Transparency data

Board minutes: 25 June 2020

Published 14 October 2020

Minutes of the 33rd Board Meeting

Meeting held remotely

Thursday 25 June 2020

14:00 to 16:30

Board members present:	Others present:
George Jenkins (Chairman)	Andy Brittain (MOD Representative)
David Johnston	Colin Hill
Marta Phillips	Mike Wetherell
Mary Davies	Malcolm Botting
Peter Freeman	Colin Sharples (item 5)
Neil Swift	Jane McGovern (item 6)
David Galpin
Matthew Rees

1. Welcome, apologies, announcements and declarations of interest

1.1. The Chairman welcomed members to the 33rd meeting of the Board. There were no apologies or declarations of interest.

1.2. The Chairman announced that, in view of the situation regarding Covid-19, government guidance on this matter and in accordance with Standing Order 3.10, the Board meeting was being undertaken remotely by telephone for all Board members.

1.3. Board members were asked to declare any relevant interests. Neil Swift declared that he had an interest on the “Chief Executive’s contract of employment” item on the agenda, for which he would not be present. Mike Wetherell had an interest regarding the item in the Chief Executive’s Report on the Interim Director of Corporate Resources’ contract, for which he would not be present. All executive members and attendees other than the Chief Executive had an interest regarding the staff pay award, which Neil Swift would cover in his introduction to the Chief Executive’s Report.

2. Minutes of 32nd meeting of the Board, 28 May 2020, and action tracker

2.1. The Chairman introduced the minutes of the Board meeting held on 28 May 2020. There had been an action that a new risk should be added to the Corporate Risk Register: “A new environment following Covid-19 results in changes to the SSRO’s ways of working”. This action had been completed, with the new risk being discussed at the Audit Committee on 16 June 2020.

The minutes of the 32nd meeting of the Board were approved as a correct record.

3. Chief Executive’s Report

3.1. Neil Swift, Chief Executive, presented his report to the Board, which provided an update on items not included elsewhere on the agenda.

3.2. The report provided an overview of recent stakeholder engagement, which had included meetings with the Chief Executives and senior staff at Rolls Royce, Thales and ADS. The Director of Regulation and Economics had made good progress on discussions with the MOD regarding data utilisation, and the Director of Legal and Policy had led on discussions with the MOD relating to potential referrals.

3.3. On 17 June 2020 the SSRO had published a report following its reviews of contract profit rate steps and reporting requirements. The Chairman had indicated to the Minister for Defence Procurement that the SSRO was not finalising its recommendations to the Secretary of State’s review of legislation at this time, but would monitor developments in relation to the pandemic and the MOD and wider government reviews so that it could assess the timing and content of the SSRO’s recommendations to the Secretary of State.

3.4. Discussions about the implementation of recommendations from the Tailored Review had taken place with the MOD. The Board discussed the specific recommendation around the separation of the MOD’s policy and sponsor teams, and it was agreed that a briefing note should be provided to Andy Brittain in advance of his forthcoming meeting with DG Finance. Action: Neil Swift.

3.5. The Executive Committee had decided that the 1.5 per cent pay increase agreed by the Board for 2020/21 should apply to all staff, and a pay remit submission had been made to the MOD reflecting this. The non-executive Board members were responsible for agreeing the Chief Executive’s salary, and this would be discussed later on the agenda.

3.6. The Chief Executive had communicated to staff that it was unlikely that they would be required to return to the office until September 2020 but that, should government guidance around Covid-19 be updated, a risk assessment would be undertaken and plans communicated with adequate notice. The Chairman would decide whether Board sub-committee meetings and workshops in July and August would be undertaken remotely and would consult with the Chief Executive in August regarding plans for September.

3.7. The Chief Executive informed the Board that all staff had been invited to take part in facilitated workshops to discuss the issues behind the recent staff survey results and discuss what actions should be taken to address the issues raised. A representative from each workshop and the two staff facilitating all workshops would meet with Mary Davies to provide feedback. A paper regarding the survey would be put to the September Board meeting, alongside an implementation plan.

3.8. The Chief Executive informed the Board that the Interim Director of Corporate Resources’ contract would be extended by 18 months.

The Board

• Noted the information provided in the report.

4. Discussion about values

4.1. The Chairman introduced a discussion regarding the SSRO’s values, which would build on the Board’s discussions in preparation of the 2020/2023 Corporate Plan. Following the recent stakeholder survey and the staff workshops, this was a further opportunity to review the SSRO’s values, their impact and influence and to consider whether the SSRO operated according to the right principles.

4.2. The Chief Executive gave a presentation covering several related areas, including feedback from the stakeholder survey, the values of other comparable organisations, wider principles and potential drivers for change. In discussion, Board members made points including that:

• The culture of the SSRO was built upon strong assumptions around its purpose being to achieve value for money and fair and reasonable pricing.
• The SSRO’s value of independence had been demonstrated regularly and was important in view of the SSRO’s position between two large stakeholder groups; its value of being authoritative had been reinforced by its Corporate Plan ambition to be the acknowledged expert on single source defence procurement; the value of transparency had been beneficial to the organisation since its inception; and inclusivity was a powerful value that recognised staff as the organisation’s greatest asset.
• Staff were less likely to feel as affiliated to outward looking values as these did not relate directly to their work. Providing a good working environment and attention to detail in responding to concerns would be more important to staff than discussing more high-level values.
• There were several supplementary values within the staff handbook, the workforce strategy and the staff behaviours document. These could be brought to the fore to support the four lead values and strengthen the value of inclusivity. Values of trust and mutual respect should also be considered, as should treating people equally and building a diverse workforce. Several organisations had a value of ‘integrity’, which cut across independence, authoritativeness and transparency.
• It was important to ensure that values were followed and embedded, for example by measuring every Board paper against them.

