/ Commission for Ethical Standards
in Public Life in Scotland

HANDBOOK

Guidance on the application of the

Code of Practicefor Ministerial Appointments

to Public Bodies in Scotland

September 2011

Contents

Using the handbook / 4
Introduction / 5
The principles of the code / 6
Options open to the Scottish Ministers / 7
Section A – The skills and knowledge needed by the board are clear / 8
Section B – Gaps to be filled are identified / 12
Section C – An appropriate plan guides appointment activity / 16
Section D – A range of able people is attracted to apply / 29
Section E – Appropriate methods are used to identify the most able people / 39
Section F – The most able people are recommended for appointment / 60
Section G – The most able people are appointed and meet the needs of the board / 63
Section H – People have confidence in the appointments made / 66
Section I – The skills and knowledge needed by the board are maintained / 75
Section J – Appointment decisions are communicated / 77
Annexes:
One – Example skills matrix / 79
Two – The Commissioner’s scrutiny / 81
VERSION ONE[1] – PUBLICATION DATE 01 SEPTEMBER 2011

Using the Handbook

This handbook is primarily intended for use by people who are actively engaged in the regulated public appointments process.In the main this will be

  • the Scottish Ministers
  • senior civil servants who chair selection panels or take part as panel members
  • chairs of regulated public bodies
  • board members of regulated public bodieswho participate as selection panel members
  • Scottish Government officials such as sponsor team members and members of the Public Appointments Centre of Expertise (PACE).

The table below gives a quick guide to the sections of the handbook likely to be most relevant to these participants. It is anticipated that all sections will provide useful guidance to Scottish Government officials.

Scottish Ministers / Chairs of
public bodies[2] / Selection panel chairs / Selection panel members / Public appointments assessors
Principles – P6 / Principles – P6 / Principles – P6 / Principles – P6 / Principles – P6
A1 to A3 – P8 / A1 to A3 – P8
B1 to B2 – P12 / B1 to B2 – P12 / B1 to B2 – P12
C1 to C3 – P16 / C1 to C3 – P16 / C1 to C3 – P16
C4 to C5 – P26 / C4 to C5 – P26 / C4 to C5 – P26 / C4 to C5 – P26
D1 to D11 – P29 / D1 to D11 – P29 / D1 to D11 – P29
E1 to E5 – P39 / E1 to E5 – P39 / E1 to E5 – P39
F1 to F2 – P60 / F1 to F2 – P60 / F1 to F2 – P60
G1 to G4 – P63
H1 to H2 – P66 / Possibly H1 to H2 – P66 / Possibly H1 to H2 – P66 / H1 to H2 – P66
Possibly H3 to H5 – P72 / H3 to H6 – P72 / H3 to H6 – P72 / H3 to H6 – P72
I1 to I3 – P75 / I1 to I3 – P75
J1 to J2 – P77 / J2 – P77

This handbook will also be of relevance to Public Appointments Assessors. Public Appointments Assessors are not members of the selection panel. Their role is to enable compliance with the code by offering an opinion on whether a course of action proposed by a sponsor team or selection panel will comply with the principles and practices contained in the Commissioner’s code.

Introduction
This handbook is offered as a guide to people who are actively involved in making non-executive appointments to the boards of regulated public bodies[3]. It is designed to support compliance with the 2011 Code of Practice for Ministerial Appointments to Public Bodies in Scotland(the code). The handbook provides information on

  • the rationale behind the requirements of the code
  • the options open to the Scottish Ministers, civil servants and selection panel members when implementing the code.

The contents of the handbook are not mandatory. It is designed to provide guidance on how the requirements of the code may be translated into practice and to help those involved in the public appointments process achieve a successful outcome for all concerned. When statutory guidance on the application of the code is necessary to ensure compliance, it will be provided as a separate, stand-alone document.

The 2011 edition of the code introduces a considerable amount of flexibility into the appointments process to reflect the different approaches that may be needed for Scotland’s diverse range of public bodies. The Scottish Ministers and selection panel members must decide how best to attract the people they need on a board, what method of application best suits the post and is likely to encourage people to apply and the most appropriate methods to assess applicants’ suitability. Where the handbookrefers to “an appointment” and “person” this should be taken to refer to single and multiple appointments.

For ease of reference the handbook follows the order and numbering of the code. It anticipates questions that participants in the appointment process may have about meeting the code’s requirements and provides a range of options and suggestions to illustrate some code-compliant approaches that participants may wish to consider. The examples are not exhaustive, but are intended to guide participants in their decisionmaking and demonstrate the flexibility that the code offers.

People who read the whole handbook will see some duplication, for example in sections A and B. This is designed to enable readers to refer to a specific section of the handbook, and not have to refer back to previous sections.

