphs 38 – 46, to:

a. Participate in a joint informal investment meeting of Resource Allocation (Policy & Resources) Sub Committee, together with the Chairs and Deputy Chairs of Finance Committee and the Financial Investment Board (“FIB”) and Property Investment Board (“PIB”); and/or,

b. Establish PIB and FIB as a formal joint sub-committee of Policy & Resources and Finance Committees and the BHE Board;

6. Agree to retain finance and investment functions at the Board level for the ensuing year, with the longer-term aim of establishing one or more Board Committees in the future to discharge these functions under delegated authority;

7. Agree to retain all audit & risk functions at the Board level and continue to seek advice from the City Corporation’s Audit & Risk Management Committee, as appropriate; and

8. Agree to retain all social investment functions at Board level for the time being.