Development Bank of Wales Plc
Board
Terms of Reference 2025
Reviewed and approved by the board date:
30.04.2025
1. CONSTITUTION
1.1 The Development Bank of Wales group (‘group’) comprises Development Bank of Wales Plc (‘DBW’) and its direct and indirect subsidiary companies.
1.2 This document sets out the role and responsibilities of the DBW board (‘board’) in accordance with the articles of association and Welsh Government framework.
1.3 The responsibilities of the board include adhering to a formal schedule of matters reserved for the decision of the board.
2. PURPOSE
2.1 The purpose of the DBW board is to provide effective leadership and direction to the group, ensuring its long-term success and sustainability. In accordance with the Companies Act 2006 and regard to the UK Corporate Governance Code 2024, the board is responsible for:
2.1.1 Promoting the success of the group: Acting in good faith to promote the success of DBW for the benefit of its members as a whole, considering the long-term consequences of decisions; the interests of employees; the need to foster business relationships with Welsh Government, suppliers, customers, and others; the impact of the group's operations on the community and the environment; maintaining high standards of business conduct, and acting fairly between members.
2.1.2 Setting strategic direction: Defining and developing the strategic direction of the group, setting challenging objectives, and ensuring that the necessary resources are in place to achieve these goals.
2.1.3 Ensuring effective risk management and internal controls: Establishing and maintaining an effective risk management and internal control framework, and monitoring and reviewing its effectiveness regularly.
2.1.4 Compliance and accountability: Ensuring compliance with legal and regulatory requirements, upholding high standards of corporate governance, and being accountable to shareholders and other stakeholders.
2.1.5 Monitoring performance: Overseeing the performance of the group, ensuring that it meets its aims, objectives, and performance targets, and keeping stakeholders informed of any significant changes that may impact the group's strategic direction or performance.
3. MEMBERSHIP AND ATTENDANCE
3.1 Members of the board shall be appointed by the board, on the recommendation of the nomination committee in accordance with the Companies Act 2006 and the articles of association of DBW. The majority of board members shall be independent non-executive directors.
3.2 Only members of the board have the right to attend board meetings, however, other individuals such as senior management and external advisers may be invited to attend all or part of any meeting as and when appropriate.
3.3 The board shall appoint the chair. At the time of appointment as chair, the director concerned shall be an independent non-executive director. In the absence of the chair, the remaining members present shall elect one of themselves to chair the meeting.
3.4 The board shall, at their discretion, invite other persons to attend the meetings to provide information so as to assist the board in the discharge of its duties. For the avoidance of doubt, such persons shall not be entitled to vote on any resolutions of the board.
3.5 All members of the board shall be advised of the business to be transacted at any meeting even if they are unable to be present.
4. SECRETARY
4.1 The company secretary or their nominee shall act as the secretary of the board and will ensure that the board receives information and papers in a timely manner to enable full and proper consideration to be given to the issues.
5. QUORUM
5.1 The quorum necessary for the transaction of business shall be not less than three members of the board, two of whom must be independent non-executive directors. A duly convened meeting of the board at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the board.
6. FREQUENCY OF MEETINGS
6.1 The board shall meet at least five times a year and otherwise as required.
7. NOTICE OF MEETINGS
7.1 Meetings of the board shall be called by the secretary of the committee at the request of the chair or any of its members.
7.2 Unless otherwise agreed, notice of each meeting confirming the venue, time, and date together with an agenda of items to be discussed, shall be forwarded to each member of the board and any other person required to attend no later than five working days before the date of the meeting. Supporting papers shall be sent to Board members and to other attendees, as appropriate, at the same time.
8. MINUTES OF MEETINGS
8.1 The company secretary shall minute the proceedings of all meetings including the names of those present and in attendance.
8.2 Draft minutes of board meetings shall be circulated to all members of the board and attendees. Once approved, minutes should be circulated to the company secretary or their nominee unless, exceptionally, it would be inappropriate to do so.
8.3 The company secretary shall record any conflicts of interest reported at the meeting.
9. ENGAGEMENT WITH SHAREHOLDERS
9.1 The chair should attend the annual general meeting to answer any shareholder questions on the board’s activities. In addition, the chair should seek engagement with shareholders on significant matters related to the board’s areas of responsibility and provide assurance to the Welsh Ministers that it has applied the principles of the remuneration policy framework, with support from the remuneration committee, in a fair and responsible manner.
10. DUTIES
10.1 The board will shape a strategic plan/corporate plan which identifies how the operations of the group will contribute toward the policy aims and goals as set out in the programme of government and as reflected in the remit letter issued by the Welsh Government (5 yearly basis).
10.2 The board in addition to the powers and duties of directors set out in the Companies Act 2006, the articles of association and the matters reserved for the board, the role of the board is to:
10.3 provide effective leadership; defining and developing strategic direction and setting challenging objectives
10.4 obtain assurance that all legal responsibilities are complied with
10.5 monitor performance to ensure the DBW meets its aims, objectives, and performance targets and ensure that the Minister and Partnership Team are kept fully informed of any changes that are likely to impact on the strategic direction of the DBW or on the attainability of its targets, and of steps needed to deal with such changes
10.6 promote high standards of public finance and risk management and uphold the principles of regularity, propriety, and value for money and the Nolan principles and support the chief executive, as accounting officer, in ensuring the same throughout the DBW
10.7 through the work of the nomination committee, make senior executive and non-executive appointments to the board, including the chair and chief executive officer. The board will inform the Welsh Government’s partnership team before appointing the chair, the chief executive officer, and all other senior executive and non-executive appointments
10.8 ensure DBW considers equality of opportunity when approving policies and making decisions.
10.9 The personal responsibility of the chief executive officer as DBW accounting officer in no way detracts from the duties of the board who have a duty to act in a way which promotes high standards of public finance, effective manner. However, the board must ensure any instructions given to the chief executive officer do not conflict with their duties as the accounting officer.
10.10 The board may delegate to staff responsibility for the administration of day-to-day management issues, but it remains ultimately responsible and accountable for all those matters. DBW must maintain a list of matters which are reserved for decision by the board, as well as the framework of delegations approved by the chief executive officer.
10.11 The board should also have regard to the senior managers and certification regime of the Financial Conduct Authority.
12. REPORTING
12.1 The board chair shall provide feedback to the shareholders at the AGM on all matters within its duties and responsibilities.
12.2 The board shall provide a description of its work in the annual report in line with the requirements of Companies Act 2006 and should consider the guidance within the UK Corporate Governance Code 2024.
13. OTHER MATTERS
The board shall:
13.1 at least once a year review its own performance, constitution and terms of reference to ensure it is operating effectively with the support of the nomination committee
13.2 be provided with appropriate and timely training, both in the form of an induction transition plan for new members and on an ongoing basis for all members.
14. AUTHORITY
The board may obtain independent professional advice at the expense of the DBW if it considers this necessary. Arrangements for this advice should be channelled through the company secretary.
FURTHER READING
Companies Act 2006
https://www.legislation.gov.uk/ukpga/2006/46/contents
Articles of Association
FCA Corporate Governance Code
https://www.frc.org.uk/library/standards-codes-policy/corporate-governance/uk-corporate-governance-code/
FCA Guidance on the Corporate Governance Code
https://www.frc.org.uk/library/standards-codes-policy/corporate-governance/corporate-governance-code-guidance/
Effective Board Reporting
https://www.cgi.org.uk/resources/technical-library/guidance-notes/corporate/effective-board-reporting/
