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Role Description

Role description: Member of Council

Last updated: 14 January 2021

Role Description: Member of Council

Including duties and requirements of directors of a company limited by
guarantee

1. Membership

1.1 Members are expected to play an appropriate part in ensuring that the necessary business of Council is carried on efficiently, effectively, and in a manner appropriate for the proper conduct of public business. They are expected to make rational and constructive contributions to debate and to make their knowledge and expertise available to Council as opportunity arises.

1.2 Members have a responsibility for ensuring that Council acts in accordance with the University’s Memorandum and Articles of Association and with the University’s internal rules and regulations, and should seek advice from the Secretary in any case of uncertainty.

1.3 Members are required to accept collective responsibility for the decisions reached by Council. Members elected, nominated or appointed by particular constituencies may not act as if delegated by the group they represent, and may not be bound in any way by mandates given to them by others.

2. Standards

2.1 Members have a responsibility for ensuring that Council conducts itself in accordance with accepted standards of behaviour in public life, embracing selflessness, integrity, objectivity, accountability, openness, honesty and leadership. They must at all times regulate their personal conduct as members of Council in accordance with these standards.

2.2 Members must make a full and timely disclosure of personal interests to the Secretary in accordance with the procedures approved by Council. They must as soon as practicable disclose any interest which they have in any matter under discussion and accept the ruling of the Chair in relation to the management of that situation, in order that the integrity of the business of Council and its Committees may be and may be seen to be maintained.

2.3 Since the University is a Charity, members have a responsibility for ensuring that Council exercises efficient and effective use of the resources of the University for the furtherance of its charitable purposes, maintains its long-term financial viability, and safeguards its assets, and that proper mechanisms exist to ensure financial control and for the prevention of fraud.

3. The Business of the University

3.1 Members have a responsibility for ensuring that Council exercises control over the strategic direction of the University, through an effective planning process, and that the performance of the University is adequately assessed against the objectives which Council has approved.

3.2 Members should endeavour to establish constructive and supportive but challenging working relationships with the University employees with whom they come into contact, but must recognise the proper separation between governance and executive management, and avoid
involvement in the day-to-day executive management of the University.

3.3 Members will be appointed by Council to at least one Committee of Council and are expected to play a full part in the business of all Committees to which they are appointed. Committee memberships will normally be reviewed annually.

3.4 Any arrangement for the member to act as formal signatory on behalf of the University, eg in connection with the use of the Seal, should be stipulated.

4. The External Role

4.1 Members may be asked to represent Council and the University externally, and will be fully briefed by the University to enable them to carry out this role effectively.

4.2 Members may be asked to use personal influence and networking skills on behalf of the University.

4.3 Members may be asked to play a role in liaising between key stakeholders and the University, or in fund-raising. They will be fully briefed by the University to enable them to carry out this role effectively. However, this role in particular must be exercised in a carefully co-ordinated fashion with other senior officers and staff of the University.

5. Personal

5.1 Members will have a strong personal commitment to Higher Education and the values, aims and objectives of the University.

5.2 Members will at all times act fairly and impartially in the interests of the University as a whole, using independent judgement and maintaining confidentiality as appropriate.

5.3 Members are expected to attend all meetings of Council and of Committees of which they are a member, or give timely apologies if absence is unavoidable.

5.4 Members must participate in any procedures established by Council for the regular review of the performance of individual members. Members should attend any induction activities arranged by the University and should participate in appropriate training events such as those organised by Advance HE, which will be drawn to their attention by the Secretary.

5.5 Membership of Council is not remunerated, but members are encouraged to reclaim all travelling and similar expenses incurred in the course of University business, via the Secretary. Directors and Officers Liability Insurance is in place.

5.6 Members are normally appointed for a maximum of two periods of four years each. In exceptional circumstances Council may agree to an extension.

Person Specification: Member of Council

EssentialDesirable
1. Attainments and QualificationsFirst degree (or equivalent)Evidence of continuing
professional development
2. Previous
Experience
Ability to think and act
strategically.
Personal expertise in an area
relevant to the responsibilities
of Council.
3. Training and
Specialist Skills
High levels of written and oral
communication skills.
Ability to listen to others.
Analytical skills.
4. DispositionAbility and willingness to be an ambassador for the University.
Ability to work in effective teams
with other members of Council.
Ability to work in effective teams
with the Vice-Chancellor and other members of the University Executive.
Good under pressure.
Diplomatic but firm.
Prepared to give University business
a high priority.
5. CircumstancesAvailable to attend University related
activities on at least 15 full or part days per year. In addition University business is likely to punctuate other days eg telephone conversations, preparation for meetings
etc.

