We hold a unique position as a public body sitting outside Government, and a statutory corporation operating on a commercial basis. There is no single set of standards governing our corporate governance; instead we seek to apply the standards that are most appropriate to the various elements of our business in pursuit of applying best practice.
We have put in place a corporate framework document setting out the basis on which we operate and the formal structure for decision-making.
The UK Corporate Governance Code issued by the Financial Reporting Council is widely acknowledged as representing best practice in governance. Although The Crown Estate is not obliged to comply with the requirements of the Code, its Board nevertheless supports the principles and provisions set out in the Code; and in so far as the code provisions are applicable to the circumstances of the organisation, we seek to comply with the code where this is appropriate. Many areas of The Crown Estate's governance, however, are governed by the Crown Estate Act 1961, HM Treasury guidance or other government guidance where relevant/appropriate.
The duties of the Commissioners are to maintain The Crown Estate as an estate in land (with such cash or investments as may be required for the discharge of their functions) and to maintain and enhance its value and the return obtained from it, but with due regard to the requirements of good management. Under the Civil List Act 1952 the net income from The Crown Estate, after defraying costs of collection and management, is required to be paid into the Treasury and made part of the Consolidated Fund (general government revenues). The Commissioners have authority to do on behalf of the Crown in relation to The Crown Estate all such acts as belong to the Crown's right of ownership, subject only to the detailed restrictions set out in the Act. The Board must comply with such directions, as to the discharge of their functions under the Act, as may be given to them by the Chancellor of the Exchequer. The Commissioners submit annually to the Treasury a forecast of their activities in a corporate plan covering the following and two ensuing years.
The Crown Estate is constituted as a statutory corporation under the Crown Estate Act 1961. It is a body established in perpetuity under the Act as a trust estate. Independent of government and the monarch, The Crown Estate's public function is to: invest in and manage certain property assets belonging to the monarch; and remit its revenue surplus each year to the Exchequer.
It was in 1760 that the Sovereign first surrendered the surplus revenue (but not the ownership) of what is now The Crown Estate in England and Wales to Parliament, in exchange for income from the Government under the Civil List. Crown lands in Scotland were included in this arrangement from 1832. The arrangement has been renewed ever since by subsequent monarchs at the start of every reign. The assets of The Crown Estate are therefore not the property of the Government, nor are they the Sovereign's private estate. They are part of the hereditary possessions of the Sovereign "in right of the Crown".
The Crown Estate observes the Nolan principles of public life, that is, it is committed to honesty, fairness, integrity, openness and transparency. Although it is not an instrument of government policy, it is a public body. As such, The Crown Estate follows the standards in Managing Public Money.
The Treasury is The Crown Estate's sponsor department. The Exchequer Secretary to the Treasury is its sponsoring minister who answers for its affairs in parliament when the need arises. The Crown Estate's usual working level contacts are the Treasury Officer of Accounts team.
The Crown Estate's Accounting Officer is its Chief Executive. The Chief Executive is bound by the requirements of chapter 3 of Managing Public Money, with personal responsibility for leading the organisation in an ethical manner, seeking good value for money and securing the quality and integrity of its business. Should a conflict arise between a decision of the board and the Chief Executive's personal view of their duties as Accounting Officer, they should seek guidance from the Treasury Permanent Secretary, from whom, in extremis, they may seek a direction. A direction in this instance would be given under section 3 of Managing Public Money as distinct from a direction given under the Crown Estate Act.
The Treasury may exercise a statutory power of direction over The Crown Estate's business, acting with or without each other as circumstances demand. A direction may be given only within The Crown Estate's statutory duties. If a direction is under consideration, the Treasury will discuss the matter with The Crown Estate to see whether a jointly agreed course can instead be reached informally. Such discussions may result in written understandings about how The Crown Estate will conduct its business.
In the nature of its business The Crown Estate also has dealings with a number of other Whitehall departments, as if it were an independent commercial organisation. However as a public body it always seeks to work with the grain of prevailing government policy. In a number of instances, framework documents are agreed with the departments or public bodies with which it has regular dealings in order to introduce clarity to the working relationships.