SNH Board Meeting on 29 January 2019 Were Approved As an Accurate Record of the Previous Meeting

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ONE HUNDRED AND SEVENTY-SIXTH SCOTTISH NATURAL HERITAGE BOARD MEETING, SCOTTISH FUNDING COUNCIL, 99 HAYMARKET TERRACE, EDINBURGH, 12 MARCH 2019

OPEN SESSION CONFIRMED MINUTES

MEMBERS PRESENT Mike Cantlay Chair Angus Campbell Deputy Chair Cath Denholm Deputy Chair Susan Murray Member Bob Furness Member Jackie Hyland Member Ian Gillies Member

IN ATTENDANCE Francesca Osowska Chief Executive Nick Halfhide Director of Sustainable Growth Sally Thomas Director of People & Nature Jane Macdonald Director of Business Services & Transformation Alan Hampson Head of Business Services & Transformation Eileen Stuart Head of People & Nature Alison Shields Head of External Affairs Graham Boyle Chief of Staff Shelley Rennie Board Business Manager (Minutes) Paul Sutherland Planning & Performance Manager (Item 11) Stuart MacQuarrie Activity Manager – Managing Nature Reserves (Item 12) Carrie Urquhart HR Business Partner (Item 13) Rebecka Bergh Youth Panel Rep Amee Hood Youth Panel Rep

AGENDA ITEM 1: OPENING REMARKS AND APOLOGIES

1. The Chair opened the meeting by welcoming everyone to the one hundred and seventy-sixth Scottish Natural Heritage (SNH) Board meeting. The Chair recorded that the Board will be joined by the Cabinet Secretary for Environment, Climate Change and Land Reform and Scottish Government (SG) Officials, Keith Connal and Iain Martin at 11:30 am today.

2. The Chair invited Ian Gillies to introduce the SNH Young Employee Panel representatives. Ian Gillies introduced Rebecka Bergh and Amee Hood to the Board. Their attendance marks the legacy of the Year of Young People 2018. The

Board welcomed their attendance and noted that representatives of the Young Employee Panel are considered full members of the Board; however, representatives are not entitled to vote and would be asked to abstain from those discussions.

3. Apologies were received from Kate Broughton, Aoife Martin and Ross Johnston.

AGENDA ITEM 2: DECLARATIONS OF INTEREST

4. The Chair recorded his recent application to the Agri-Environment Climate Scheme (AECS). Prior to submission, the Chair sought advice from SNH and was assured that his application would be assessed by an External Body and that this did not pose any conflict of interest. The Board noted the submission of the Chair’s recent AECS application.

AGENDA ITEM 3: MINUTES, ACTION POINTS AND MATTERS ARISING

5. The Minutes of the SNH Board Meeting on 29 January 2019 were approved as an accurate record of the previous meeting.

Action Points

6. The following updates were provided in relation to the outstanding action points:

AP12/172 An update paper on Organisation Development has been provided to the Board. The Board will be presented with a further paper at their meeting on the 8 May 2019. Lynda Thomson is leading this work and will be present at the next Board meeting in Stornoway. Discharged.

AP02/173 Ian Gillies updated on his recent meeting with the National Farmers Union, Scotland (NFUS) Crofters Highlands and Islands Committee on 1 February 2019. Angus Campbell, SNH Deputy Chair and Claudia Rowse, Head of Rural Resources were also in attendance. Discussions were productive with further follow up expected. Ian Gillies requested that the action remains open to allow for ongoing discussions to continue with the NFUS and Crofting Federation. Ongoing.

AP01/174 A paper on Inclusive Growth and the National Economic Action Plan will be presented to the Board on 8 May 2019. Ongoing.

AP02/174 Ross Johnston provided the Board with a short briefing paper (3 March 2019) on the Scottish Forestry Strategy including SNH’s response in relation to the Consultation. Discharged.

AP01/175 Following the last Board meeting (29 January 2019) the Chief Executive circulated a copy of the Communications Review Lessons Learnt Report to the Board with a summary of progress to date. This has since been discussed by the

Audit and Risk Committee (ARC) at their recent meeting (7 February 2019). Going forward, the Committee will receive quarterly reports on the progress of the implementation of the recommendations. The Committee agreed to retain an oversight of the actions arising from the review. The Board will be kept informed on progress via the ARC‘s quarterly reports. The Board were content to discharge this action. Discharged.

