Governance Principles & Procedures July 2016 Revised March 2017 Revised December 2017 UNRESTRICTED Contents Principles 1 1. Purpose 1 2. Aim of the British Museum 1 3. Governance Principles 1 The Board 2 4. Board business 2 5. The Chair 3 6. Role of Trustees 5 The Director 6 7. Delegated authority 6 8. Accountability 6 9. Monitoring 7 10. Trustee – Director Relationships 7 11. Limitations 7 12. Board Reserved Powers 8 Board Committees 9 13. Permanent and Sub-committees 9 14. Standing Committee 11 15. Audit Committee 12 16. Nominations and Remuneration Committee 14 17. Management Committees 16 18. The Secretariat 16 Annexes 18 Principles 1. Purpose The British Museum Act 1963 (see Annex 1) sets out the fiduciary responsibilities1 of the Board of Trustees. The Act states that the Trustees may make rules for regulating their proceedings and for other matters relevant to the exercise of their functions. This document sets out the Board’s rules for ensuring that its statutory obligations are met and that high standards of governance are maintained. It takes account of good corporate governance practice, including government regulation and guidance. All Trustees and staff should abide by the principles and procedures in this document. 2. Aim of the British Museum The British Museum was founded in 1753 to hold a collection representative of world cultures for the benefit and education of humanity, and to ensure that the collection is housed in safety, conserved, curated, researched and exhibited. Under the British Museum Act 1963, the Trustees of the British Museum are responsible for the safekeeping and care of the collection for current and future generations, and for making it available to those who wish to see it. 3. Governance Principles 3.1 The Board will act in accordance with: the British Museum Act 1963; relevant charity and trust law; and any other legislation that applies to it. 3.2 Through its decision-making, the Board will ensure that the Museum acts in accordance with the laws, regulations and other applicable standards of good practice that apply to it as an Executive Non- Departmental Public Body. 3.3 The Board will act with integrity, transparency and impartiality, and will exercise due skill, care and diligence in performing its functions. In particular, it will abide by its Standards of Conduct Policy (see Annex 2), the Nolan Principles of Public Life (see Annex 3), and will manage any actual or potential conflict of interest appropriately (see Annex 4). 3.4 The Board will, within the resources available to it, exercise its powers in such a way that it promotes: i. the national and international role of the Museum; ii. the conservation, enrichment and care of the Collection; iii. a wide understanding of, and access to the Collection; iv. research relating to the Collection; 1 Meaning the Trustees’ responsibilities under the British Museum Act 1963. Trustees also have responsibilities from other areas of law such as the Health and Safety at Work etc Act 1974 and have fiduciary duties under common law. 1 v. the use, care and development of the Museum’s buildings and sites; vi. the reputation of the Museum; vii. transparency and efficiency in the administration of the Museum and in particular, quality in financial planning and reporting; and viii. financial sustainability, including fundraising, to enable the Museum to fulfil its aim in perpetuity. 3.5 The Board will approve a Strategy, supported by an Operating Plan and Budget. 3.6 The Board will discharge its responsibility for the general management and control of the Museum through the Director as set out in these Governance Principles and Procedures. The Board 4. Board business 4.1 The Board will usually meet four times a year, but the Chair of the Board may convene additional meetings at his/her discretion. Meetings may be held away from the Museum from time to time. 4.2 In accordance with the British Museum Act 1963, a quorum of six Trustees is required for each Board meeting. Attendance by telephone or electronic means at meetings is permitted. 4.3 On the recommendation of the Chair, the Board will appoint up to three Deputy Chairs who will share responsibility for deputising for the Chair when required. The Board will nominate one of the Deputy Chairs to assume the role of Chair in an emergency that renders the Chair unable to fulfil his or her role for any reason. Such a nomination will be on an interim basis only and should not continue for more than three months before a new Chair is appointed using the procedure outlined in 5.1 below. 4.4 The Director and Deputy Directors will usually be required to attend each Board meeting. With the approval of the Director, the Chair may also request the attendance of, or submission of papers from, any member of staff on a particular agenda item. 4.5 The Chair may seek advice from independent experts and may request their attendance for a particular agenda item. 4.6 The Board has sole authority over its agenda and exercises this through the Chair. The agenda for Board meetings will be determined by the Chair, in consultation with the Director. Any Trustee may request, through the Chair, the addition of an item to the agenda. 4.7 The Board will carry out its role with discipline, focussing on matters of strategy, performance and risk management. Board discussion should be constructive and open, and Trustees should feel free to give their honest opinion. The Chair will endeavour to obtain consensus, but may call for a vote where he/she feels it is 2 necessary. In the event of a tied vote, the Chair will have a second or casting vote. 4.8 The agenda will follow a format agreed by the Board. This will include brief reports from the Chair, the chairs of the permanent committees and the Director. 