2 Trust Port Boards
2.1.1. In line with good commercial practice, a trust port board should comprise between 8 and 12 members appointed by an open and transparent process. Larger boards are unwieldy and their effectiveness tends to decline in proportion to the number of members. A move to independent board membership removes the need for a large and potentially ineffective board structure. Trust port boards should seek instead to achieve an effective balance of skills to meet operational and strategic needs as set out in these standards. It is perfectly feasible for any board to embrace all of its core skill requirements within 8-12 members.
2.1.2. In most cases the Chief Executive sits on the board as of right but in larger ports additional executive members may be appropriate. The scale of executive representation should be appropriate to the size of the port. In small to medium-sized ports it would probably be appropriate to confine executive representation to whichever senior manager is deemed to be the operational head of the port.
2.1.3. Whatever the representative structure, it is important that the harbour master should be able to maintain a direct line of contact with the board as he is immediately responsible for the safe and effective operation of the port facilities. It is equally important that the position of harbour master be held by someone with the appropriate experience and qualifications to personally fulfil that role.1 A harbour master's powers and duties should not be delegated except for certain specific matters as approved by the board or prescribed by legislation (providing that these do not impact on the overall responsibility for the conduct of a harbour master's duties which must remain with the appointee at all times).
2.1.4. The board and executive management are the joint focus for the accountability of the trust port in the conduct of the port's business. The executive management of a trust port has a vitally important role to play in operation of these standards of accountable governance. There has been a regular turnover of board membership since the original guidelines were implemented which has proved beneficial in the majority of ports. In many ways the chief executive or senior manager will become the guardian of this guidance, the legal and fiduciary duties and the powers of the authority and they should be in a position to lend support to the chairperson in ensuring that the board operates within them. The chief executive may, in effect be the referee of board activity, as well as acting as adviser and counsellor to the board on its conduct, duties and responsibilities. In small harbours where the senior executive may be the harbourmaster or administrator this role may need to be adapted to suit the circumstances.
2.2.1. A trust port, in common with any commercial undertaking, requires effective strategic direction based on a complete understanding of the direction being taken and its associated opportunities and risks. Prudent financial management is central to the duties to be discharged by every trust port board member and officer. The principal role of its chairperson is to ensure that the board works effectively in directing the affairs of the port and has a clear understanding of its role and responsibilities. The chairperson has a key role to play by leading the board in giving the port this direction. Given the key role of chairperson, they should be appointed by the full board. Subject to the provisions in section 2.4 below about length of term, such appointment should not be dictated by rotation. It should be made on the basis of qualifications and experience.
2.2.2. The ultimate effectiveness of the trust port is dependent to a substantial extent on the quality of the information it receives. The chairperson should ensure that the executive regularly provides the board with a clear picture of financial and business performance against the plans previously agreed by the board. The chairperson should also ensure that the executive provides the board, on a regular basis, with clear and comprehensive reports on specific projects. The chairperson is responsible for regularly reviewing the quality of information thus provided to the board. The chairperson is also responsible for ensuring that papers are circulated and meetings notified in good time to all board members.
2.2.3. The chairperson should manage the board and ensure that it and its officials stand above sectional interests and act as true independents. The chairperson should have the ability to take an overview of board discussion and summarise it with an intelligent commentary, including his or her own personal views.
2.2.4. Both the board and the chief executive have the capacity and responsibility to direct the affairs of the trust port in accordance with the criteria of prudent management. However, it is very important that there be a positive demarcation between their roles. The primary concern of all involved is the welfare of the port and all its stakeholders. However, it is for the board to give strategic direction to the port and to provide management with the challenge that ensures maintenance of a cost effective and accountable service. It is for the executive to use their professional skills to achieve board objectives through day to day control of port operations.
2.2.5. These functions should not overlap, although it is accepted that in very small harbour operations this may on occasion occur. The board should be in a position to take an independent and detached view of management and its performance. The board should not seek to interfere directly in the day to day management of the port. They should collectively ensure that officers have clear strategic direction and reporting lines so that they can effectively manage the port. Clear separation of board and executive functions provides valuable checks and balances against undue (potentially unaccountable) concentration of power within the trust port. The executive should not seek to exercise a strategic policy making function in launching on any significant course of action or incurring significant expenditure (outside of normal delegations) without prior approval of the board.