AP02/175 Graham Boyle has provided a consolidated note and action plan following the Board and Senior Leadership Team’s development session held on 28 January 2019. This will be discussed by the Board under Item 13. The action remains ongoing. Ongoing.

AP03/175 The guidance and protocols for Young Employee representation at future Board meetings has been drafted and circulated to the Board for information. Discharged.

AP04/175 Eileen Stuart informed that future quarterly Performance Reports will include SNH’s integrated approach to our Health Work and the wider placed- based approaches. A paper will be presented to the Board in due course, this will provide a framework for SNH’s future engagement with Green Health Partnerships. Further plans are underway to meet with Dr Bird to review and mainstream SNH’s work around its health agenda. Ongoing.

AP05/174 Sally Thomas informed that a briefing paper will be circulated to the Board on the wider stakeholder engagement on Marine Protected Areas. The Board noted that the first stakeholder engagement workshop is taking place today (12 March 2019) which is being led by Marine Scotland and supported by SNH staff. This will then be followed up by pre-consultation meetings which will run until the end of April; these meetings are being led by SNH with support from Marine Scotland. There will be further consultation drop-in events held across Scotland led by both SNH and Marine Scotland. Discharged.

Matters Arising

7. There were no matters arising.

AGENDA ITEM 4: CHAIR’S REPORT

8. The Chair reported on his recent meetings with the Cabinet Secretary. Discussions included prioritisation and the mainstreaming of SNH’s work as presented under item 9 which SNH have shared with Scottish Government (SG).

9. The Board noted that the proposals on organisational branding have been submitted to SG for consideration. SNH looks forward to receiving advice pending SG’s consideration.

AGENDA ITEM 5: DEPUTY CHAIRS’ REPORT

10. Deputy Chair, Angus Campbell reported on his recent meeting with the Chief Executive and Chair of the Crofting Federation in Stornoway, this was a positive meeting with some fruitful discussions around Wildlife Management issues. Angus Campbell also attended an informal site visit and roundtable discussion with Mike Daniels from the John Muir Trust. Discussions covered deer management.

11. Deputy Chair, Cath Denholm reported on her recent attendance at the Business in the Community Conference ‘Waste to Wealth’. This provided a good opportunity to engage with Business and Industry, discussions covered Natural Capital and Climate Change. The Board noted Cath’s attendance at the recent Cairngorms National Park (CNP) Forest Strategy Launch. Notable themes included good partnership working between SNH and CNP, and the constraints imposed by Protected Areas.

AGENDA ITEM 6: BOARD ENGAGEMENT ACTIVITY

12. Ian Gillies reported on his attendance at the NFUS Annual General Meeting (AGM) and dinner on 7 February 2019. This was a great opportunity to engage with the NFUS and to understand the wider issues around crofting and farming post EU Exit.

13. Ian Gillies also reported on his recent attendance at the Islands Deal parliamentary reception on 27 February 2019. The Islands Deal has changed significantly as a result of reduced funding. SNH’s focus was on the environmental management issues.

14. Bob Furness recently chaired an SNH workshop on windfarm impacts, this event was attended by the President of the German Ornithological Society. This was a well-received event by all those in attendance. A second workshop will be held this week.

15. The Board noted that an International Conference will be held in August in Stirling. This is likely to attract around three/four hundred attendees and will cover Renewables and Wildlife Management.

16. The Board noted that Susan Murray will join a shortlisting panel for the Nature of Scotland Awards again for 2019.

17. The Chair welcomed the Cabinet Secretary for Environment, Climate Change and Land Reform and SG Officials to the SNH Board meeting. This provided an opportunity for the Cabinet Secretary, Ms Roseanna Cunningham and the Board to extend their discussions on prioritisation and organisational change in light of budgetary pressures.

AGENDA ITEM 7: CHIEF EXECUTIVE’S REPORT

18. The Chief Executive reported on the main activities since the last Board meeting (29 January 2019). The focus over the last few months has been on organisational prioritisation and SNH have had good dialogue with SG in this respect, which has been welcomed.

19. Ongoing work around the People Survey and staff engagement continues, with SLT colleagues visiting a number of offices in remoter locations. There is further work required in terms of cultural change with the next step being a meeting of the Extended Leadership Team on 19 March 2019.