4.9 The Board will discharge its responsibilities between Board meetings by delegating authority within the limitations set out in the Governance Principles and Procedures to the Standing Committee or the Chair, whilst retaining its ultimate legal accountability for the general management and control of the Museum. 4.10 Trustees who are unable to attend a Board meeting may ask the Chair to make representations on their behalf on any matter on the agenda. 4.11 Trustees will notify the Chair before, or at, the Board meeting of any actual or potential conflict of interest that may arise in the consideration of any agenda item; the Chair will decide what action should be taken, which may include the Trustee withdrawing from the meeting, or not taking part in the discussion of the agenda item in question. A Trustee should not participate in any decision or vote held on any agenda item over which they have an actual or potential conflict. Any declaration of interest and action taken in response will be recorded in the Board or committee minutes. 4.12 Board minutes will be kept by the Secretary and will be subject to approval by the Board. Minutes will record decisions taken and identify issues raised, and will be published on the Museum’s website once approved. Unless the context clearly requires, or a Trustee requests otherwise for exceptional reasons, the minutes will not normally record the individual opinions of Trustees. 5. The Chair 5.1 Appointment of the Chair 5.1.1 The Board appoints its Chair from amongst the Trustees, exercising its powers under the British Museum Act 1963 to make rules regulating its proceedings. The Nominations and Remuneration Committee will make recommendations to the Board on the selection process for the Chair. The Chair will play no part in the selection process. 5.1.2 The Board will determine the terms and conditions of the appointment of the Chair. The total term served by the Chair shall not exceed the total term a Trustee is permitted to serve by schedule 1 of the British Museum Act 1963. 5.1.3 Any political allegiance of a Trustee will not be a bar to appointment as Chair, but he/she should not be under a party whip on taking up the appointment. 3 5.2 Role of the Chair 5.2.1 The Chair provides leadership to the Board and is responsible for ensuring that: i. the Board meets its statutory obligations, and that Trustees operate within these British Museum Governance Principles and Procedures; ii. the governance structure is appropriate, and that membership of the Board and its committees has the appropriate level of skills, knowledge and experience; iii. Board meetings are chaired effectively, making best use of the time by focussing on matters of strategy, performance and risk management; iv. Trustees have sufficient information to provide them with assurance and to help them make decisions; v. Trustees maintain the distinction between their role and that of the Director and management, in particular respecting the delegated authorities; vi. Trustees feel able to have a free and frank exchange of views, and that all are encouraged to participate, with no individual Trustee dominating discussion; vii. new Trustees receive an induction programme and that there is a regular programme of training available during a Trustee’s term; viii. conflicts of interest are managed appropriately and that Trustees follow the British Museum’s guidance note on the Register of Interests and any guidance from the Museum’s principal regulator under the Charities Act (see Annex 4); ix. the Board’s objectives, views, decisions and instructions are clearly communicated to the Director; x. the Director is held to account by the Trustees and provided with the support required to meet his/her objectives, and his/her performance is reviewed annually; xi. he/she meets regularly with the Director between Board meetings and reports to the Board as appropriate on such meetings; and xii. there is an annual appraisal of the performance of the Board and Trustees. 5.2.2 The Chair will lead the process for the appointment of the Director, but his or her appointment remains the responsibility of the Trustees as a whole and is subject to the approval of the Prime Minister. 5.2.3 The Board gives the Chair authority on all matters relating to governance. In particular, the Chair may make any decision, take any action or enter into any obligation on behalf of the Board within 4 the general spirit of these Governance Principles and Procedures. The Chair will brief Trustees promptly and report formally to the next meeting of the Board on any material or sensitive exercise of this authority. 6. Role of Trustees 6.1 Trustees are accountable to the Chair of the Board in respect of anything that they do in their capacity as representatives of the Board. 