Board 11/02/05
Terms of Reference for the craftscotland Ltd Board of Directors
(based on a model produced by Bonnar Keelyside Ltd)
1. Legal context
1.1. craftscotland Ltd is a Company Limited by Guarantee.
1.2. The legal framework for Directors is described in the Memorandum and Articles of Association. The Directors of craftscotland need to ensure that the company complies with legislation relating to corporate law and to charitable operations.
2. The Board of Directors and its corporate responsibilities
2.1. With the exception of the representative of the website management company, the members of the Board of craftscotland Ltd are non-executive Directors, whose responsibility it is to appoint contractors to manage and develop the national crafts web resource and craftscotland brand and deliver the Board’s policies.
2.2. The Board is the ultimate decision-making body and is responsible for the general control and governance of craftscotland Ltd as a whole.
2.3. It is under the authority of the Board that craftscotland Ltd receives and spends craftscotland Ltd’s money and enters and implements all contracts.
2.4. The Board has various interlinking corporate and charitable legal responsibilities:
2.4.1. To direct craftscotland Ltd in accordance with its Memorandum and Articles of Association, including particularly to ensure that they qualify as charitable objectives;
2.4.2. A duty of skill and care, to act in good faith, to exercise the powers and duties of office honestly and for proper purposes, in the best interests of craftscotland Ltd, avoiding any action that would conflict with craftscotland Ltd’s interests;
2.4.3. Duties and responsibilities under the relevant statutes, especially the Companies Act 1985, where no distinction is made between executive and non-executive Directors;
2.4.4. Duties and responsibilities under common law, particularly a fiduciary duty to craftscotland Ltd ensuring timely accounts and proper annual auditing; particular attention is drawn, at the time of establishing the Company, to the implications of changes in VAT law;
2.4.5. To ensure solvency at all times;
2.4.6. To assess and manage risk;
2.4.7. To implement provisions concerning the Directors, their numbers, powers, appointments, self-assessment, retirements, disqualification and removal, expenses, indemnity insurance, proceedings, the Company Secretary and minutes of meetings;
2.4.8. To ensure that all members of the company will contribute £1 if the company is wound up.
3. The seven principles of public life
All Board members are Directors of a national organisation with charitable status and in carrying out their roles and responsibilities should abide by the seven principles of public life, as recommended by the Nolan committee’s report, ‘Standards in Public Life’. In summary these principles are:
3.1. Selflessness: holders of public office should take decisions solely in terms of public interest and not in the interests of themselves, their family or friends;
3.2. Integrity: holders of public office should not place themselves under any obligation to a third party which might influence them in the performance of their public duties;
3.3. Objectivity: all decisions involving awarding of contracts, benefits or rewards should be made on merit;
3.4. Accountability: holders of public office are accountable to the public for their actions and should submit themselves to the appropriate scrutiny;
3.5. Openness: holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands;
3.6. Honesty: holders of public office have a duty to declare any private interests relating to their public duty and resolve any conflicts so as to protect the public interest:
3.7. Leadership: holders of public office should promote and support these principles by leadership and example.
4. Board operations
4.1. The Board is a corporate body. For individual Directors this means:
4.1.1. Once decisions are take collectively at formal meetings, all Directors should respect the decision even if they do not agree with it;
4.1.2. No individual Director can speak on behalf of the Board unless specifically authorised by the Chairman to do so;
4.1.3. No individual Director can instruct contractors or take management action unless specifically authorised by the Board to do so;
4.1.4. Accountability for decisions is shared by all Board members, not by individual Directors.
4.2. It also has implications for the way that Directors go about their business, which should include:
4.2.1. A willingness to work co-operatively with other Directors in craftscotland Ltd‘s best interests;
4.2.2. Respecting corporate decisions once they have been taken, whatever one’s personal view of the matter;
4.2.3. Respecting any decision that a matter should remain confidential to the Board.
4.2.4. All Directors have an equal right to participate and to state their views, whilst respecting those of others.
4.3. Individual directors are also required to comply with completing an annual register of interests.
5. Confidentiality
5.1. Board members and others in attendance at meetings are expected to regard the Board’s deliberations and conclusions as strictly confidential. The Chairman will decide who will present the Board’s policy and decisions outside the Boardroom.
5.2. All deliberations of the Board remain confidential with no time limit. Board Directors carry this responsibility even if they cease to be a member of the Board.
6. Recruitment and membership
6.1. Half the total number of Board members is appointed by the Scottish Arts Council on the advice of the Board, and the balance freely elected by craftscotland Ltd members. Board members are appointed for a first term of up to four years from the date of first appointment, followed by a final term (if appointed/re-elected) of up to three years.
6.2. It is the responsibility of the Board to undertake succession planning, and to ensure that the nominations recommended to the Scottish Arts Council encompass the full spread of expertise required by the Board. It would normally be expected that the Board would include a number of crafts practitioners and individuals from different aspects of the sector.
7. Board responsibilities
7.1. In the overall legal context, the Board’s direct responsibilities for craftscotland Ltd are:
7.1.1. Entering, implementing and, if necessary, terminating contracts;
7.1.2. Approval of craftscotland Ltd’s mission statement and objectives, its strategic, artistic, and educational plans, and its operational, marketing, access and fundraising strategies;
7.1.3. Approval of financial plans and accounts including annual budgets, medium term financial strategies and projections, cash flow strategies and the annual report and accounts;
7.1.4. Fiduciary responsibilities to ensure that craftscotland Ltd meets its fiduciary duties;
7.1.5. Legislation and legal requirements to ensure compliance with all relevant statutory requirements and the Company’s Memorandum and Articles of Association;
7.1.6. Clearly defining what the Board requires from contractors in order to discharge its responsibilities, and monitoring performance in that context;
7.1.7. Acting as an ambassador for craftscotland Ltd including soliciting support craftscotland Ltd, finding and encouraging others outside who could support craftscotland Ltd, including Ministers, officials, potential donors and opinion formers;
7.1.8. Setting and overseeing the fundraising strategy and targets, including individual Board member’s support and help in seeking donations and promoting events;
8. Board meetings
8.1. Directors will meet at least 4 times per annum, including an annual review of performance and strategy. Directorship of the Company will be reviewed if Directors fail to attend more than half the meetings in any one year. Directors should be willing to serve on ad hoc sub-committees and as office bearers.
9. Remuneration
9.1. This is an unpaid position. Directors should not receive any salary, fee or other form of remuneration for their services to the Company. However, reimbursement of reasonable out-of-pocket expenses at agreed rates will be given. Reasonable expenses include travel and subsistence, hospitality and childcare expenses incurred on craftscotland Ltd business.