Board Member Pay & Expenses Policy Laura Douthwaite Version No 5 Policy Ref Number Page 1 of 9
Aims of Policy The New Charter Group introduced payment in 2005 to compensate Board Members for the services they provide and the time they commit to the Group. In addition to this, it is also the Group s Policy to reimburse Board Members for reasonable out of pocket expenses incurred in connection with their official duties for the Group or its subsidiaries. Board Members is a collective term and shall also include Committee Members and Coopted Directors. What is considered reasonable shall be dependent on the Board Member s situation and will be determined on a case by case basis. If a Board Member is in any doubt about what can be claimed they should contact the Group Company Secretary or Governance Manager. Official duties are any duties approved by the Board, Committee or Executive Officers. The Group aims to process all payments and claims fairly and promptly within the limits set out in this Policy. Any payment is subject to compliance with current legislation and any guidance or best practice published by the Homes and Communities Agency (HCA) or the National Housing Federation (NHF). Payment levels will acknowledge the additional responsibilities and time commitments of the Chairs and Vice Chairs of the Group s Boards and Committees. It is for any new Subsidiary Boards who join the Group, after the initial decision to make payment was made, to determine whether they wish to introduce payment for their respective Board Members. Payment can only be introduced if permitted by the subsidiary s constitution. The Group Board retains the power to override the decision of the subsidiary if it feels the introduction of payment would have a positive impact on the recruitment and retention of skilled Board Members. Payment in no way constitutes employment by the Group and Board Members have no entitlement to join or be automatically enrolled in the Group s pension schemes. Any payments made to Board Members will be fully disclosed on a named basis in the organisation s financial statements. The Policy 1. Pay Board Members who are entitled to claim and wish to accept payment should contact the Governance Manager who will forward copies of the appropriate forms for completing. Details of the current payment levels are contained at Appendix 1. Page 2 of 9
Board Members who are also Resident Inspectors will not be entitled to claim payment. Payment is made in monthly instalments, on or before 15 th of each month and is subject to Tax and National Insurance, unless the appropriate exemption certificates are provided. Any payment is subject to attendance at meetings, the outcomes of the annual appraisals, compliance with the obligations of Board Members and the Group s Code of Conduct. Failure to comply with these matters may result in a Board Member s right to payment being withdrawn. 2. Expenses All Board Members are entitled to claim the following out of pocket expenses incurred whilst undertaking their official duties, this includes: a. Attendance at Group board and committee meetings; b. Attendance at other official meetings, events or business trips on behalf of the Group; c. Attendance at official conferences and training activities (either in house or external). 2.1 Travel (a) Mileage rates Board Members can claim 47p per mile for the use of a private motor vehicle. The HMRC limit before which Tax and National Insurance must be paid is 40p per mile, therefore, 7p per mile of this allowance will be liable for Tax and National Insurance (this applies to all vehicles regardless of engine size). The HMRC will not pursue the question of whether any taxable earnings might arise as a result of payments of 47p per mile to the board members who do NOT receive any remuneration from the company. Claims for mileage should be completed on a monthly basis on the Group s official claim forms. Claims should be returned to the Governance Manager who will process them for payment. Board Members who accept pay will be paid their mileage expenses in their monthly pay with tax deducted as appropriate. Board Members who do not receive pay will be paid the full amount by BACS transfer direct to their bank account. Claims over 3 months old will not be paid. Board Members must ensure that they have adequate car insurance to cover them for company business and are required, if requested, to produce their insurance certificate for inspection. Any speeding fines incurred whilst attending official business remain the responsibility of the Director. Under no circumstances will the Company pay such fines. Page 3 of 9
(b) Car parking The Company will reimburse Board Members for car parking expenses incurred in the course of official business. A receipt should be provided for re-imbursement. The Company will not be responsible for paying any parking fines or the removal of wheel clamps. (c) Public transport Standard class public transport should be used at all times unless higher class tickets can be purchased at a competitive price or unless otherwise approved by the Group Chief Executive or the Chair. Where feasible, the purchase of tickets should always be done in advance by an appointed officer of the Group. Where this is not possible a valid receipt must be obtained for reimbursement. (d) Taxis Taxis may be used if a private car or public transport is not available or is impractical. Where possible you should contact a member of the Governance Team who will arrange a taxi on the Group s account. Where this is not possible a receipt must be obtained from the driver for reimbursement. The Group will reimburse the full cost of a taxi provided it is reasonable. (e) Air travel Where Board Members are required to undertake long business trips then the possibility of flying may be considered. Each trip will be considered on its own merit and authorisation must be given by the Group Chief Executive or the Chair before a booking is made. The purchase of tickets must always be done in advance by an appointed officer of the Group. 2.2 Accommodation On occasion a Board Member may be required to stay away from home in the course of their official duties. In such circumstances reasonable accommodation will be booked and paid for in advance, for the appropriate number of nights, by an appointed officer of the Group. Any additional nights not considered necessary by the Group Chief Executive will be paid for by the Board Member. Page 4 of 9