It would be impossible to anticipate every situation that might arise before or during an appointment round. As always, my office is happy to provide both general and specific guidance on code-compliance. The Public Appointments Assessor assigned to a round will be available to offer an opinion on whether or not planned courses of action will comply.

I hope that the handbook proves to be a useful tool in supporting appointment activity and generating a range of able people for appointment by the Scottish Ministers.

Karen Carlton

Public Appointments Commissioner for Scotland

September 2011

The principles of the code
The code has three principles, designed to guide appointment activity so that it is open, fair and accessible, as required by the Public Appointments and Public Bodies etc. (Scotland) Act 2003 (the Act). The principles areoutcome-focused, applicant-focused and appropriate.

Why are they important?

Outcome-focused

The purpose of Scotland’s ministerial public appointments process is to secure the appointment of able people to lead our public bodies in the delivery of efficient and effective public services. The process must begin with a clear understanding amongst all participants of the outcome required, the number of posts to be filled, the length of term of each, the requirements of the roles to be performed, the specific attributes of the person to be appointed and the date by which the appointment must be made. The code specifies the activities necessary to achieve the required outcome, and this handbook provides some options for the methods to be used to support code-compliant activity.

Applicant-focused

The Scottish Ministers need a range of able people to apply in order to secure the right outcome in every appointment round. Publicity must attract able people. The application and assessment methods used must encourage and enable them to demonstrate their merit. People need to know that their application is valued and that the information they provide will be used only for the purpose for which it is designed and will be handled confidentially. They must be confident they will experience equality of opportunity throughout an appointment round, with their individual needs acknowledged and accommodated where appropriate.

Feedback is an important part of the process – someone who has taken time and may have put a significant amount of effort into making an application without being appointed needs to know that their application was welcomed and where and how they may improve. Without this, they may never reapply and Scotland’s public bodies will fail to capture the talent available in our population.

Appropriate

Scotland’s public bodies encompass a wide range of functions and the positions on their boards are equally varied. When the appointments process accommodates this variety and is tailored to the body and the post in question, the likelihood of a successful outcome is enhanced. Tailoring each appointment round means using resources effectively, a vital part of public sector life. Appropriate decisions, actions and record keeping will provide evidence to the Public Appointments Commissioner and the general public that we have a ministerial public appointments system that is open and fair and in which the people of Scotland can have confidence.

Options open to the Scottish Ministers

The code makes clear what is required to translate these principles into practice. If there are situations where the requirements are considered inappropriate, the code requires the Scottish Ministers to discuss the specific circumstances with the Commissioner before any action is taken. Just as the code and guidance offer flexibility, regulation of the ministerial public appointments process can accommodate the specific requirements of a body or its board. However, whilst practices may be adjusted, the principles must be upheld during every appointment round.

An informal approach to the Commissioner to discuss options is always possible. Once the Scottish Ministers have decided on the best optionto address the situation faced they will be asked to specify their preferred course of action in writing. This will enable them to comply with their responsibilities as set out in the code – paragraph 1 iv. makes it clear that they are responsible for ensuring a record of decisions and actions taken during every appointment round.
Section A – The skills and knowledge needed by the board are clear

A1

RATIONALE

The foundation for success in all appointment activityis clarity about the skills and knowledge needed by a board to perform its role economically, efficiently and effectively. The Scottish Ministers shouldbe clear about the board’s requirementsbeforeany appointment activity begins.

For new appointments, the selection panel will need this clarity at the start of an appointment round. In the case of reappointments orextensions to appointment terms, the appointing minister should be clear about the requirements of the body concerned before deciding whether the individual continues to be an appropriate fit.

This clarity will ensure that appointment activity is focused on the outcome required - a board equipped to perform effectively. Without this, the public body may not have the leadership and direction it needs, service delivery may be impeded or advice provided to the Scottish Ministers may be incomplete.

Clarity over the skills and knowledge required will ensure appointment activity is targeted to appropriate individual and groups, thus making the best use of the resources required to run an appointment round.

And finally, clarity will protect the Scottish Ministers from complaints made about inappropriate appointment decisions – when appointments are known to be made within a framework of necessary skills and knowledge, their appropriateness is apparent.

OPTIONS

How can a minister identify the skills and knowledge needed by the board?

  • There are some questions that the Scottish Ministers may wish to consider in identifying the required skills and knowledge. For example
  • what is the purpose of the public body and what are its strategic objectives?
  • what functions will the board be required to perform (for example, is this an executive or advisory body)?
  • what are the current and future challenges faced by the board?
  • are there any specific projects (for example a capital project) or particular requirements (for example geographic location or fluency in a language) to be considered?
  • if so, how will these be translated into the skills and knowledge required?
  • how long will such specific skills or knowledge be needed by the board?
  • does the body’s founding legislation require a particular qualification or experience in a specialist field?

The answers to these questions will help to determinethe collective skills and knowledge needed by the board.

Section A - The skills and knowledge needed by the board are clear

What support is available to the minister?

