Terms of Reference
Main Board
Powers, Duties and Responsibilities
The powers, duties and responsibilities of the board are prescribed in The Crown Estate Act 1961, which sets out the overall responsibility for maintaining and enhancing the value of The Crown Estate and the return obtained from it, but with due regard to the requirements of good management.
In this context the board will agree the objectives and broad policies of The Crown Estate and will provide the overall strategic direction that is necessary to ensure that these policies are carried out. It will exercise stewardship of The Crown Estate’s resources in a manner that enables the objectives to be met. The main functions of the board in carrying out its rôle are as follows:
- agreeing objectives, policies and strategies, and monitoring the performance of the executive management
- agreeing and setting the overall strategic direction of the business for implementation through the management board
- keeping under review the general progress and long-term development of The Crown Estate in the light of the political, economic and social environments in which it operates
- controlling and monitoring the financial state and performance of The Crown Estate (including investment and financial plans), approving the objectives of The Crown Estate and its corporate plan
- approving major expenditure and transactions including, for example, acquisitions, disposals and joint ventures
- ensuring that The Crown Estate pursues sound and proper policies in relation to:
- risk management
- health & safety
- internal and external audit
- internal control
- investment strategy
- information systems
- corporate responsibility
- public relations and communications
- accounting
- human resources
- delegating clear responsibility and authority to the Chairman, executive committees, the Chief Executive, board members or groups of board members, directors, heads of department and others
- giving approval or support, as appropriate, to the most senior appointments / dismissals and ensuring that adequate career development, succession and remuneration arrangements exist.
While responsible to Her Majesty the Queen and the Treasury, the board will have regard to the interests of The Crown Estate as a whole, including its employees in general, its tenants, and its suppliers, and to The Crown Estate’s social responsibilities to the communities where its operations have an impact.
Board Meetings
The board will meet not less than seven times a year. An agenda and related papers will be circulated to board members at least five days prior to a meeting.
A quorum will be four board members including either the Chairman or Chief Executive.
The secretary of the board will be the Corporate Operations Director. The Investment & Asset Management Director, Legal Adviser, Finance & IS Director, Rural Estate Director, Marine Estate Director, will attend main board meetings. Heads of portfolio / department and other advisers will be required to attend the board as necessary.
Urgent Business
In exceptional circumstances only, if urgent business arises between regular meetings, the following may exercise the powers of the board on any matter which in their judgment is of sufficient urgency to require a decision:
- the Chairman and the Chief Executive, failing whom
- the Chairman and two other board members
- the Chairman of the audit committee and two other board members
- the Chief Executive and two other board members.
A decision may also be obtained through the circulation of proposals to board members ‘out of committee’.
All decisions taken will be presented for ratification at the next board meeting.
Matters Reserved to the Board
The following matters are reserved for the board’s consideration and decision:
- annual report and accounts
- annual budget and corporate plan
- annual report of audit committee
- capital expenditure or disposals exceeding £20m (either individually or as a collective package) in value or cost
- capital transactions over £10m (either individually or as a collective package) for rural and marine
- development / construction contracts exceeding £20m
- investment strategy
- strategic decisions which are significant
- anything which is likely to generate significant publicity and affect the image or reputation of The Crown Estate
- the granting of, or variation to, authority levels for executive committees and the chief executive
- anything which is likely to have a serious impact upon The Crown Estate’s financial stability
- any proposal for substantial litigation or involvement in any serious criminal case.
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Management Board
Constitution, Authority, Membership, Quorum and Frequency
The management board is appointed by and reports to the main board.
The management board is responsible for implementing the strategic direction as set by the main board and is required to take ownership of the corporate areas as defined by the balanced scorecard. It sets, owns, monitors and drives forward the corporate agenda, adding value to the business through greater strategic oversight, enhanced accountability and coherent purpose.
The committee is an executive committee of the main board.
The management board operates within the delegated financial limits available to the Chief Executive (decisions within the delegated authority of the Investment and Asset Management Director, other directors, or heads of portfolio / department will not be taken by the management board unless the requirements or sensitivities are such as to justify referral to the management board).
The members of the management board will be drawn from the directors and heads of department as appointed by the Chief Executive.
The secretary of the management board will be a corporate support executive.
A quorum will be four members including the Chief Executive or Corporate Operations Director.
The board will meet on a fortnightly basis, unless exceptional circumstances should dictate otherwise. Meetings will generally alternate between ‘general business’ meetings and more broad ranging discussions of strategic issues facing the business.
When meeting to consider investment strategy the board will be joined by the Senior Investment Manager and such other external advisers as may be appropriate.
