Local Code of Corporate Governance

Report: 6
Date: 10 April 2008
By: the Chief Executive and Treasurer

Summary

This report informs members of the development of a Local Code of Corporate Governance. 

A. Recommendation

That the Committee notes the contents of the MPA’s Code of Corporate Governance and identifies any aspects relevant to its terms of reference where it would wish to see further developmental work.

B. Supporting information

1. In October 2006 the Standards Committee were consulted on proposals by CIPFA and SOLACE to revise and update their guidance to local authorities on good practice in corporate governance. CIPFA and SOLACE have now published a framework to be used as the basis for authorities to review their governance arrangements.

2. At its meeting in December, the MPA’s Corporate Governance Committee agreed that the MPA should develop a Code of Corporate Governance based on the principles in the framework.

3. Police authorities have a dual responsibility: for ensuring they have robust governance arrangements as an organisation in their own right; but also ensuring good governance arrangements are in place in police forces, which will cover a range of aspects from finance to ethical standards that authorities are responsible for overseeing. The Framework outlines six core principles of good governance and translates each one into a range of specific requirements that should be reflected in a local code of governance. The six core principles are:

• Focussing on the purpose of the authority and on outcomes for the community and creating and implementing a vision for the local area.
• Members and Officers working together to achieve a common purpose with clearly defined functions and roles.
• Promoting values for the authority and demonstrating the values of good governance through upholding high standards of conduct and behaviour.
• Taking informed and transparent decisions which are subject to effective scrutiny and managing risk.
• Developing the capacity and capability of members and officers to be effective.
• Engaging with local people and other stakeholders to ensure robust public accountability.

4. A corporate governance code which is consistent with these principles will help to ensure and demonstrate that the Authority has proper arrangements in place so that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded and properly accounted for, and used economically, efficiently and effectively.

5. An MPA Code of Corporate Governance has been developed and was approved by the Full Authority at its March meeting. This is attached as Appendix 1.

6. Many of the elements of this code already exist, but its value will be in bringing these together as a coherent whole as well as enabling the Authority to carry out a gap analysis to identify where further work is required. The authority will conduct an annual assessment of the extent to which the aspirations set out in the Code have been met.

7. The MPA’s Corporate Governance Committee will lead on the overall implementation of the Code. However, Standards Committee members will recognise in the Code some areas and issues which are very relevant to the Standards Committee’s role, in particular paragraphs 3.2. and 3.3 of the Code.

C. Race and equality impact

1. The authority’s procedures to promote equality and diversity will become part of the MPA governance framework. The annual review of the local code will allow the authority to demonstrate how effectively these arrangements are to the governance of the organisation. Should any gaps be identified as part of the annual assessment process these may be subject to an equalities impact assessment.

2. As part of its governance framework the MPA has a number of policies and protocols, such as the Members’ Code of Conduct, the Staff/Member Protocol and policies on employees and employers’ rights in the workplace. These will be kept under regular review to ensure that they are fit for purpose for those occasions when the aspirations in the Corporate Governance Code are not met.

D. Financial implications

None specific to this report.

D. Background papers

None

E. Contact details

Report author: Simon Vile, Head of Corporate Secretariat, MPA.

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Appendix 1

Code of Corporate Governance for the Metropolitan Police Authority

Introduction

1.1 Governance is about how public authorities ensure that they are doing the right things, in the right way, for the right people, in a timely, inclusive, open and accountable manner. It comprises the systems, processes, culture and values by which organisations are directed and controlled, and through which they account to, engage with and, where appropriate, provide leadership for the communities they serve.

1.2 This Code of Corporate Governance describes how the Metropolitan Police Authority discharges its responsibilities in this respect, and particularly its two overarching statutory responsibilities:

• To secure an efficient and effective police service for the Metropolitan Police District;
• To hold to account the Commissioner of the Metropolitan Police Service for the exercise of his functions and those of persons under his direction and control.

The Commissioner has a statutory responsibility for the control, direction and delivery of operational policing services.

1.3 The CIPFA/SOLACE Framework Delivering Good Governance in Local Government sets out six core principles on which effective governance should be built:

1. Focusing on the purpose of the authority and on outcomes for the community and creating and implementing a vision for the local area
2. Members and officers working together to achieve a common purpose with clearly defined functions and roles
3. Promoting values for the authority and demonstrating the values of good governance through upholding high standards of conduct and behaviour
4. Taking informed and transparent decisions which are subject to effective scrutiny and managing risk
5. Developing the capacity and capability of members and officers to be effective
6. Engaging with local people and other stakeholders to ensure robust public accountability

1.4 The Metropolitan Police Authority is developing a framework, based on the police authority self-assessment framework, as a means of ensuring that these principles are fully integrated in the conduct of the authority’s business and to be able to demonstrate compliance.

1.5 The MPA will also be able to demonstrate that the systems and processes in place are:

• Monitored for their effectiveness in practice
• Subject to annual review to ensure they remain up to date

The Code of Corporate Governance

2.1 This Code of Corporate Governance incorporates the core good governance principles in a way that is relevant to the MPA’s role and responsibilities. It also sets out the arrangements for reviewing how effective the MPA is in following them.

2.2 The Code relates to how the Metropolitan Police Authority carries out its role. Therefore, it does not directly relate to the role and responsibilities of the Metropolitan Police Service. However, the MPA has a responsibility for ensuring that the MPS also adheres to the principles of good governance and will require the Commissioner to demonstrate that this is the case.