4.3. In conclusion, the Chairman noted that this was an important discussion and that there was an opportunity to extend the SSRO’s values and integrate them more within the organisation. Staff would have an opportunity to reflect on the SSRO’s values, and these strands would be brought together through an action plan in response to the staff survey, subsequently feeding into the development of the next Corporate Plan.

The Board discussed the SSRO’s values.

5. Stakeholder engagement strategy

5.1. David Galpin, Director of Legal and Policy, introduced the report, which presented a revised and updated stakeholder engagement strategy for approval. The strategy built on the successful elements of the SSRO’s approach to engagement over the last two years while acknowledging that further work was needed to achieve some priorities. Amendments to the strategy had been informed by the feedback provided by respondents to the SSRO’s recent stakeholder survey. The updated strategy was a development of the existing strategy, with several elements retained, as the existing strategy remained broadly correct and the environmental context had not changed significantly.

5.2. The Tailored Review had recommended that the SSRO should have further access to staff within the MOD, and this was one of the priorities that the strategy sought to address. A further priority was to improve the experience of those responding to the SSRO’s consultations.

5.3. In discussion, the Board reflected that the existing stakeholder strategy had stood the SSRO in good stead, as evidenced by the positive results from the recent stakeholder survey. The updated strategy was approved and it was agreed that a detailed implementation plan should be developed to underpin the strategy with specified tasks, owners, deliverables and dates. Some formatting issues would also be addressed. Action: David Galpin.

The Board:

• approved the stakeholder engagement strategy;
• approved publication of the stakeholder engagement strategy on the SSRO’s website; and
• noted that the stakeholder engagement strategy is not formally consulted on, as it is based on the stakeholder survey, but will be discussed with stakeholders at the next Operational Working Group in September 2020.

6. Annual Report and Accounts

6.1. Mike Wetherell, Interim Director of Corporate Resources, introduced the SSRO’s 2019/20 Annual Report and Accounts for review and approval, in advance of the document being presented to the Comptroller and Auditor General on 3 July 2020.

6.2. Marta Phillips provided an overview of the Audit Committee’s discussion about the Annual Report and Accounts on 16 June. The process had worked well and the discussion had been straight-forward, which was testament to the work of the staff who had prepared the document. Subject to one final change, the Board approved the Annual Report and Accounts and noted their gratitude to the staff involved.

The Board approved the Annual Report and Accounts 2019/20.

7. Corporate Performance Report

7.1. Neil Swift introduced the report, which provided an update to the Board on how the organisation was delivering against its corporate priorities as set out in the Corporate Plan. Following his introduction the Chief Executive invited comments regarding corporate performance from the Directors.

7.2. In discussion, Board members asked for an update on annual leave balances and was informed that the executive was encouraging staff to take leave and was closely monitoring remaining leave.

The Board noted the Corporate Performance Report.

8. Minutes from Audit Committee meeting of 16 June 2020

8.1. Marta Phillips presented the minutes from the meeting of the Audit Committee on 16 June 2020. The meeting was focused around the Annual Report and Accounts. The Committee had also reviewed the corporate risk register. The Board noted in particular Marta Phillips’s comments about the Audit Committee’s consideration of the Corporate Risk Register and the associated risk appetite for each of the risks.  It considered the balance of risks and risk appetite and decided that it was satisfied with the current risk profile. 

8.2. It was noted that the SSRO had received substantial assurance for the 2019/20 year from GIAA, and that the NAO had not raised any significant issues in its audit. The SSRO’s internal auditor would be rotated for the 2020/21 audit year and there had been a one-year transition. There was also a new audit lead at the NAO.

The Board noted the minutes and update from the Committee.

9. Minutes from Regulatory Committee meeting of 19 May 2020

9.1. Peter Freeman presented the minutes from the meeting of the Regulatory Committee on 19 May 2020. The focus of the meeting was a detailed examination of the SSRO’s review of legislation.

The Board noted the minutes and update from the Committee.

10. Future agendas and any other business

10.1. The Chairman introduced the two-page document showing the business of all Board and sub-committee meetings for the next year.

10.2. The next meeting would take place on 29 September 2020 at 2:00pm.

11. Chief Executive’s contract of employment

11.1. The Chairman asked all executive members of the Board and attendees to leave the meeting. The non-executive Board members remained to discuss the Chief Executive’s contract of employment. The MOD Representative was present for the discussion as was the Director of Legal and Policy, who would provide legal advice if required to the non-executive members.

11.2. The Chairman introduced the report. The non-executive Board members discussed the paper and agreed that the Chief Executive’s contract should be extended for a period of two years to 31 May 2023. The members also agreed that the Chief Executive should receive the same 1.5 per cent pay increase as other staff.

The Board agreed to extend the appointment of the Chief Executive Officer for two years to 31 May 2023.