2.2.6. Although the board should not interfere in the daily operation of the port, members should understand how their decisions affect the running of the port and the wider economy. It falls to the board to satisfy both the legitimate needs of customers and the legitimate wider interests of all stakeholders.
2.2.7. It should be clearly understood that the officers and employees of a trust port are the servants of the board collectively, not of individual board members. The executive is only answerable to the board, collectively, for the conduct of port business. Members acting individually should not attempt to involve themselves in operational matters unless specifically requested by the board or the executive. These areas are the prerogative of the board in full session. Individual board members may bring their concerns to the attention of the executive and provide them with advice. They should not attempt to direct or influence the actions of the executive or employees in day-to-day management of the port, its relationships with all stakeholders or the interpretation of the statutory and legislative framework within which it operates (including its own byelaws) without prior authorisation of the board. Any attempt by individual members to influence the actions of the board's servants in this manner should be reported to the chairperson and/or board by the chief executive. The board should, if merited, issue a formal warning to the board member concerned. Further instances should result in termination of the member's appointment.
2.2.8. Irrespective of size it is essential that the boards meet regularly. Unless there are truly exceptional circumstances all trust port boards should convene at least 4 times a year. This is the minimum required to ensure effective governance of the port and transaction of its business. Every effort should be made to ensure that board meetings are held at a time convenient to all members. The special needs of those in full time employment, with family commitments or with disabilities should be taken into account in setting the time and venue. Board members' concerns should be recorded in the minutes as a matter of course.
2.2.9. In trust ports of all complexions there can be a valuable role for sub-committees of board members to provide continuity between board meetings, to resolve specific issues and manage specific projects. Such committees should be adequately resourced to carry out the functions asked of them by the board. However, these committees should be subservient to the board. They should not be empowered to make decisions, direct the executive or transact business on the board's behalf. This is the prerogative of the full board. To do so undermines the basic principles of accountability and impartiality of the board structure. Standing committees should be restricted to audit and remuneration.
2.2.10. The number of board meetings, the attendance record of board members, and the membership and function of all board committees should be clearly set out in the port's annual report and/or strategy document.
2.3 Guiding Principles - Appointment
2.3.1. This chapter of the guidance is intended to set out a basic set of standards around which individual trust ports may build an appointment process tailored to their specific requirements. The basic tenets of the appointment process are set out here, and are based on existing good practice in both public and private sector. It should be noted that Scottish Ministers no longer have a role in any port board appointments since the larger ports have all now modernised their constitutions.
2.3.2. The objective is to obtain a board that is independent and fit for purpose rather than representative of particular interests. The intention is to open up the process to allow trust ports to range wider to locate the expertise that they need to function effectively. All trust ports should work to phase out any remaining reserved appointments from their constitution. Even where existing reserved appointments (eg where the local authority appoints) are conducted according to these principles, trust ports should look to go one step further and create entirely open competition for board membership.
2.3.3. The following basic process should be adopted to provide a simplified, consistent, open and accountable system for board appointment:
- All vacancies should be filled against job descriptions to ensure the correct balance of skills and competencies across the board. Core skills, characteristics and experience required by a board member are outlined in these standards, and should be made clear to potential candidates. .
- All vacancies should be advertised using appropriate local or regional media. All applications and nominations should be sifted by the intended interview panel and a short list for interview put to the board.
- The criteria by which a selection panel will judge the candidates for the post must be made clear to applicants in advance. The selection panel must adopt selection procedures that accurately measure candidates against those criteria, and must be in a position to provide evidence to support its eventual decision. All candidates should be offered the chance to receive feedback on their performance in the application process.
- The selection panel should comprise the chairperson or deputy chairperson, a stakeholder representative and an independent. It would be acceptable for the chief executive to advise this group. The independent member might be provided by the local authority from among its officers (Human Resources Director or equivalent), or from some other locally accredited and recognised independent source to be determined by the board.
- All unsuccessful candidates should remain confidential and the papers should be destroyed or returned to the applicants
Annex A contains a summary of the principles of appointment and the aims of the process adapted from the Code of Practice for Public Appointments in Scotland Published in April 2011 by the Commission for Ethical Standards in Public Life
Annex D contains examples of an application form, notes for applicants and advertisement which can be customised.
