Minutes 1
DAVID MACBRAYNE LIMITED
MINUTES OF BOARD MEETING HELD IN THE FERRY TERMINAL BUILDING AT GOUROCK, ON WEDNESDAY 18 APRIL 2012 ______
Present Mr P K Timms (Chairman) Mr D C McGibbon Mr I Gillies Mr L B MacLeod Mr N L Quirk Ms P Stark Mr C A Robertson Mr A M Lynch Mr G A Taylor
In attendance: Mr R D Hadfield, Scottish Government (Assessor) Mr G Robertson, Interim Managing Director, CalMac Ferries Ltd Mr W S M Davidson, Managing Director, NorthLink Ferries Ltd Mrs W Allardes, Managing Director, David MacBrayne HR (UK) Ltd Mr C P Paterson (Board Administrator)
Apologies: Mr D H Cannon, Group Public Affairs Manager ______
1. PRELIMINARIES
1.1 Welcome and Apologies for absence
Apologies were offered for the absence of Mr D H Cannon, Group Public Affairs Manager.
1.2 Declarations of interest
There were no further declarations of interest, other than those previously made and known to all Directors.
2. MINUTES/MATTERS ARISING
2.1 Minutes of previous meeting
Action Point 3
Mr Timms noted that the paper on the matter of Board Meeting quorums previously exhibited had been agreed in principle but not circulated due to the uncertainty of the appointment dates of the replacement Non-executive directors, which may not now return the board to its full complement until possibly September.
Mr Hadfield noted that the Minister was aware that the tenure of two Non-Executives, Mr Gillies and Mr MacLeod was due to complete at the end of April and that the Chairman’s tenure completed at the end of July. He further noted that the selection process for appointing a new Chairman and Non-Executive Directors had again been delayed.
Mr Timms noted that the reduced number of Non-Executive Directors put an additional workload on the remaining Non-Executive Directors. While Committee business could be postponed, Mr Timms noted, matters such as the Northern Isles Bid, the Group Financial Year End, and the induction process for new Directors all had to be addressed.
The Board noted that in respect of Committee Membership, the remaining Non-Executives should arrange to attend all further Committee meetings. It was requested that the re-scheduled dates of the Committee meetings be circulated. Mr Paterson agreed to provide this.
Action 1: Mr Paterson
Post meeting note: Mr Paterson circulated a note of the re-scheduled Committee Meeting dates.
David MacBrayne/Board/18 April 2012 Minutes 2
The Minutes of the Board Meeting held on 18 January 2012 were approved.
2.2 Minutes of the Special Board Meeting held on 23 February 2012
The Minutes of the Special Board Meeting held on 23 February 2012 were approved.
3. BOARD APPOINTMENTS
3.1 Approve appointment of Group Finance Director to Company Boards (p1-2)
Mr C A Robertson presented his paper on the Appointment of new Board Members. He noted that Scottish Ministers had approved the appointment of Mr R L Drummond to the Board: he asked the Board to approve this together with his appointment to the Boards of Group subsidiaries CalMac Ferries Ltd, NorthLink Ferries Ltd, and David MacBrayne HR (UK) Ltd. He further asked the Board to approve the appointment of Mrs J I Beckett to the Board of Argyll Ferries Ltd.
The Board approved the appointment of Mr R L Drummond to the Boards of David MacBrayne Ltd, CalMac Ferries Ltd, NorthLink Ferries Ltd, and David MacBrayne HR (UK) Ltd, and Mrs J I Beckett to the Board of Argyll Ferries Ltd.
The Board also noted the retirement of Mr A M Lynch from the Boards of David MacBrayne Ltd, CalMac Ferries Ltd, NorthLink Ferries Ltd, David MacBrayne HR (UK) Ltd, Argyll Ferries Ltd, Cowal Ferries Ltd and Rathlin Ferries Ltd.
3.2 Mr McGibbon’s extended term of appointment (verbal)
Although a letter from Ministers had not yet been issued, the Board noted that Mr McGibbon’s term of appointment is being extended from 1 May 2012 until 31 October 2012.