One option is to use the generic competency framework being developed by the Scottish Government’s PACE as a benchmark and consider

  • does the board need the skills listed in the framework? Some of them? All of them?
  • how many members with each of the necessary skills should sit on the board, to ensure effective debate and decision-making, cover for periods of absence and succession planning?
  • what are the specific skills and knowledge needed by the board in addition to those on the generic framework?

Another option is to use a skills matrix, populated by the answers to the questions above and other questions arising from the board’s strategic plan. Once a matrix is completed it can support identification of gaps to be filled by new appointments, the subject of the next section of the handbook.

EXAMPLE

An example of a skills matrix appears in annexe one.This can be a very useful tool but only when reviewed and updated regularly to reflect the changing needs of the board and the changing mix of the board over time.

Whichever option or options the appointing minister uses, meaningful consultation with the chair of the body is vital to ensure that the needs of the body and the board are captured at this early stage.

Involving the chair in defining the skills and knowledge

It is important for the appointing minister to discuss appointments, reappointments and term extensions with the chair of the public body concerned. They are accountable to the Scottish Ministers for the performance of the body and should be fully involved in shaping decisions about the composition of its board. It is important that the chair has confidence in, and a sense of ownership in relation to, the appointments made. If the current chair is leaving the board, and therefore will not be working with the people to be appointed or reappointed, they can still provide valuable insights into the future requirements of the board.

The chair will be able to add significant value to discussions and thinking in the following areas

  • the public body, its purpose, plans and future challenges
  • the individual and collective skills and knowledge of board members and the relativeimportance of these now and in the future
  • additional future requirements
  • the diversity of the current board and whether this should be enhanced.

Section A – The skills and knowledge needed by the board are clear

There are, of course, some situations where this may not be appropriate, for example when the vacant role is that of the chair and there is no current incumbent. If it is not appropriate, or possible, to involve the current chair, consideration should be given by the Scottish Ministers to involving someone else who could provide valuable information. This may be the chair of a public body with a similar purpose and challenges ora senior civil servant who has an in-depth knowledge of the body and its board.

When it is not possible or not appropriate to consult the chair of the body in identifying the skills and knowledge needed by the board, the code requires the appointing minister to discuss their options with the Commissioner in advance of taking any action.

How can the Scottish Ministers ensure the right balance of skills and knowledge on a board?

In most cases, board members will require some skills in common such as the ability and willingness to challenge and probe, orthe ability to demonstrate sound judgment. In other cases, each individual board member will require to bring a complementary set of skills and knowledge to the table. For example, the chair of a board’s audit committee will typically be required to have a different set of functional skills and knowledge to that of a lawyer member or a service-user member. The most effective boards are usually made up of individuals who bring a mix of some common and some different sets of skills and knowledge to the table.

The Scottish Ministers need to give careful consideration to the balance of skills and knowledge required. This is particularly the case where a whole board needs to be appointed. Setting the same generic requirements for all roles may be unnecessarily restrictive and will also usually fail to attract a wide and diverse pool of applicants.Using the same requirements for a number of different bodies is likely to lead to a limited number of individuals who can apply for roles and may lead to multiple appointments for these individuals. It may also lead to what has become known as the revolving door, where an individual demits one board position only to walk into another position with another body shortly thereafter. That is why the code requires real care and consideration to be given to identifying the skills and knowledge required and also why the Scottish Ministers must make their position on the holding of multiple appointments clear.

Diversity is important for the effective functioning of boards.

EXAMPLE

A common assumption is that boardsrequire all members to demonstrate

“the ability to demonstrate strategic thinking within a board setting”.

What are the ramifications of this assumption?It precludes anyone who may have the actual skill required (strategic thinking) but who has not demonstrated the skill in a board setting.

Of the total pool of potential applicants who have this skill, it is likely that a very small proportion of them will have held a director or non-executive director position. Having held such a position appears to be a prerequisite for the role given the way the requirement is worded, which excludes potentially talented and effective applicants from applying.

Section A – The skills and knowledge needed by the board are clear

There is an option not to make “within a board setting” part of the requirement,which will, on its own, widen the pool of potential applicants considerably. Another option is to consider whether every board member requires this particular skill. The Scottish Ministers are advised to consider carefully the impact that using generic and restrictive requirements will have on the diversity of a board and thereby on its overall performance. For a given board, individual roles on the board can be identified with different skills and knowledge attached to each, so that a balance is achieved across the board as a whole.

EXAMPLE

The Scottish Ministers appointed the whole board of a new body using one appointment round. The body is required to have at least one board member who uses the services that the body has been set up to regulate. Whilst determining and monitoring the implementation of strategy is an important board function its inclusion as an essential requirement for all board member roles would be too restrictive - the pool of potential applicants who are users of the service who have also determined and monitored the implementation of strategy will be quite small.