2.3 The way in which the MPA puts each of the core principles of good governance into practice is set out below.

The six principles

3.1 The authority aims to focus on the purpose of the authority and on outcomes for the community to create and implement a vision for the local area. To achieve this the authority will:

• Through the MPA’s Corporate Strategy make explicit how the MPA intends to add value to the provision of effective and efficient policing
• Through the Policing Plan establish policing priorities and performance measures
• Develop partnerships at borough and pan-London level to ensure that policing issues and priorities are informed by and contribute to a more holistic approach to social and quality of life issues. This includes contributing to and influencing multi-agency plans and priorities
• Decide how the service quality for users is to be measured and make sure that the information needed to review service quality effectively and regularly is available

3.2 The authority aims to ensure members and officers work together to achieve a common purpose with clearly defined functions and roles. To achieve this the authority will:

• Set out a clear statement of the respective roles and responsibilities of members and officers
• Establish terms of reference where members have specific roles, for instance as a link or portfolio member,
• Through its Standing Orders, identify those matters:
  • That will be dealt with by the Authority or one of its committees or sub-committees
  • Where MPA or MPS officers are authorised to act under delegated authority

3.3 The authority aims to promote its values and good governance through upholding high standards of conduct and behaviour. To achieve this the authority will:

• look to the MPA’s leadership to set a tone for the organisation of openness, support and respect
• ensure that equality and diversity best practice is integral to how the organisation, its members and staff conduct its business
• through the work of its Standards Committee:
  • ensure that its members are aware of their responsibilities under the Member Code of Conduct and receive guidance on ethical standards and behaviour
  • monitor key standards indicators on a regular basis
     
• ensure that those who lead or manage in the organisation are equipped with the necessary skills and that all staff are aware of the values and behaviours that the authority expects of its staff. This will be achieved through the MPA’s Improvement Programme and subsequent leadership and training programmes

3.4 The authority aims to take informed and transparent decisions, which are subject to effective scrutiny and risk management arrangements. To achieve this the authority will:

• be clear where responsibility for taking decisions lies, through explicit committee terms of reference and a scheme of delegation to the officers
• ensure that those making decisions are given sufficient information on which to take informed decisions
• ensure that equality impact assessments are carried out in respect of relevant decisions and policies
• conduct as much of its formal business as possible in public session
• specifically through its Corporate Governance Committee ensure that there is robust scrutiny of its corporate governance arrangements and procedures for managing risk. This includes oversight of the MPA and the MPS’s risk management arrangements and regular review of the corporate risk registers
• ensure that it maintains an effective policy and procedure on whistle blowing and on investigating complaints against the MPA
• develop and maintain effective arrangements to challenge and scrutinise force performance and compliance with other requirements
• ensure effective, transparent and accessible arrangements are in place for dealing with complaints

3.5 The authority aims to develop the capacity and capability of members and officers to be effective in their roles. To achieve this the authority will:

• on a regular basis assess the skills required by members and officers and commit to develop those skills to enable roles to be carried out effectively
• ensure that as far as possible the composition of the MPA’s membership and workforce is broadly representative of the communities and communities of interest in London
• maintain effective HR policies, procedures, and recruitment processes so that the requirements of a role are correctly identified and those appointed can operate effectively within that role

3.6 The authority aims to engage with local people and other stakeholders to ensure robust public accountability. To achieve this the authority will:

• produce a community engagement strategy
• develop and maintain mechanisms for engaging with local people and organisations and communities of interest on relevant issues. These will include support for community and police consultative groups and community safety boards; and participation in crime and disorder reduction partnerships and local strategic partnerships
• consult on relevant plans, policies and proposals and take account of the results of that consultation in taking decisions
• ensure that as much of its formal business as possible is conducted in public and that members of the public have the ability to ask questions or raise matters of concern at Authority meetings

Arrangements for review of governance

4.1 The authority has put in place the following arrangements to review the effectiveness of the Code of Corporate Governance:

4.2 The overall ownership of this Code rests with the MPA’s Corporate Governance Committee, which will review it annually, both in terms of whether it remains fit for purpose and to determine the extent to which the MPA has complied with it. The committee will report the outcome of this review to the full Authority with any recommendations for improvement or remedial action.

4.3 The Corporate Governance Committee oversees the arrangements for audit, risk management and health & safety within the MPS and the MPA.

4.4 Other MPA committees have ongoing responsibility for elements of the Code. For instance:

• the Standards Committee for MPA member conduct and probity issues
• the Finance Committee for financial strategy and budget management
• the Planning, Performance & Review Committee for developing the policing plan and oversight of MPS performance against its priorities and targets
• the Equal Opportunities & Diversity Board for ensuring that the MPA and MPS meet their statutory obligations under anti-discrimination legislation
• the Co-ordination & Policing Committee for the MPA’s community engagement strategy. This committee is also responsible for commissioning member-level scrutinies into specific aspects of the policing service together with member-level oversight groups on major service areas

4.5 The Authority is responsible for preparing an Annual Governance Statement under the CIPFA/SOLACE guidance. In exercising this responsibility the Authority places reliance on the Commissioner to support the internal control and risk management process as the majority of the MPA’s controls are deployed within the MPS. Hence, in exercising its statutory responsibility the Authority will place reliance on the Commissioner to deploy a separate governance statement, an Annual Assurance Statement, which will be consolidated with the Authority’s own Annual Governance Statement.

4.6. The Annual Governance Statement will include commentary on the effectiveness of the governance framework, including the system of internal control and will be informed by internal auditors and managers within the Authority who have the responsibility for the development and maintenance of the governance environment. In addition, comments made by the external auditors and other review agencies will have informed this review.

4.7 An annual review will be conducted to produce an Annual Governance Statement required to meet audit and accounting standards

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