4. CHAIRMAN’S REMARKS
Mr Timms noted that the Group had not yet received formal confirmation of the recent approved fares rises from Ministers. Mr Hadfield agreed to ensure that confirmation was issued.
[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]
5. APPROVALS/POLICY MATTERS
5.1 Policy proposals for discussion with the Cabinet Secretary for Infrastructure and Capital Investment (tabled)
Mr C A Robertson introduced the matter, observing that there were two key points to note within the letter to be sent to the Minister; 1) What the message is about the direction of the Group that the Board wishes to send to the Minister, and 2) How to succeed with delivering the business propositions.
The Board indicated broad agreement with the views expressed within the letter to the Minister.
Mr C A Robertson introduced a presentation, which would be made during a Group Strategy Discussion arranged with the Cabinet Secretary for Infrastructure and Capital Investment, Mr Alex Neil, MSP, on 26 April 2012.
He highlighted Scotland’s National Objectives, as promoted by the Scottish Government, and indicated that David MacBrayne Ltd (DML) contributed to them. These were entitled ‘Wealthier and Fairer’ reflecting the enablement of businesses and people to increase their wealth and where more people would share that; ‘Safer and Stronger’ helping local communities to flourish, becoming stronger safer places to live, offering improved opportunities and a better quality of life; ‘Smarter’ expanding opportunities for Scots to succeed from nurture through to life-long learning ensuring higher and more widely shared achievements; ‘Greener’ improving Scotland’s natural and built environment and the sustainable use and enjoyment of it; and ‘Healthier’ helping people to sustain and improve their health, especially in disadvantaged communities, ensuring better local and faster access to health care.
David MacBrayne/Board/18 April 2012 Minutes 3
Examining one aspect of Mr Robertson’s presentation, the Board discussed the potential of the Renewables Industry prospective opportunity and discussed future Renewables Projects in Scotland, recognising that this could interest the Minister as he is well informed about such projects. It was also noted that carriage of freight to the Northern Isles had increased as it was thought to be recognised by the Oil and Gas Industry that it was cheaper to move freight by ferry and road rather than on Platform Support vessels from Aberdeen.
Mr W S M Davidson presented the topic of Opportunities with Partners.
The Board noted the ideas put forward by Mr Davidson. Sounding a slightly cautionary note about the potential effect on communities, the Board suggested that these opportunities could be explored with the emphasis on local partnerships. Mr R Hadfield noted that the Minister would welcome the support for local business. It was noted that the intention was to explore these concepts with the Minister in order to engage his enthusiasm and support.
In summary of all of the foregoing, Mr Robertson highlighted the four key aspects that DML would be seeking Shareholder support for. These were DML continuing to core business efforts, to retain Transport Scotland ferry contracts and improve services; Developing DML’s business while contributing to the ‘Wealthier and Fairer’, ‘Safer and Stronger’ and ‘Smarter’ Objectives; Developing DML’s business to assure the sustainability of the Group and maintenance of Shareholder value; and to Create a new dividend stream (to offset subsidies).
[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]
The Board approved the contents of the letter to be sent to the Minister.
5.2 David MacBrayne Ltd and David MacBrayne HR (UK) Ltd budgets 2012/13 (p3-9)
[FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)]
The Board approved the David MacBrayne Ltd and David MacBrayne HR (UK) Ltd budgets 2012/2013.
5.3 Approve Mr R L Drummond as Bank signatory (p10)
The Board approved Mr R L Drummond as a Bank signatory.
6. GROUP REPORTS
6.1 Chief Executive (p11-16)
Mr C A Robertson presented his report. Referring to 1.2(i) he noted that Argyll Ferries was performing well and expressed his appreciation of the efforts made to improve technical reliability. He also noted in 2.2(iv) that Terms of reference were being drawn up between the Cabinet Secretary for Infrastructure and Capital Investment and the Dunoon Ferry Users Group, for the purposes of conducting a review into the feasibility of restoring a passenger and vehicle ferry service between Gourock and Dunoon.
[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)].
1.4(ii); Mr C A Robertson noted that the expenditure of £300,000 on legal services on an annual basis led to the decision to seek tenders.