6.2 All Trustees are responsible for: i. meeting their fiduciary responsibilities; ii. operating in accordance with the Nolan Principles of Public Life and the British Museum’s Standards of Conduct Policy (see Annex 2); iii. abiding by the terms of these BM Governance Principles and Procedures; iv. abiding by the terms of the Cabinet Office Code of Conduct for Board Members of Public Bodies 2011 (see Annex 3); v. respecting the principles of collective decision-making and corporate responsibility, supporting the Board’s decisions once they have been made; vi. declaring any actual or potential conflicts of interest as soon as possible after they arise (see Annex 4); vii. respecting the boundary between the Board’s governance role and the management role of the Director and his/her senior team; viii. raising any issues of concern about the Museum’s management with the Chair of the Board, or relevant committee chair; and ix. respecting the confidentiality of Trustee business at all times. 6.3 Trustees are expected to attend at least 75% of Board meetings and the meetings of committees on which they sit, either in person, or by phone or electronic means. Apologies should be sent to the Chair of the Board or committee, or the relevant secretary before meetings. 6.4 All Trustees are expected to participate in the annual review of the Board’s performance, and to contribute to the appraisal of the Chair and the Director when requested. 6.5 Trustees may not benefit directly or indirectly, financially or otherwise, from their role as a Trustee, including being employed by the Museum for any purpose, without the approval of the British Museum’s charity regulator. 5 The Director 7. Delegated authority 7.1 The Director provides the link between the Board and the management functions of the Museum. 7.2 All Board authority granted to the management and staff of the Museum is delegated through the Director. 7.3 The Board will agree with the Director specific objectives to meet the Museum’s aims and agreed strategic priorities. These will be reflected in the Operating Plan and Budget. 7.4 The Board authorises the Director to establish any policy or practice, make any decision, enter into any obligation, take any action or develop any activity that will achieve the aims of the Museum, provided it falls within a reasonable interpretation of the Limitations and Reserved Powers in the Board’s Governance Principles and Procedures, and any other policy adopted by the Board from time to time. 7.5 The Board may change the Limitations and Reserved Powers at any time, in consultation with the Director. 7.6 If the Director judges it necessary or expedient to take action beyond the scope of the Limitations and Reserved Powers, he/she will inform the Chair of the Board immediately in writing, with reasons. 7.7 The Director has authority to recruit all Museum staff, but is expected to consult the Chair on the appointment of Deputy Directors, and may invite Trustees to be involved in the appointment process where appropriate. 8. Accountability 8.1 The Director will provide assurance on statutory compliance, adherence to policies agreed by the Board and the management of risk. 8.2 The Director is accountable to the Board for delivery of the Strategy, the Operating Plan objectives and Budget, and for observance of the Limitations and Reserved Powers. 8.3 The Director will provide oral or written reports on performance at each Board meeting. The Director will exercise his/her judgement on what should be reported to Trustees. The Director will also ensure that he/she meets with the Chair at least once a month to discuss performance. 8.4 As Accounting Officer, the Director is also accountable to the Accounting Officer of the Museum’s sponsor government 6 department and to parliament on the stewardship of the Museum’s resources. 8.5 An annual appraisal of the Director’s performance will be led by the Chair, in consultation with the Trustees. The Chair may use the services of independent advisers and consult with the Museum’s sponsor government department. The appraisal will be taken into account by the Nominations and Remuneration Committee when considering the Director’s remuneration. 9. Monitoring 9.1 The Director is expected to report to the Board on performance in delegated areas of responsibility, particularly where this has a bearing on the achievement of the Strategy, Operating Plan objectives and Budget. 9.2 The Standing Committee has the authority of the Board to review quarterly reports on the achievement of the Museum’s Operating Plan objectives, its financial position and the return on its investments. 9.3 The Board can request information on any area of the Museum’s activity at any time in order to satisfy itself that its fiduciary responsibilities are being carried out effectively. 10. Trustee – Director Relationships 10.1 Individual Trustees in their relationships with the Director and staff of the Museum should at all times respect the authority delegated to the Director. Except where directed by the Chair, an individual Trustee does not carry the authority of the Board. 10.2 If a Trustee has any concerns about the performance of the Director or staff, these should be raised with the Chair of the Board first. 10.3 Documents executed under the Common Seal of the Board will be recorded by the Head of Legal Services and authenticated by the signature of the Director or one of the Deputy Directors together with the signature of the Head of Legal Services or the Director of Resources. 11. Limitations 11.1 The Director will not normally allow any breach of the authority granted to him/her by the Board, including the delegations, the limitations set out below, or policies approved by the Board. Where this is required in exceptional circumstances, he/she must report the reasons in writing to the Chair of the Board. 11.2 The Director will: i. not deviate from the Museum’s objects in allocating the capital and resources of the Museum; 7