Minutes of the Meeting of the Court of Directors held on 11 April 2024

Gareth Davies noted that since its last meeting, the NAO’s review of the Bank’s management legal, ethical and staff compliance risks, had been published. He thanked the teams from Legal, Risk and Secretary’s directorates that supported the review, commending their openness and professionalism when engaging with the NAO.

On the findings, Simon Reason observed that the Bank had good systems and processes in place and that the Bank had an approach of continuous improvement. He added that the Bank’s aim now should be to continue broadening and deepening understanding of risk through the organisation.

Andrew Bailey welcomed the NAO’s report and the comments from the C&AG.

Court welcomed the review, it’s findings and areas of focus.

The NAO highlighted its plan for future work.

2. Conflicts, Minutes and Matters Arising

(Sebastian Walsh)

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

The minutes of the meeting held on 7 February 2024, continued on 4 March 2024, were approved.

Under Matters Arising, Sebastian Walsh highlighted updates to Matters Reserved to Court to reflect the introduction of the Financial Services and Markets Act 2023, namely the creation of the Financial Markets Infrastructure Committee. As part of these changes, Court agreed to extend the relevant indemnity to FMIC members. Sebastian Walsh also highlighted some changes to the role of NomCo.

Court approved changes to Matters Reserved to Court.

The Chair noted that HM Treasury had agreed to a small increase in pay for non-executive directors of Court, though his own would not change.

3. Governor’s Update

(The Governor, Huw Pill and Melissa Davey)

The Governor noted that Dr. Ben Bernanke had now concluded his review, titled “Forecasting for monetary policy making and communication”.

The Governor said the review was a thorough assessment of the Bank’s current forecasting approach, and the relationship between the forecast, monetary policy discussions and their communication. He highlighted the review’s finding that the data and technology systems and infrastructure supporting the forecast process needed to be upgraded and provided recommendations around how the forecast is communicated. He also noted to Court that there had been some discussion of changing the conditioning assumptions the forecast is based on, but it would not in his view be advisable for the Bank to appear to engage in making fiscal forecasts.

He added that the Bank welcomed the review and was committed to action on all of Dr. Bernanke’s recommendations. The Bank would provide an update to the public on proposed changes by the end of the year.

Court supported the Bank’s management response and the commitments of Court within it.

The Chair also expressed the thanks of Court to Dr. Bernanke.

4. Audit and Risk Committee (ARCo) Update

(Jonathan Bewes)

Jonathan Bewes updated Court on the meeting of ARCo that took place on 19 March 2024.

KPMG and the NAO updated ARCo on their year end preparations. ARCo received and discussed the risk sections of the Bank’s Annual Report and Accounts. Internal Audit updated ARCo on its future work programme, which ARCo approved. ARCo also welcomed a deep dive on procurement and asked that the forward plan for deep dives be reviewed.

The Bank’s Chief Risk Officer had presented the Quarterly Risk Report.

Jonathan Bewes added that ARCo had welcomed the independent review of the Bank’s cyber capabilities.

Jonathan Bewes concluded by noting that a particular focus at the most recent ARCo was the Finance Modernisation Programme (FMP).

5. Remuneration Committee (RemCo) Update

(Diana Noble)

Diana Noble set out that there had been one meeting of RemCo since Court’s last meeting, 26 February 2024. The focus of the meeting was on the Pensions Review, which was due to be discussed at this Court meeting.

RemCo had also considered an early draft of the Remuneration Report.

6. COO Update

(Ben Stimson)

Ben Stimson said progress was being made on the transformation agenda across Central Services, including People and CS2025, and that attrition rates across the Bank had fallen in line with other organisations.

Importantly, the Bank was on track to deliver a strategic Cloud environment in September. This was a critical milestone and enabler for the Bank’s technology modernisation, data and analytics work.

Ben Stimson also set out the progress the Bank was making in developing collective leadership.

In response to questions, Ben Stimson noted that the external Technology Advisory Group was effective and provided constructive insights and challenge to the Bank’s plans and approach to technology modernisation.

The Future FAME Programme

Court approved the Future Fame Programme. Ron Kalifa noted the importance of considering how the Bank’s large programmes would be implemented and governed.

Managed Learning Services

Court approved the framework via which to procure Managed Learning Services for the Bank.

7. RTGS Renewal Programme Update

(Victoria Cleland, Nathan Monk, Jon Rand and John Stocker)

Victoria Cleland said that the RTGS Renewal Executive Board (REB) had met on 10 April 2024.

Victoria Cleland noted that all decisions on launch date would be driven by focus on the stability of the system.

Court commended Victoria Cleland and the RTGS Renewal team for their open approach and rigorous evaluation of the situation.

Court agreed to increase the budget for RTGS to include any necessary follow-on work and contingency, delegating the management of that to Victoria Cleland. Victoria Cleland agreed to inform Court of progress against budget and seek relevant future approvals, should this be required.

8. Annual Report and Accounts text

(Jane Cathrall and Chris Peacock)

Court was invited to share reflections on a draft narrative of the Bank’s Annual Report and Accounts.

The presenting team said it looked forward to returning to Court in May with a final text.

9. Pension Review

(Jane Cathrall, Natasha Wilson and Vijay Mistry)

The Chair said that Court was being asked to decide whether a consultation with staff and the Union should take place, not on the outcome of this or the future proposal.

Natasha Wilson introduced the proposal.

Diana Noble outlined the views of RemCo.

The Chair thanked Jane Cathrall, Natasha Wilson and Vijay Mistry for their work to date on the Pensions Review.

10. Risk Update

(Stephen Brown, Sonya Branch and Rebecca Estrada-Pintel)

Stephen Brown, the Bank’s Chief Risk Officer, gave his regular update to Court on the Bank’s risk profile.

Stephen Brown discussed the Annual Risk Management and Internal Control Attestation. He highlighted changes to the corporate governance code. It was noted that ARCo would assess the relevant work required to support these changes in due course.

11. Committee Appointments and Conflicts Update

(Sebastian Walsh)

Court noted the paper and discussed future recruitments.

12. Items for Information

Court noted:

Monetary Policy Committee Report
Houblon Norman Fund (incorporating the George Fund) Annual Report and Accounts
Updated Travel and Expenses Policy
Approved minutes from Committee meetings since the last meeting of Court on 7 February 2024

The meeting of Court was closed.

These minutes are published as the record of meeting as required by the Bank of England Act 1998 as amended. Court may decide to omit information from the record in the public interest. The record of matters reported to Court may also omit information which is legally sensitive or commercially confidential.