2.4 Length of Term
2.4.1. All trust port board appointments except executive members (who should serve for their term of office) should be of three years duration. Any less than three years inevitably hampers consistency and stability within the board, and a regular turnover of board appointments may result in the loss of valuable 'corporate memory'.
2.4.2. Subject to continued eligibility, each board member may be appointed for a maximum of three consecutive terms (i.e. reappointed twice), although reappointment for the third term should be only in exceptional circumstances. In smaller trusts where the pool of suitable candidates may be geographically limited the board should consider wider advertising to attract new candidates and ensure fresh ideas and experience are brought onto the board. In exceptional circumstances consideration may be given to allowing a break in service of one or two terms with the possibility of reappointment after this gap, however boards should consider other options to attract new members before resorting to more numerous reappointments which could defeat the aims of refreshing the membership in the longer term. Sharing of good practice between boards has proved helpful to smaller trusts in attracting suitable candidates. Where any trust wishes to make a robust case for any flexibility due to specific local circumstances Transport Scotland are prepared to discuss their needs on an individual basis when changes to the constitution are proposed.
2.4.3 Reappointment should never be automatic. No board member should be reappointed for a second or third term unless the chairperson is satisfied that the board consider not only that the member in question has performed satisfactorily during the current term of office and has a good attendance record, but also that a new appointee would be unlikely to offer greater value to the board. This test must be emphatically passed in the exceptional event of a board member being reappointed for a third term. In such an event the board may also have the option to consider the incumbent against a wider selection of candidates through a more formal selection process. Each trust must have regard to the specific provisions in its constitution relating to appointments.
2.4.4. The Chairperson, appointed by the board, should normally have served at least one term as a board member. They should be appointed for a three year term, even if mid-way through a term as board member. The chairperson should be subject to an absolute maximum of 12 years service on the board in whatever capacity.
2.4.5. All boards should seek to avoid a situation whereby all board appointments have a common term and end date. Synchronised roll over is disruptive to the overall effective management and business of the port.
Termination of Appointment
2.4.6. Specific breaches of the standards contained in this guidance and any activities deemed inappropriate to the interests of the trust port, including those likely to bring the port into disrepute (including moral turpitude), or plainly outside the trust port's legislative or statutory framework, should result in termination of that member's appointment.2
2.4.7. In addition, a board member, including the chairperson, should cease to hold office if a majority of the board requests his or her resignation in writing, and supports this with a resolution, passed at a full board meeting, that the board member has vacated office. The board may wish to consider making public the reasons for its actions (within the constraints imposed by civil and criminal law including data protection).
2.4.8. Boards may also consider whether, in the interest of natural justice, they should institute an independent appeals mechanism for members whose appointments have been terminated. Whatever the route taken it should be clearly seen to offer an open, accountable and impartial forum of final recourse for consideration of the board's decision.
2.5 Guiding Principles - Membership
2.5.1. All board members should adhere to the following guiding principles in the conduct of trust port business. Board members must fully understand their duties and responsibilities. Individual boards might consider adapting these to publish their own Code of Practice, possibly in the context of the annual report and/or their published strategy document.
Eight Guiding Principles of Trust Board Membership, adapted from seven principles of public life as defined in the Nolan Committee's First Report on Standards in Public Life.
A trust port is an independent statutory body. All board members are appointed to act independently in the best interests of the trust port and all of its stakeholders both present and future.
Board members are accountable for their decisions and actions to all stakeholders of the trust port, and should submit themselves to whatever scrutiny is appropriate to their office.
Board members should be as open as possible with all with all stakeholders about the decisions and actions they take. They should publicise the reasons for their decisions and restrict information only to the extent that matters of commercial or personal (personnel) confidentiality are involved.
Board members should take decisions solely in terms of the interest of stakeholders of the trust port, They should not do so in order to gain financial or other material benefits for themselves, their family and friends or any group or organisation with whom they are associated.
Board members should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.
In carrying out trust port business, including making appointments, awarding contracts, or recommending individuals for rewards and benefits, board members should make choices on merit.
Board members have a duty to declare any private interests which might influence their trust port duties, and to take steps to resolve any conflict arising, in a way that protects the interests of stakeholders of the trust port.
Board members should promote and support these principles (and ensure that they are adopted by fellow board members) by leadership and through example.
