Minutes of the Meeting of the Court of Directors held on 6 April 2022

1. Minutes and Matters arising

The minutes of the meeting held on 9 February 2022 were approved.

There were no conflicts declared in relation to the present agenda.

Dido Harding updated Court on progress with recruitment for the Chair of Court and Non-Executive Director positions.

Court agreed to appoint Sebastian Walsh as a Director of the Securities Management Trust, a dormant subsidiary of the Bank, to replace the retiring Secretary of the Bank, John Footman.

2. The Bank’s response to developments in Russia and Ukraine

(Ben Biggs and Priya Mistry)

The Governor updated Court on the Bank’s response to Russia’s illegal and unjustified invasion of Ukraine.

There had been an impact on the economic environment within which the Bank sought to deliver its objectives. Increases in commodity prices would raise inflation. Those increases also increased the extent of the real income shock facing households and therefore the trade-off faced by the MPC. Financial stability concerns had also increased. The core financial system had proved resilient to the shock to date. There had been more signs of stress in commodity markets, reflecting the impact of sanctions on Russia and volatility in prices. The PRA had also responded to firms with technical issues following the imposition of sanctions. The Bank also remained alert to potential cyber risk, both as an institution and as a regulator, and had increased monitoring.

It was noted that there had been increased demands on staff and the Bank was actively managing priorities. The Chair noted that this was an example of the organisation at its best.

3. Report from ARCo

Dorothy Thompson noted that ARCo had discussed the tender process for the Bank’s auditor, which had typically been carried out every five years, the last in 2017. The current auditor, KPMG, would be coming to the end of its period under public policy regulations. Given the forthcoming changes in Chairs of Court and ARCo it had been decided to delay the tender process until 2023 – that would be well within the ten-year period required by regulation. Court agreed with this approach.

ARCo had discussed the Bank’s carbon strategy for its own operations. The intention was to publish a plan in the 2023 TFCD report and a paper would come to Court later this year.

4. Report from RemCo

The Chair thanked John Footman for his 52 years of service to the Bank and his many years as a superb and dedicated Secretary of the Bank.

5. RTGS and Update from RRC

(Victoria Cleland, Nathan Monk, Viv Leese, Stephen Brown and Afua Kyei)

• Updated RTGS Renewal Business Plan and Costs
• RTGS CNI Platform Design

Victoria Cleland updated Court on the business plan and finances for RTGS renewal ahead of industry consultation.

There had been good progress on project planning since the February Court meeting. The Bank would consult with industry on which elements of TS4 were desirable.

Court discussed governance of the programme. It also discussed risks around resourcing, particularly the Bank’s ability to recruit and retain technical expertise.

Court approved the updated budget.

6. CRDs – Update on Approach

Dave Ramsden updated Court on discussions on the Bank’s funding model, following the HM Treasury consultation.

7. Finance

(Afua Kyei, Paul McArdle and Jane Tucker)

• 2021/22 Preliminary Financial Results
• 2022/23 Budget

The Finance team updated Court on the impact of the forthcoming increase in Corporation Tax on the Bank’s deferred tax position and hence budget and discussed the Bank’s 2021-22 results. Spending was currently £15 million under budget, on account of lower than expected spending on notes production. Staff attrition and vacancies meant that the Bank was starting 2022-23 around 300 heads under budget.

Afua Kyei updated on her regular budget discussions with HM Treasury.

8. Annual Report Draft Text

(Jamie Bell, Chris Peacock, Afua Kyei, Jane Cathrall, Matt Cartledge, Jerusalem Gebremeskel and Stephen Brown)

Members were asked to submit written comments on the draft; the Annual Report would come to Court for approval in May.

9. Ways of Working

Sam Woods updated Court on the Bank’s proposed Ways of Working guidelines, which would be discussed at an upcoming Executive Operational Coordination Committee.

10. Central Services Transformation

Ben Stimson updated Court on his initial thinking on Central Services in the Bank. He will update Court in September.

11. Succession Planning

(Jane Cathrall)

Jane Cathrall provided an update on succession planning for Executive Directors and Deputy Governors.

12. Resolution Update

(Sasha Mills and Ruth Smith)

Court discussed the annual update from the Resolution Directorate, with a particular focus on its staffing model and positive culture.

13. Risk

(Stephen Brown)

• Risk Update
• Risk Attestations

Stephen Brown discussed the Bank’s risk profile and emerging risks. These included the impact on the Bank of increased workloads relating to developments in Russia and Ukraine, and increased monitoring for cyber threats.

14. Committee Appointments and Conflicts

(Melissa Davey)

Melissa Davey updated Court on the appointments process for PRC and MPC members.

15. Papers for Information

Court noted:

• MPC Report
• Governor and EDs objectives
• Houblon Norman George Fund Accounts
• Sub-Committee of Court on Banknote Machinery Procurement

The meeting of Court was closed.