2.1(iii); Mr C A Robertson confirmed that there had still not been a response from Transport for London.
[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)].
The Board noted the Chief Executive’s report.
David MacBrayne/Board/18 April 2012 Minutes 4
6.2 Group Finance Director (p17-22)
Mr R L Drummond presented his report.
The Board noted the Group Finance Director’s report.
6.3 Group Technical Director (p23-25)
Mr Taylor presented his report.
In respect of the Improved Vessel Maintenance Strategy, Mr Taylor noted that a Project Initiation Document had been completed, which allowed the ICT Dept to examine the creation of a maintenance module reporting system.
[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)].
The Board noted the Group Technical Director’s report.
6.4 David MacBrayne HR (UK) Ltd (p26-28)
Mrs Allardes presented her report.
1. NorthLink tender
Mrs Allardes highlighted that an extensive amount of effort had been expended on the Northern Isles Tender.
2. Employee engagement
Mrs Allardes noted that there had been 23 responses to date and that these had all been of a positive nature.
5. HR
The Board noted the positive aspect of the random drug and alcohol test programme results in that there were no positive tests for alcohol.
The Board noted the Managing Director’s report.
6.5 Group Public Affairs Manager (p29-30)
Mr Cannon being absent from the meeting, the Board noted the Group Public Affairs Manager’s report.
7. ITEMS FOR NOTING
Board Committees
7.1 Group Remuneration Committee meeting (verbal)
Mr Timms noted that the Committee would meet immediately after the close of the Board meeting today to discuss organisational changes and appointments.
7.2 Minutes of Group Safety Committee Meeting (p31-37)
Mr L B McLeod presented the Group Safety Committee’s Minutes.
He was reassured to note that, despite the Passenger Access System difficulties at Craignure, safety of the operation continued to remain uncompromised.
Managing risks caused by adverse weather
Mr L B MacLeod drew the Board’s attention to the report that addressed this matter (pages 34-37).
Mr G A Taylor noted that recent weather patterns had been affected by the unusual southward
David MacBrayne/Board/18 April 2012 Minutes 5
movement of a high-altitude air current known as a jet stream. Jet streams steer cyclonic storm systems at lower levels in the atmosphere and this could result in unexpectedly strong gusts of winds. These conditions had been prevalent in incidents involving Company vessels. He noted that the Company was continuing with the installation of voyage data recorders, and although it had not been initially well-received, the advantage to crews was now being recognised.
Mr Gillies asked that it be noted that, in respect of the opening Minute, despite public transport delays, he had arrived very shortly after the meeting had commenced.
The Board noted the Minutes of the Group Safety Committee Meeting.
7.3 Minutes of Group Audit Committee Meeting (p38-43)
Mr D C McGibbon presented the Group Audit Committee’s Minutes.
Mr D C McGibbon was pleased to note that recent audits of credit card and cash expenses had not revealed any serious anomalies. It was recognised that the Group’s Expenses Procedure required to be updated to take into account the use of new technologies during the purchase of travel tickets.
Mr D C McGibbon noted that the Audit Plan for 20120-2013 was not yet finalised due to recent CalMac Ferries management changes and awaiting the announcement of the preferred bidder for the Northern Isles Public Service Contract. This would be progressed for the next meeting.
Referring to PwC’s report and the section on Customer Journeys, Mr D C McGibbon noted that the findings had been reviewed with Mr G Robertson, and that they would be discussed with Mr W S M Davidson.
In respect of Corporate Governance, the Committee’s self-review checklist was to be addressed and the annual report on the Committee’s performance would be completed in time for the next meeting.
In conclusion, Mr D C McGibbon expressed the Committee’s sincere appreciation of Mr A M Lynch’s input and support to the Committee’s business during his tenure with the Board. He also gratefully acknowledged the participation and contributions of both Mr I Gillies and Mr L B MacLeod, whose tenures as Non-Executive Directors and Committee Members complete at the end of April.
The Board noted the Minutes of the Group Audit Committee Meeting.
7.4 Minutes of Group Communications Committee Meeting (p44-49)
Mr N L Quirk presented the Group Communications Committee’s Minutes.