2.5.2. Boards have a duty to ensure that new appointees are provided with clear information on all aspects of their duties as a trustee of the port. As a minimum all board members should be provided with a copy of these standards and the port constitution on appointment and be required to sign a binding declaration on joining.
2.6 Board Skills and Diversity
2.6.1. Trust port boards should contain an appropriate balance of skills, competencies and experience to control the port effectively and provide it with leadership, motivation and strategic direction. These will be a mix of professional and personal. Entrepreneurial skills need to be balanced with a public service commitment. Experience and independence are of equal importance. The effective skills balance for each port will be different, depending on its circumstances and the environment within which it operates. However, common requirements are likely to include:
Drive, vision, independence, confidence
Challenging, proactive approach to board business
Ability to motivate and engender respect
Negotiating and communication
Impartiality and integrity
Interpersonal - the ability to develop good relations inside and outside the trust port
Ability to work as a team member/supportive of colleagues
Ability to make a constructive contribution to group discussion - clear expression of ideas
Analytic approach to problem solving
Ability to formulate strategy
Grasp of priorities
Relevant and current commercial expertise
Relevant current maritime expertise
Health and Safety
Public relations/community issues
Leisure, boating management, voluntary, and commercial sectors
Environmental experience and expertise
Oil and gas and decommissioning
2.6.2. In assessing potential board members against the above criteria, relevant life experience and track record should be considered as important as skills obtained through a conventional career path and professional qualifications.
2.6.3. Trust port boards should contain a good balance and breadth of competencies. In recognition of the fact that trust ports are commercial entities, this should include, as a priority, adequate financial and commercial expertise. The board should use the annual report actively to demonstrate that they have achieved this balance.
2.6.4. Beyond individual specialties and skills, all board members need to foster a public service ethic. They need to display a genuine commitment to the welfare of the port and all its stakeholders. They should have understanding of, and a commitment to, the needs of the local and regional communities and economies which depend upon the effective operation of the port.
2.6.5. As with competencies, a trust port board will be most effective, and more representative of its stakeholders, if constituted by members with a broad and diverse range of backgrounds and perspectives. Trust ports should actively seek applications for board vacancies from a diverse range of people, and not be content solely to recruit candidates with similar backgrounds to existing board members. Trust port boards should also analyse their ways of working to identify any practices (such as the timing of meetings) which may inadvertently hinder the chances of recruiting from certain groups of people.
2.6.6. There is no age limit or minimum requirement on board membership. The overriding requirement is for the board to be optimally effective, and this is most likely to be achieved with a diverse range of members, in which age should not be a relevant factor, but in which a breadth and depth of skills and experience should be paramount. The port sector generally has traditionally been male dominated and boards should consider how they might attract increased participation from women.
2.6.7. Plans for achieving a balance, and success in implementation, should form part of the annual published strategy document if appropriate, and be detailed in any plan for meeting this guidance.
2.7.1. There is little difference between the duties of a trust port board member and those of the members of a private company port's board. Company port boards are accountable to their shareholders, the trust ports to their stakeholders. Both have a clear and unambiguous duty to these groups and are accountable to the general public for the way in which they exercise the statutory powers and duties devolved onto them by Parliament.