20. The Chief Executive recently presented at the NFUS Conference and Dinner on 7 February 2019. The Chief Executive reflected on SNH’s presence and this was welcomed. SNH will continue to engage closely with the agricultural and rural sectors.

21. The Chief Executive attended a visit in Brussels to meet with Scotland Europa. Nick Halfhide, Director of Sustainable Growth and Marianne Sandison, Government Relations also attended this visit. Discussions focused on SNH’s membership with Scotland Europa, going forward SNH will actively use its membership to increase visibility. Discussions continued around SNH’s visibility during Green Week, Natural Capital and Place-Based approaches.

22. The Chief Executive chaired her first meeting of the UNESCO National Trail Steering Committee on the 14 February 2019. This is a Visit Scotland initiative which is to provide a digital trail between the twelve UNESCO sites in Scotland. The Chief Executive is acting as an independent chair.

23. The Board noted the Chief Executive’s recent visit to the Cumbernauld Living Landscape Project Visit on 5 February 2019, Cath Denholm also attended this visit. This provided an opportunity to meet with the conservation volunteers, the Corra Foundation and Scottish Wildlife Trust.

24. The Chief Executive noted her involvement with the Scottish Conservation Finance Project - £1 Billion Challenge. SNH’s involvement to date has focused around preventative spend.

25. The Board noted the fire which has considerably damaged the Fair Isle Bird Observatory. It is run by an Independent Trust and SNH have submitted a message of support.

26. The Board acknowledged the importance of Scotland Week 2019 and the opportunity this provides to showcase the work of SNH. The Board encouraged an SNH presence at this internationally recognised event which takes place from 3 to 10 April 2019.

AGENDA ITEM 8: AUDIT AND RISK COMMITTEE ANNUAL REPORT 2018/19

27. Deputy Chair, Cath Denholm presented the Audit and Risk Committee (ARC) Annual Report for 2018/19 in the absence of the ARC Chair. The report

summarises the main activities of the ARC during 2018/19, and further provides support to the Board in its governance role and as a component of the assurance the Accountable Officer relies on to complete SNH’s Governance Statement.

28. Cath Denholm informed that SNH will continue to receive the services and advice of Audit Scotland during 2019/20. The proposed Audit Fee for 2019/20 audit of SNH is £56,980, which represents a 2% increase from 2018/19. Following the Committee’s meeting on 2 February 2019, the ARC Chair wrote to Audit Scotland registering the ARC’s disappointment.

29. The Board noted the response from Audit Scotland informed that the 2% increase is a result of increased staff costs relating to the Scottish Government’s Pay Policy. The Board acknowledged that future Audit Fees should reflect our own flat cash settlements.

30. The Board noted that the Annual Internal Audit Plan for 2018/19 is on schedule and there are no areas of concern. The Annual Report and Accounts for 2017/18 were presented to the ARC on 26 July 2018. The ARC were assured by the information provided and recommended approval to the Accountable Officer. The Annual Report and Accounts for 2017/18 were published in September 2018 and are available on the nature.scot website.

31. During 2018/19, the ARC progressed work on Risk Management and good progress has been made in this area, notably the implementation of a Risk Appetite Statement which forms part of the Risk Management Policy.

32. The Committee receive quarterly Security Threat Assessment Reports which provides details on the level of virus activity and cyber security threats. The Board noted that the current security controls continue to provide an adequate level of security and that there were no major incidents reported during 2018/19.

33. Audit Scotland published guidance on Openness and Transparency which will be used to assess SNH’s approach to governance during 2019/20. Generally, SNH are well regarded in this area. The ARC commissioned Internal Audit to undertake a short review on SNH’s approach to Openness and Transparency, the findings of this review will be presented to the on 15 May 2019.

34. The ARC received its first mid-year financial report on 7 November 2018; this was a welcomed report since the Board Finance Working Group concluded.

35. The Board sought clarity on the conclusions from the work undertaken on the independence of SNH staff undertaking Board level roles (e.g. as Directors or Trustees). The Board were assured that the improved guidance provides clarity on a number of areas for staff considering undertaking Board level roles.

36. The Board acknowledged the work of the ARC and thanked Kate Broughton, ARC Chair for the welcomed changes and overall effectiveness of the ARC. The Board noted the Audit and Risk Committee Annual Report for 2018/19.