2.3 Food & Drink When a Board Member is attending an official external event on behalf of the Group they are entitled to claim the following expenses: (a) Meals Where possible meals should be booked in advance and paid for by the Group. If this is not possible then a Board Member may take a meal up to the value contained in the tariff of expenses at appendix 2; a receipt must be obtained for reimbursement. (b) Hospitality An allowance for hospitality at external events is available for Board Members; the limits are contained in the tariff of expenses at appendix 2. Receipts must be obtained for reimbursement. Any hospitality above these limits must be approved in advance by the Group Chief Executive. Any hospitality must be reasonable and comply with the Group s Gifts & Hospitality Policy. (c) Incidental expenses Board Members are entitled to claim for incidental expenses, such as the purchase of newspapers and drinks. The limits are contained in the tariff of expenses at appendix 2; where possible, receipts should be obtained for reimbursement. 2.4 Child Care/Carers Board Members will be reimbursed for child care costs or costs for carers for elderly or disabled, partners/relatives as a result of undertaking their official duties outlined above. Costs will be reimbursed in full, on production of a valid receipt. 3. Claiming for Expenses All expenses must be claimed for on the appropriate claim forms (which can be obtained from the Governance Team) and submitted to the Governance Manager for processing. All expenses will normally be paid direct into a Board Member s bank account unless a specific request is made. On occasion a cash advance for expenses may be made available to Board Members, this is subject to authorisation from the Group Chief Executive. Page 5 of 9
Expense claims should be submitted on a monthly basis, or immediately after an event and should be supported by original receipts/vat receipts as appropriate. Where a cash advance has been made, any surplus monies should be returned to the Group. If a Board Member is booked on a conference/event and finds they are unable to attend, they should give a minimum of 24hrs notice to enable the conference/booking and any accommodation or travel tickets to be cancelled. Failure to give notice may result in the Board Member being charged the cost of any expenses incurred by the Group. 4. Monitoring and Delivery The Group Company Secretary will be responsible for ensuring the Policy is implemented fairly and consistently and that Board Members claims are submitted in accordance with the Policy. The Policy as a whole will be reviewed at least every 3 years with payment levels reviewed annually and submitted to the Remuneration & Nominations Committee for consideration, whose recommendations will be forwarded to the Board of New Charter Housing Trust Ltd for approval. The impact of payment will be assessed through the Group s ability to recruit and retain highly skilled and committed Board Members and through the Board Member Appraisal and Board effectiveness review process. Related Policies and Procedures Financial Regulations Gifts & Hospitality Policy Payments & Benefits Policy Links and Best Practice NHF - Board member pay: what housing associations need to know (2014) NHF Board Member Pay Survey January 2013 Legislation, Regulation and Standards Charities Act 2011 (Part 9) Housing & Regeneration Act 2008 (s122) NHF Code of Governance 2015 (D10-D11; G4-G5) NHF Code of Conduct 2012 (C) Page 6 of 9
Data Responsible Officer/s Date to GMT/ relevant committee/ individual subsidiary board (if applicable) Date to Trust Board (if applicable) Date of Equality Impact Assessment Date of Next Review March 2018 Laura Douthwaite 02/03/15 Remuneration & Nominations Committee 03/03/15 via recommendations of the R&N Committee Page 7 of 9
APPENDIX 1 - ANNUAL PAYMENTS APPROVED 2015/16 Payments for Board Members: Group Board Member 6,750 Subsidiary Board Member 4,000 Additional payments for Chairs: Group Chair 17,500 Subsidiary Chair 9,000 Risk & Assurance Chair 9,000 Additional payments for Vice Chairs: Group Vice-Chair 8,000 Subsidiary Vice-Chair 5,000 Risk & Assurance Vice-Chair 5,000 Payments for Co-opted Board Members: Group Co-optee 3,000 Subsidiary Co-optee 2,000 Committee Co-optee.* 2,000 * A Board Member who sits on a Board that doesn t pay its Board Members but also sits on the R&A Committee would be entitled to accept payment for this role at the same level as a Committee Co-optee Please Note: (1) Directors are only entitled to claim a Director allowance for one Board plus one additional payment if they are the Chair or Vice Chair of a Board or Committee. e.g.: Board Member X is on the following Boards/Committees: Group Director Subsidiary Director Chair of Subsidiary Vice Chair of a Committee Board Member X would therefore be entitled to claim a total of 15,750 ( 6,750 for being a Director Group Board, plus 9,000 for being Chair of the Subsidiary) (2) These payments are subject to any inflationary increase that may be applied. Page 8 of 9
APPENDIX 2 - TARIFF OF EXPENSES # Breakfast * Lunch * Dinner * Incidentals (Tea, Coffee, Newspapers etc) Hospitality (e.g. drinks) 12.00 15.00 35.00 10.00 15.00 # Where Directors are visiting an overseas country, the allowances should be proportionate to the country visited. * Allowable expenses should it not be possible to pre-book meals in advance Page 9 of 9