2.7.2. In general terms, board members should:
|act independently and in good faith in the best interests of the trust port and all its stakeholders (Commissioners Clauses Act 1847)
||ensure that they receive adequate training for the discharge of their responsibilities
|ensure that all their actions and the operation of the port are undertaken within the statutory framework. They must not knowingly allow the port to breach or fail to discharge legal or fiduciary obligations
||acquire a proper understanding of the business including - delegated authorities, the strategic plan, budget, structure and relationships, financial controls and systems, customers, competition and markets (eg rights and responsibilities)
|have a duty of care to the trust port and its current and future stakeholders
||always respond appropriately to complaints from stakeholders
|forge strong working relationships with other members of the board and executive
||ensure that the executive is managing the port honestly, efficiently, effectively and acting within its powers
|attend all board meetings unless, exceptionally, excused by the chairperson
||be prepared to submit a paper to the board on their views
|send a letter explaining their views on major issues if they cannot attend
||read the board papers and ensure that all their decisions are properly informed
|declare any outside interests, hospitality, gifts etc, which might conceivably be seen to be in conflict with the duties and responsibilities of an impartial, independent board member
||be honest in their dealings with no hidden agenda and respect the confidentiality of information obtained as a board member, and of board discussions
|ensure they have all of the information they need to fulfil their obligations to the trust port
||be team players sharing knowledge and views with fellow board members and abiding by the view of the majority
|participate in the appointment of the executive
||place their skills at the disposal of the port and its executive
|actively participate in board discussions - be testing - be prepared to be challenging and to act independently (in a constructive manner)
||declare an interest in any board discussion at the outset but be prepared to contribute factually to the debate
2.7.3. In general terms, board members should not:
|represent specific interests when acting as a board member
||ignore or unreasonably oppose the views of the majority
|use information obtained as a board member for personal gain, the gain of any third party, or misuse it in any other way
||allow membership of any other organisation, club or society to influence his/her decisions or actions as a board member
|allow the executive to exercise undue control over the port and board
||become complacent or stagnant
|cast a vote or attempt to influence or persuade the board on any item in which they have an interest
||enter into contracts or other arrangements for personal gain with the port (Commissioners Clauses Act 1847)
|attempt to influence the decisions or direct the activities of the trust port servants without recourse to the board
||interfere or participate in operational matters unless specifically requested by the chairperson and executive.
2.7.4. In addition to his or her role as an active board member, outlined above, in general terms a chairperson should:
|Provide effective leadership for the port
||manage the board process effectively
|form a strong partnership with the executive to ensure effective governance of the port
||act as an ambassador for the port, representing the views of the board to the stakeholders of the trust port and public
|ensure that new board members receive appropriate training
||forge an effective working relationship with the executive
|maintain a close interest in the operation of the port
||ensure that the board meets at appropriate intervals
|assess performance of individual board members with the chief executive
||discipline (including sacking where permissible) board members if required
|ensure that the port is compliant with all legislative and other Government requirements
||ensure that the port complies with this guidance and where compliance is not achieved explain why
|ensure that the board has the capacity and information required to take a balanced view on every matter
||ensure the probity and timely publication of the report, accounts and strategy document, and effective corporate plan
|ensure that every member of the board maintains a complete grasp of his or her responsibilities to the trust port, statutory duties and legal obligations
||ensure that the board maintains an appropriate skills mix through successive appointment rounds
|ensure the board does not exceed its powers or functions
||promote the active participation of all board members in debate
2.7.5. In general terms a chairperson should not:
|intervene in operational matters or establish alternative lines of command within the port's hierarchy
||set up "chairperson's committees" which transact port business without recourse to the board
|prevent board members (subject to the provisions of the Data Protection Act) from seeing, on request, any document relating to the business of the port
2.7.6. All of the above principles also hold good for the executive management of a port. The executive provides the operational interface between stakeholders and the port or conservancy. The executive is responsible for the effective transaction of the trust port's business. In addition and specifically, the chief executive should:
|act as custodian and guardian of the basic principles and aims of the trust port (and this guidance)
||conduct themselves with integrity, impartiality and honesty in relations with the board and public
|be accountable to the board (the board to decide on strategy and direction, the executive to implement) in terms of actions that are within their power…
||provide the board with clear financial and operational reports, allowing decisions to be based on accurate and balanced information
|…but able to act independently of the board, in the interests of the trust port, if the board's directions exceed their powers.
||forge strong working relationships with the board and act as the link between the board and Scottish ministers
|be responsible for ensuring that the board and port operate within the statutory framework and procedures
||ensure that a port's statutory and legislative framework is fully fit for purpose
|discharge public and statutory functions reasonably and according to law
||provide the board with strategic advice to inform their decision making
|oversee the appointment and electoral processes of the board
||be bound by the same code of standards as applies to the board
2.7.7. The chief executive should not:
|allow the port to breach or fail to fulfil its legal obligations
||allow vested interest, or any other improper conduct to flourish unchecked among board members
|allow any board members to dictate or manipulate the presentation of plans, reports and accounts or otherwise improperly interfere with, or compromise the exercise of, the statutory duties of the trust port both as a port and as a commercial organisation
||become complacent and stagnant
2.7.8. In the case of the board, chairperson and executive, serious and/or continued activities contrary to these basic guidelines should be considered adequate grounds for formal warnings and/or termination depending on the gravity of individual non-compliance and the potential impact of this on the accountable operation of the trust port.