AGENDA ITEM 9: STRATEGIC REVIEW OF BIG AREAS OF EXPENDITURE

37. Alan Hampson introduced this paper which sets the context for developing the SNH Business Plan for 2019/20. The paper identifies the six biggest areas of spend which collectively account for 80% of SNH’s annual project expenditure. In preparation for subsequent Business Plans, notably 2020/21 and 2021/22, and consequential budgetary reductions, the Board are asked to note and agree the six big areas of expenditure and for those areas to be reviewed as a matter of priority over the coming months.

38. The Board offered their input into the process at appropriate points. The Board expressed its scepticism around the ordering of the six big areas presented in Table 1. The Board are keen to ensure that SNH apply the same level of scrutiny across all areas of work and that a rigorous process is applied to decision-making.

39. The Board requested further analysis to identify where there is greater flexibility to do things differently; the analysis should reflect anticipated budget reductions for 2020/21 and 2021/22. The Board will reconsider prioritisation of the six big areas of expenditure at their next meeting. The Board requested that a further paper is brought to its meeting on 8 May 2019 for consideration.

Action Point 01/176

AGENDA ITEM 10: SNH BUSINESS PLAN 2019/20

40. Alan Hampson introduced SNH’s Business Plan for 2019/20, It’s in our Nature: Year Two. The Business Plan is presented in two parts. Part one sets the context for each Outcome and the second details operational delivery. The Board noted that the strategic highlights for 2019/20 have been radically reduced, with the focus now being on one strategic highlight for each Outcome. This reflects previous Board discussions and the steer from our Cabinet Secretary.

41. The Business Plan for 2019/20 accommodates the known budgetary pressures; however, there is uncertainty at this time around the increase to the Civil Service employer pension contribution rates.

42. The Board recommended that Climate Change should permeate through SNH’s work, specifically Outcome 3 to better illustrate the integration between Biodiversity Loss and Climate Change.

43. The Chair reflected on the key deliverables presented in the Business Plan and strongly recommended that further consideration be given to reducing the number of key deliverables for 2020/21 and subsequent years, where we would need to be more radical in our approach.

44. The Board approved SNH’s Business Plan for 2019/20, “It’s in our Nature; Year Two”, subject to confirmation of funding to cover the increase in employer pension contributions. The Board confirmed that they are content for the Chair, in consultation with the Chief Executive to approve any necessary changes to the budget.

AGENDA ITEM 11: CONNECTING PEOPLE & NATURE – NATIONAL NATURE RESERVES

45. Sally Thomas introduced this paper which presents a review of the context of SNH- owned National Nature Reserves (NNRs) and in light of the publication of SNH’s Corporate Plan 2018/22 ‘Connecting People and Nature’. This paper follows previous Board discussions in February 2018.

46. The proposals outlined in the paper are to reposition SNH’s National Nature Reserves for the wider benefits of People and Nature. The current suite of NNR’s are diverse but present significant opportunities for SNH to engage with people on the ground or remotely via a range of digital platforms. NNR’s provide further opportunities to promote SNH’s Corporate Story, and in support of our Corporate Narrative.

47. Efforts will focus on motivating the public both locally and nationally to connect with nature, growing public value - focusing on the benefits, and increasing financial sustainability. The Board noted the challenges associated with the key priorities identified, notably financial sustainability. There are opportunities around income generation, but this needs to be fully scoped in order to understand what is achievable.

48. Stuart MacQuarrie informed that the key priorities highlighted in the paper are designed to provide flexibility, with a stronger focus on wider public participation and strengthening our engagement, which will be developed through a range of promotional activities. The wider promotional aspects of NNRs will be achieved through the NNR Partnership.

49. The Board acknowledged the opportunities to engage universities in the scientific interests to be gained through NNRs.

AGENDA ITEM 12: SNH EQUALITY REPORT 2019/20

50. Jane Macdonald introduced the draft SNH Equality Report for 2019/20. This is a legal obligation under the Equalities Act 2010; SNH is required to report on the progress of SNH’s Equality Outcomes every two years. This is SNH’s fourth Equality Report and demonstrates our commitment to ensuring the equality agenda is at the heart of what SNH does.