What are the duties of directors and requirements of the director of a
company limited by guarantee

1. Introduction

1.1 The management of a company’s affairs is typically delegated by its articles of association to its directors. The Company Directors Disqualification Act 1986 specifies certain matters to be taken into account when determining whether the conduct of a director in relation to any company (or companies) renders them unfit to take part in the management of the
company. A search will need to be undertaken prior to the appointment of any director to the company to ensure that they are not disqualified from acting. CRB checks may also be required.

1.2 Prior to the advent of the Companies Act 2006, directors previously had fiduciary duties.These duties have now been codified in the Companies Act 2006 (the “Act”).

1.3 This note is intended to summarise the duties of the directors of the Company in the exercise of their powers in the conduct of the company’s business and requirements companies need to comply with, paying particular attention to the changes introduced by the Act. It will also
consider directors’ liabilities and proceedings taken against directors by members, and will offer some practical advice in relation to these areas.

1.4 It should be noted that this note is not an exhaustive account of directors’ duties or company requirements, but is simply designed as a summary of some of the key obligations.

2. Directors’ general statutory duties under the Companies Act 2006

2.1 Sections 170-181 of the Companies Act 2006 sets out the statutory statement of the general duties of directors. These statutory duties replace historical common law duties and equitable principles on which they are based, but case law on such common law duties and equitable principles will still be used in order to help interpret the statutory duties.

2.2 The Act does not provide an exhaustive list within the statutory statement. Other duties are incorporated in alternative sections of the Act (for example, the duty to deliver accounts – non-compliance with which is a criminal offence) and others remain completely uncodified (such as the duty to consider creditors’ interests in times of threatened insolvency).

2.3 The company’s articles often provide more additional duties. However, any additional duties inserted into the Articles of a company must not dilute the duties except to the extent expressly permitted in the Act.

2.4 The duties in the Act apply to all directors, including shadow directors and, in some cases (the duty to avoid conflicts of interest, for example), to former directors. The duties only apply to shadow directors to the extent that the corresponding common law rules or equitable principles so apply, illustrating the link between the existing law and that contained within the Act.

2.5 The general duties contained in the Companies Act 2006 are as follows:

2.5.1 the duty to act within powers (section 171). This means that a director must act in accordance with the memorandum and articles of the company and must only exercise his powers for their proper purpose.

2.5.2 the duty to promote the success of the Company (section 172). A director must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole. The Act has introduced a list of factors which directors must have regard to in exercising their duty of good faith. These are:

2.5.2.1 the likely consequences of any decision in the long term;

2.5.2.2 the interests of the company’s employees;

2.5.2.3 the need to foster the company’s business relationships with
customers and others;

2.5.2.4 the impact of the company’s operations on the community and the
environment;

2.5.2.5 the desirability of the company maintaining a reputation for high standards of business conduct; and

2.5.2.6 the need to act fairly as between the members of the company.

2.5.3 the duty to exercise independent judgement (section 173).

2.5.4 the duty to exercise reasonable care, skill, and diligence (section 174). A director must exercise the care, skill and diligence which would be exercised by a reasonably diligent person with both the general knowledge, skill and experience that may be reasonably expected of a person carrying out the functions carried out by the director in relation to the company and the general knowledge, skill and experience that the director actually has.

2.5.5 the duty to avoid conflicts of interest (section 175). This means that a director must avoid situations where they have or can have a direct or indirect interest which does or may conflict with those of the company. This applies in particular to the exploitation of property, information or opportunity. Under the model Memorandum, directors of the company must declare its interest in any proposed transaction or arrangement where they may have an interest and must not be party at the meeting in which the transaction in which the director is interested, count in the quorum or be entitled to exercise his/her vote.

2.5.6 the duty not to accept benefits from third parties (section 176). A director must not accept any benefit from a third party which is conferred because of his being a director or his doing or not doing anything as a director, unless the acceptance of the benefit cannot reasonably be regarded as likely to give rise to a conflict of interest.

2.5.7 the duty to declare interest in proposed transaction or arrangement with the company (section 177). (See 2.5.5 above).