Duties
- The management board will proactively lead the business by:
- implementing the business direction set by the main board
- setting the operational strategy and driving the balanced scorecard objectives forward across:
- finance
- business
- people
- customers
- reputation
- reviewing the investment strategy to reflect performance, research and market changes and seeking main board approval as necessary
- ensuring delivery against strategic business objectives (and, as part of these, the achievement of Treasury targets)
- enabling and supporting the business to meet agreed high-level objectives and remaining aware of, and taking responsibility for, progress against these
- owning and setting operational strategy – whether for finance; investment; HR; IS etc. – including that relating to major organisational change
- controlling costs and considering the major finance and resource implications required to meet business objectives (including approval of the corporate budget)
- ensuring the resourcing and delivery of business plans including corporate responsibility targets
- liaising with the main board as appropriate throughout the year, with respect to issues of overarching corporate governance of The Crown Estate
- having oversight of organisational structure and effectiveness in terms of internal and outsourcing policies
- considering, and approving as appropriate, proposals for high-level projects not agreed as part of the normal business planning process and papers affecting business reserved for the management board’s attention.
The management board will receive the following for consideration and / or approval:
- papers relating to the setting of the corporate budget
- business and corporate plans
- papers relating to major corporate projects within the Chief Executive’s delegation or where the project monitoring committee draws the management board’s attention to a significant risk or impact on the business as a result of delays or increasing expenditure
- business cases for making large-scale changes to IS infrastructure
- recommendations for any alteration to the business planning cycle.
The management board will receive the following to note:
- on an annual basis, a summary of the overall performance of principal outsourced contractors, and on an ad hoc basis, updates on exceptional contracting-out tendering exercises, including the appointment and / or removal of professional advisers where it is perceived that there is a large degree of reputational risk present
- on an annual basis, an update on corporate risk and at (quarterly) intervals an update on risk issues owned by the management board.
In relation to investment matters the board will:
- conduct a review of investment strategy and objectives on a quarterly basis (through a dedicated meeting) and submit any strategy changes to the main board for approval
- monitor performance of The Crown Estate and portfolios against bespoke benchmarks
- monitor performance against revenue target
- consider the availability and allocation of capital funds, and review the capital forecasts provided by each department
- consider amendments to the investment guidelines.
Reporting
The chairman will report as necessary to the main board.
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Stock Selection Committee
Constitution, Authority, Membership, Quorum and Frequency of Meetings
The stock selection committee (SSC) is an executive committee to the extent that specific authority is delegated to the committee by the main board within The Crown Estate delegations of authority statement, solely in respect of property acquisitions, disposals and investments (lease re-jigs, developments etc.) up to £20m for any one urban case and £10m for rural or marine. The committee also appraises proposals of higher value before they are submitted to the main board.
The members of the stock selection committee are:
- The Chief Executive, as chairman
- Investment & Asset Management Director
- Finance & IS Director
- Urban Portfolio Managers (x4)
- Senior Investment Manager, as secretary
- sponsor of investment proposal.
Duties
The stock selection committee’s duties are:
- to consider investment and disinvestment proposals, reviewing them against strategy meetings to be held monthly or convened ad hoc as appropriate
- to evaluate and progress specific investment proposals as submitted by heads of portfolio
- to make decisions on investments or sales up to the £20m (urban) or £10m (rural / marine) delegated authority limits (except investments in non-income producing assets or for purposes of site assembly which should be referred to the main board)
- to make recommendations on investments or sales which exceed the delegated limits, for consideration by the main board
- to monitor major capital projects against approved plans (physical progress, qualitative achievement and financial terms)
- to ensure that all property investments exceeding the thresholds have been considered.
The quorum for the SSC will be three members and must include the Chief Executive or the Investment & Asset Management Director.
Meetings of the SSC will be held monthly or more frequently on an ad hoc basis to consider specific urgent investment decisions.
Agendas and minutes of the SSC meetings will be circulated to the full SSC membership.
Audit Committee
Constitution, Authority, Membership, Quorum and Frequency
The audit committee is appointed by and reports to the main board.
It has wide authority to investigate any activity or occurrence, to seek information from employees, contractors or consultants, and to call for documentary evidence of any transaction.
The committee is an executive committee of the main board.
The members of the committee will consist of three non-executive board members (one of whom will be chairman). The Chief Executive, the Investment & Asset Management Director, the Finance & Information Systems Director, and the Head of Internal Audit will attend all meetings.
The external audit partner (or NAO audit director) will be invited to attend scheduled meetings.
The secretary of the committee will be the Corporate Operations Director.
A quorum will be two non-executive board members.
Meetings will be held three times a year, to reflect the internal and external audit cycles. Additional meetings will be held if required.