2.8 Performance Management and Board Remuneration
2.8.1. The performance and contribution of the individual board members should be monitored on a regular basis by the chairperson, deputy chairperson and chief executive. As with the general performance of the port, the performance management of board members should constitute a cycle of assessment and appraisal, followed by new target setting, and the subsequent reporting of progress. Board members should expect an annual appraisal of their performance by the chairperson.
2.8.2. The performance of individual board members can obviously be appraised in part through looking at the general performance of the port, and the resultant benefits to stakeholders. The annual appraisal should also seek to evaluate the board member's individual contribution to the life of the port and the working of the board, as well as factors such as attendance. This evaluation should take place against objectives agreed with the board member at the beginning of the year.
2.8.3. The board should appraise the performance of the chief executive, the chairperson and deputy chairperson on a similar basis. As a general rule the board should be responsible for appointment of the chairperson and deputy chairperson from amongst its members with regard to previous performance.
2.8.4. The administration of remuneration policy should be the preserve of a remuneration committee of the board, where appropriate, which should comprise two or three members and should make available its terms of reference. It should have delegated responsibility to set the remuneration levels of board members and the chairperson. The remuneration committee should also recommend and monitor the remuneration of the senior executives.
2.8.5. The remuneration committee should, as part of its duties, consider the compensation commitments that would be entailed in the event of early termination of appointments, and where remuneration consultants are appointed, a statement should be made detailing any links that they may have with the port.
2.8.6. It is acknowledged that in many smaller trust ports, board members are not remunerated, due to the financial position of the port or as a matter of board policy.
2.8.7. At any stage through the year, but particularly during formal appraisal process, if an assessment is made that a board member is not felt to have made an effective contribution to the trust port, through both regular attendance and input to the work of the trust port, he or she should receive a formal written warning setting out the chairperson's views. Specific further targets to achieve should be set on the understanding that a lack of improvement within an agreed time scale will result in termination of his or her appointment, either through resignation or a vote of no confidence from the board. The chairperson, deputy chairperson and chief executive should be prepared to work with these members to offer encouragement and support.
2.9 Probity and Interests
2.9.1. Prudent management requires that every trust port should be subject to the direction and management of a board that is fit for purpose. Individual board members should also be 'fit and proper' persons. Suitability can be determined with regard to an individual's competence, probity, soundness of judgement, personal reputation and character, and diligence. It can also be determined by whether membership of an individual would or does pose a threat to the interest of the whole including all the stakeholders. Suitability is for the board to consider before an appointment is made, and for the chairperson and executive to consider on a continuing basis and certainly before reappointment is recommended.
2.9.2. As a general rule, any board member who has previously been dismissed from any trust port board should not be considered for appointment. Neither should any applicant who is bankrupt or has a criminal conviction remaining unspent. An appointee should not be a current or recent member of another trust, company or local authority port board, where the other port might be viewed as a direct or indirect competitor of the appointing body.
2.9.3. All candidates short listed for board appointment should be asked to complete a screening questionnaire disclosing their interests and answering other questions about their fitness to serve.
2.9.4. One of the commonest complaints levelled at members of trust port boards and their executives by members of the public is that they are not acting in an independent and impartial manner. Candidates who declare a potential conflict of interest should not be automatically debarred. However, should they be short listed, they should be able to demonstrate an ability to act in an independent manner in the interest of the trust port to the satisfaction of the selection panel. Appropriate questions would need to be asked to determine whether there us a genuine conflict of interest and whether it would hamper an individual's compliance with the requirements of board membership and the national standards.
2.9.5. In accord with Government best practice, all trust ports should maintain a register of interests for its board. The information provided by appointees in their screening questionnaire should form the basis of their entry. This should be freely open to inspection by the public on request. It is the responsibility of the chairperson, chief executive and individual members to ensure that it is kept up to date. In addition all trust ports should, through the chairperson and chief executive provide members with guidance and help them to identify and register what may constitute a conflict of interest and what action would be appropriate to resolve it.
2.9.6. Registers of interest should include:
- pecuniary and non-pecuniary interests of members, their close family and associates which relate closely to the port's activities ; and
- hospitality or gifts that could not be considered insignificant accepted by the board member or close family associated with the port and its operations.