5. CFL
Mr N L Quirk noted that while the quality of information contained in Disruption Notices had improved, conversely, some complaints had been received from passengers that too much information was being released.
Mr N L Quirk also highlighted the importance of the forthcoming Parliamentary Reception.
Referring to the Public Transport Operator of the Year Award, Mr N L Quirk was pleased to note that CalMac Ferries had been successful in achieving a place on the short-list.
8. Community Engagement Mapping Exercise
Mr N L Quirk was pleased with the success of the mapping exercise and felt it would be a valuable contribution to preparation for the forthcoming CHFS Tender. He said that it was particularly helpful to have identified key local groups who could be engaged in the CHFS process.
The Board noted that this had been a particularly useful exercise and it was agreed that the Mapping Exercise should be distributed to the Board members. Mr N L Quirk confirmed that he would arrange the electronic distribution of it.
Action 2: Mr N L Quirk
David MacBrayne/Board/18 April 2012 Minutes 6
In closing, Mr N L Quirk gratefully acknowledged the participation and contributions of both Mr I Gillies and Mr L B MacLeod, whose tenures as Non-Executive Directors and Committee Members complete at the end of April.
The Board noted the Minutes of the Group Communications Committee Meeting.
CalMac Ferries Limited (p50-56)
7.5 The Minutes of the Board Meeting held on 15 February 2012 were noted.
NorthLink Ferries Limited (tabled)
7.6 The Minutes of the Board Meeting held on 3 April 2012 were noted.
Cowal Ferries Limited (p57-58)
7.7 The Minutes of the Board Meeting held on 13 March 2012 were noted.
Argyll Ferries Limited (p59-60)
7.8 The Minutes of the Board Meeting held on 23 January 2012 were noted.
Arran Ferries Limited (p61)
7.9 The appointments of Mr P K Timms and Mr C A Robertson as Directors, and the Minutes of the Board Meeting held on 2 April 2012, were noted.
Bute Ferries Limited (p62)
7.10 The appointments of Mr P K Timms and Mr C A Robertson as Directors, and the Minutes of the Board Meeting held on 2 April 2012, were noted.
Cumbrae Ferries Limited (p63)
7.11 The appointments of Mr P K Timms and Mr C A Robertson as Directors, and the Minutes of the Board Meeting held on 2 April 2012, were noted.
Gigha Ferries Limited (p64)
7.12 The appointments of Mr P K Timms and Mr C A Robertson as Directors, and the Minutes of the Board Meeting held on 2 April 2012, were noted.
Mull Ferries Limited (p65)
7.13 The appointments of Mr P K Timms and Mr C A Robertson as Directors, and the Minutes of the Board Meeting held on 2 April 2012, were noted.
8. ANY OTHER BUSINESS
[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)].
Mr R Hadfield advised that, as Mr G Laidlaw, Head of Ferries Unit, had been released from responsibility as sponsor of the David MacBrayne Group, he would be assuming the role. He added that another member of staff had been assigned to the Unit to help take the Sponsorship forward.
Mr P K Timms noted that a successful Dinner had been held on the previous evening and that Mr I Gillies, Mr L B MacLeod and Mr A M Lynch had all made speeches, offering their best wishes for the Group’s future.
9. NEXT MEETING
To be held on 25 July 2012 at 10 a.m. in the Boardroom at the Ferry Terminal Building, Gourock.
David MacBrayne/Board/18 April 2012 Minutes 7
10. ACTION POINTS
Action points list appended overleaf.
...... Chairman
David MacBrayne/Board/18 April 2012 Minutes 8
DAVID MACBRAYNE LIMITED
BOARD MEETING ACTION POINTS
Board Action Topic Action Responsibility Meeting No.
To circulate a note of 2.1 Minutes of previous 18/04/12 1 re-scheduled dates of the Mr Paterson meeting Committee meetings
8. Community To electronically circulate a copy 18/04/12 Engagement Mapping 2 Mr Quirk of the Mapping Exercise Exercise
David MacBrayne/Board/18 April 2012