3. Practical Guidance for Directors

3.1 In the future, there may well be a greater risk that decisions reached by directors will be challenged, particularly by means of a member action. Consequently, it is advised that directors:

3.1.1 are careful to ensure that, if relevant, each of the six listed factors are considered in relation to promoting the success of the company and are recorded in all company minutes;

3.1.2 bear in mind that the six “good faith” factors listed above are not exhaustive. In many situations, it will be necessary to have regard to other factors;

3.1.3 have a proportionate and comprehensive record of the reasons for all decisions made;

3.1.4 where appropriate, seek advice (for instance on the impact of the company’s operations on the community and environment);

3.2 Other Statutory Responsibilities
It is important to realise that provisions of some statutes can apply to directors, for example, liability for health and safety and environmental offences may extend to individuals. Such liability occurs in serious cases and where it arises may include criminal liabilities. Criminal liability may extend to individuals within the company, may be additional to the liability of the company and may include imprisonment.
The following legislative duties apply to directors:

3.2.1 Health and Safety Law
So far as is reasonably practicable employers and therefore the company has a general duty to ensure the health, safety and welfare at work of its employees. This includes safe plant and systems, installation, instruction and supervision.

In addition, there is a general duty for employers, and therefore the company, to make persons other than their employees to conduct their undertaking in such a way as to ensure as far as reasonably practicable that they are not exposed to risks of health and safety.

The company should manage and review the risks associated with the working environment on a regular basis. The Company should put in place and illustrate that the health and safety policy is in operation and adopted.

In the current climate it is increasingly likely that the directors in addition to the company will be held liable for failure to comply with health and safety obligations. Current penalties are imprisonment, a fine or both.

3.2.2 Corporate manslaughter
Where an offence committed by a company is proved to have being committed with consent, connivance or has been attributable to any neglect on the part of any director, manager, secretary or similar officer of the company they as well as the company shall be guilty of that offence.

This principle may apply in the event of death of an individual where it is possible for a director to be charged with the offence of corporate manslaughter. One definite consequence of any conviction would be the probability of disqualification of the director from holding office for an average of five years or so. We would suggest that detailed audit trails are kept to avoid such liability.

3.2.3 Data Protection Legislation
The University is registered with the Information Commissioner’s Office (ICO) as a Data Controller and is committed to protecting the rights of individuals in line with Data Protection legislation. The University’s Data Protection Policy is available here: http://www.glos.ac.uk/docs/download/Governance/data-protection-policy.pdf

Data Protection legislation defines ‘personal data’ as any information relating to an identified, or an identifiable natural person (‘data subject’). An identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person. Personal data also
includes any expression of opinion about the data subject and what is intended for them.

Under the General Data Protection Regulation (GDPR) individuals are empowered by a series of new or enhanced rights. These are the right to: be informed; of access; to rectification; to erasure; to restrict processing; to data portability; to object; and rights relating to automated decision making and profiling.

The Data Protection Officer is responsible for advising the University on compliance with Data Protection legislation and monitoring its performance against it. Any concerns regarding the way the University is processing personal data should be relayed to the Data Protection Officer at dpo@glos.ac.uk.

The ICO has the power to fine organisations up to €20M, or between two and four per cent of their global turnover (whichever is greater) for non-compliance or breaches.

3.2.5 The Criminal Justice Act 1993
In very broad terms, anyone who uses inside information in order to gain or assist another to gain an advantage is likely to fall within the scope of this statute. The current penalties are up to seven years imprisonment, a fine or both.

3.2.6 Tax, National Insurance and VAT
Within fourteen days at the end of every income tax month the company must account to HM Inspector of Taxes in respect of specified pay as you earn amount in relation to each employee according to the Income and Corporation Taxes Act 1988.

An employer, and therefore the company, is also responsible for accounting for the national insurance contributions of their employees together with any VAT arising from the supply of goods or services by the company.

It is the directors’ responsibility to ensure that such payments are made and, in the event that they are not, a director may face criminal charges if they consented to or connived of a non-payment or as a result of his neglect.

Please note that the above list is not exhaustive and contains illustrative examples only. There are numerous other statutes and regulates which may apply to company directors. For more specific advice on the applicable laws and regulations, detailed legal advice should be sought.

4. Conclusion on Directors’ Duties

4.1 As can be seen from the increased number of codified directors’ duties, there is a real prospect of increased litigation under the Act.

4.2 Directors should bear in mind, however, that much of this law was in existence before the creation of the Act, so its implementation does not represent a complete overhaul of the law in relation to directors’ duties. Additionally, it is to be hoped that the courts, when considering the first test cases, will apply a sensible and relatively restrictive approach so as
to minimise the scope for tactical action.

Member of Council (June 2019)

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