2.9.7. Key elements of the register should be published in the annual report. Failure to disclose an interest otherwise discovered should be a matter for formal censure by the board, supported by a written warning from the chairperson or chief executive in the first instance. Further lapses (depending on seriousness) should be considered as grounds for termination.
2.9.8. In the course of board business it is possible that a member's declared interest may present a conflict with the matter under discussion. In these circumstances, board members must declare such conflicts of interest either before or at the board meeting in advance of any discussion of the item concerned, and must offer to withdraw. The chairperson, in consultation with the board, should decide whether or not a conflict does arise, and if it does, should ask the member to withdraw from the meeting for the duration of the item, or invite them to stay if they can contribute on a factual basis only. The fact that a member has declared an interest and the way in which this is handled should be recorded in the minutes.
2.9.9. The principles relating to conflict of interest should not apply to exclude the members of any consultative or advisory committee created or routinely consulted by the board.
2.9.10. As with declaration in the register, if it is subsequently discovered that a participating member failed to declare a relevant interest in the course of conducting board business, the chairperson should consult the chief executive to decide what action is merited in the interests of accountability and probity. Such action should, at the very least, result in a formal censure by the board. Further lapses (depending on seriousness) should be considered as grounds for termination.
2.10 Personal Liability
2.10.1. Trust port board members have a duty of care to the trust they are appointed to oversee. Incorporation by a trust port of Section 60 of the Commissioners Clauses Act 1847 into its local legislation means that Board members cannot be sued or prosecuted for lawfully exercising their powers as a member. In addition a member's property shall not be subject to legal process because of a contract entered into as a member or because of any lawful act in exercise of members' powers.
2.10.2. Section 60 also provides that members shall be indemnified out of funds held by the board for all payments made or liability incurred, and all losses/costs/damages which they may suffer, in respect of acts done in exercise of members' powers.
2.10.3. All boards should adopt the provisions of the Commissioners' Clauses Act into their local Act in the interests of good governance.
2.10.4. Boards may wish to consider ensuring that they have appropriate modern wording for the indemnity provisions in their local legislation. The wording used in Section 60 is not ideal as it does not make explicit that the indemnity applied only in respect of acts done lawfully in the exercise of the relevant powers. However if a change is required to the port's local legislation, a Harbour Revision Order would be needed.
2.10.5. Boards should have access to professional advice at the port's expense where they judge it necessary to discharge their responsibilities.
2.11.1 In order to achieve the goals set by these standards it is essential that board members receive training to enable them to undertake their role effectively. Many trust ports have very limited resources and Scottish Ministers will seek to facilitate training in co-ordination with port industry bodies where possible.
2.11.2 Based on the experience of the years since Modernising Trust Ports was first produced Scottish Ministers will consider how the training is best delivered but it may include
- On-the-job training at port level. This will ensure all board members are familiar with board procedures, port operations, and current strategies. This functional training could be tailored to meet the needs of individual board members (taking their existing experience and skills into account) and must reflect the circumstances of individual ports; and
- Facilitated groups on the impact of this revised guidance to deliver clear messages on the conduct of boards and the wider issues of ports policy (set in the context of transport policy), board members' statutory duties, their responsibilities under this guidance and the Port Marine Safety Code.
2.12 Succession Planning
2.12.1 In order to provide reasonable continuity and ensure that a chairperson has an effective grasp of trust port affairs, appointees should normally have served at least one term as a board member of the port. In line with the Government's Nolan doctrine, no chairperson should serve more than 9 years in that office. Boards should take a considered approach to succession. Boards should avoid a situation where the chairperson and chief executive both change within a comparatively short period. Likewise they should attempt to avoid a concentrated roll-over of key officers in the trust port.
2.12.2 The board should clearly identify and groom a successor to the post of chairperson in good time. The chairperson should ensure that the board has an established approach to board and management succession which is kept updated in the light of changing circumstances. There should always be at least one member of the board capable of stepping into the chairperson's shoes at short notice. The chairperson should plan ahead to ensure that the balance of skills on the board remains fit for purpose. The chairperson is responsible for ensuring that essential skills are effectively refreshed and replaced through the appointment process. The chairperson is also responsible for ensuring that existing skills are supplemented in good time by any additional skills the port will require to support its operations in the medium term.