Duties
- to have the key responsibility on behalf of the main board for risk management, internal control, internal and external audit
- to review draft and final year-end accounts
- to consider the external audit appointment and fee, and the nature and scope of the external audit
- to receive a report from the external auditor and consider the ‘management letter’ and executive management’s response
- to review the risk management process and the nature and extent of risks within the organisation
- to set appropriate policies for internal control to ensure that risk is effectively managed
- to receive an annual report of the Crown Estate Pension Scheme
- to annually review the scope, authority, resources of internal audit and the audit programme
- to receive regular reports on the effectiveness of internal control
- to review annual internal audit, internal control certification and other management reports to produce an assessment of internal control for the main board and the annual reports and accounts
- to consider retrospective investment appraisals (RIAs)
- to receive an annual report on health and safety management.
Reporting
The audit committee will make an annual report to the main board.
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Remuneration Committee
Constitution, Authority, Membership, Quorum and Frequency
The remuneration committee is appointed by and reports to the main board.
Its primary purpose is to ensure scrutiny and oversight of the reward packages for senior managers, ensuring that rewards are appropriate to recruiting and retaining the skills and experience necessary to take the business forward. The committee will also act to ensure that appropriate internal equity is applied.
The committee is an executive committee of the main board.
The members of the remuneration committee will comprise three non-executive board members, one of whom will act as chairman. The Chief Executive, the Finance and IS Director and the Corporate Operations Director will attend meetings but will absent themselves if matters relating to their individual reward packages are discussed.
The secretary to the committee will be the Head of HR.
A quorum will be the chairman plus one other member.
The committee will meet twice annually to consider base pay issues and performance awards. It will also hold ad hoc meetings to discuss any other particular issues arising or the establishment of new or revised reward mechanisms.
Duties
The remuneration committee will focus on principles governing senior management remuneration. It will:
- assist in the preservation of The Crown Estate’s reputation by retaining oversight of the process whereby senior management reward systems and packages are agreed
- hold accountability for fair and transparent remuneration of senior management at The Crown Estate
- ensure that senior management remuneration is sufficient to attract and retain the skills and experience necessary to take the business forward, subject to the delegated pay processes currently in place and, if necessary, the agreement of the Treasury
- express its view in relation to total compensation for the Chief Executive of The Crown Estate
- scrutinise, and hold The Crown Estate responsible for any procedures where appropriate remuneration for senior managers is formulated and agreed
- sign off proposed reward strategies for senior managers
- satisfy itself that sufficient and appropriate performance management arrangements are in place
- consider all performance-related proposals in respect of individuals as put forward by the Chief Executive.
- ensure that decisions are equitable and taken with due diligence.
Reporting
The committee will report to the main board.
Corporate Responsibility (CR) Committee
Constitution, Authority, Membership, Quorum and Frequency
The CR committee is appointed by and reports to the main board.
The committee’s prime purpose is to ensure that The Crown Estate has in place an established framework for improving the management of the corporate, environmental and social aspects of The Crown Estate, and that its reputation as a responsible and responsive landowner continues to be enhanced.
The committee is an executive committee. It is chaired by the Chief Executive who will direct CR operations with advice from the other members of the committee.
The committee operates within the delegated financial limits available to the Chief Executive.
The members of the committee will be:
- the Chief Executive as chairman,
- a non-executive board member nominated by the Board Chairman
- the Corporate Operations Director.
Members of the management board and the Head of Corporate Support will attend all meetings.
The secretary of the committee will be a corporate support executive.
A quorum will be two members including the Chief Executive.
Meetings of the committee are to be quarterly and at such other times as considered necessary.
Duties
The CR committee will:
- formulate policy and strategy for approval by the board
- ensure implementation of CR and environmental policies
- monitor progress against plans and budgets
- oversee the production of the annual CR report
- conduct management reviews as required within the environmental management system
- provide representation for The Crown Estate at selected external CR events.
Reporting
The chairman will report annually to the board or more frequently if key issues arise.
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Communications Committee – Terms of Reference
Constitution, Authority, Membership, Quorum and Frequency
The communications committee is appointed by and reports to the main board.
The committee is an executive committee to the extent that specific authority is delegated to the committee by the main board within The Crown Estate delegation of authority statement, primarily in respect of communications revenue transactions within the approved budget.
The members of the committee will consist of:
- the Chief Executive as chairman,
- the Head of Communications,
- the Corporate Operations Director.
The partner or director of any firm of public relations consultants currently engaged. The Chairman of the Board will attend on a quarterly basis.
The secretary of the committee will be the Head of Communications.
A quorum will be the Chief Executive or Chairman plus the Head of Communications.
Meetings of the committee will be held every month.
Duties
The communications committee will:
- consider questions of communications and PR policy
- review and recommend to the board an annual strategy statement and programme of communication activities
- receive an annual report from the Head of Communications
- determine the PR stance to be taken on any sensitive issue and maintain close control over such ongoing issues.
Reporting
The Head of Communications will report to the board annually.
Further Information
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