51. In summary, reasonable progress is being made across the three elements outlined in the report. SNH expects to finalise and publish the Equality Report by the end of April 2019. Notable highlights include SNH’s work with young people, and our external engagement and partnership working to deliver key projects.

52. The Board noted the challenges around demonstrating the actual equality impacts derived from SNH’s activities. Although SNH undertake wider survey work, this does not include all aspects of our work, thus SNH are unable to fully realise the

benefits. Our ambition is to extend SNH’s equalities work across each of SNH’s Outcomes.

53. The Board sought clarity around progressing some of the challenges presented in the paper. Carrie Urquhart informed that there is a longer-term piece of work to focus on the culture of the organisation, and how SNH can foster and encourage culture change. Jane Macdonald noted that delivery of the proposed actions would be reliant on the level of resources available, so there could be further adjustments in due course.

54. The Board were content to agree the draft SNH Equality Report and the scope and content of the refreshed Equality Outcomes. The Board noted that SNH’s work on National Nature Reserves will actively seek to improve access for people with protected characteristics as defined in the Equality Act 2010 during the period 2019/20.

AGENDA ITEM 13: SNH BOARD AND SENIOR LEADERSHIP TEAM DEVELOPMENT ACTION PLAN 2019/22

55. The Chief Executive introduced the paper which summarises the SNH Board and Senior Leadership Team development session held on the 28 January 2019 and presents a ‘draft’ Action Plan for 2019/22 seeking the Board’s approval.

56. The Chief Executive reflected on recent comments from the Board in relation to the information provided in the paper and the ‘draft’ Action Plan for 2019/22. The Chief Executive clarified that this is a shared endeavour between the Senior Leadership Team and the Board, and our mutual understanding of roles and responsibilities. The Board noted that the paper and Annex A will be amended following Board discussions.

57. The Board reflected on the individual roles and responsibilities of the Board and the Senior Leadership Team, and recognises this to be area that will continue to evolve.

58. Graham Boyle clarified that the information presented in the paper is a summary of the proceedings from the joint session held on 28 January 2019, and the actions captured have been drawn from those discussions. Graham Boyle suggested that a future Action Plan for 2019/22 should be informed by wider thinking and not solely based on the issues raised during the session on 28 January 2019.

59. The Board agreed that the paper and Action Plan for 2019/22 needs to be further developed. The Chair requested that sufficient time is allocated on the 7 May 2019 to discuss this further.

60. Cath Denholm agreed to review the paper and ‘draft’ Action Plan for 2019/22 in discussion with Graham Boyle. Board members will have the opportunity to feed into the process prior to the Board meeting on 7 May 2019; this will be taken forward by Graham Boyle. Action Point 02/176 Ongoing.

INFORMATION PAPERS

ORGANISATIONAL DEVELOPMENT – UPDATE

61. Jane Macdonald introduced this paper which provides an update on the work to develop the Organisational Development Framework. The paper also informs on the progress of the actions being taken to address the issues raised through the People Survey 2018.

62. The Board noted that there has been good engagement with the Change Partners, however further work is required to fully align SNH’s current work with the emerging Organisational Development Framework to identify any gaps and to support the prioritisation framework.

63. The Extended Leadership Team will meet on the 19 March 2019, with staff conferences being held during April 2019.

64. The Board noted that the contents of the paper and the key areas of focus.

FORWARD PROGRAMME AND ‘DRAFT’ AGENDA FOR 7 & 8 MAY 2019

65. The Board noted the forward programme for the 7 May 2019. The Chair requested that sufficient time is allocated for Board and Senior Leadership Team discussion on the development of Board and Senior Leadership Team Action Plan for 2019/22. Action Point 02/176

SNH BOARD FORWARD PROGRAMME OF BUSINESS FOR 2019

66. The Board noted the SNH Board forward Programme of Business for 2019 with one suggested amendment, which is to reconsider the title of the paper on Green Health Partnerships. Any Other Business (AOB)

SNH Annual Report for 2018/19

67. Alan Hampson sought confirmation on whether the Board wished to comment on the commentary section contained within SNH’s Annual Report for 2019/20, and if so, were the Board content to deal with this by correspondence. The Board agreed that there was no requirement for the Board to provide comments as this is reviewed by the Audit and Risk Committee.

68. The Chair thanked all those in attendance and closed the meeting.

END.