Financial review 2015

Governance report 2015

1 The Society’s role

The Society is the professional body and regulator of Scottish solicitors. It has responsibility for promoting the interests of the solicitors’ profession in Scotland and the interests of the public in relation to the profession. The Society’s responsibilities as a professional body and regulator are overseen by both its Council and its Regulatory Committee. The changes approved by members at the Society’s annual general meeting in 2012 provide for a Council of up to 46 seats, of which 31 are elected solicitor members, up to nine are lay members and up to six others are co-opted solicitor members. The changes to the make-up of the Council were fully implemented by the end of May 2015.

2 The UK Governance Code

The Society is a statutory body governed by the Solicitors (Scotland) Act 1980, with a constitution made under that Act and accompanying standing orders. The Society is committed to the principles of good corporate governance and seeks to comply with the relevant parts of the UK Corporate Governance Code 2010 where it is practicable given the Society’s scale and operations.

3 Strategic Management

The Society’s governing body is the Council, which sets the overall strategy as well as the annual corporate plan and associated budget. The Council this year approved the Society’s ambitious new five-year strategy, Leading Legal Excellence. The Council manages the overall strategic direction for the Society within the context of the annual corporate plan and annual budget. The Council also measures the Society’s performance against the annual corporate plan within the context of the Society’s longer-term goals set out in the new fiveyear strategy. The Council delegates the monthly oversight of the Society’s implementation of the plan to the Board. The Board is chaired by the Society’s president and is made up of the vice president, past president, treasurer and five other elected Council members. Sitting beneath the Board is the chief executive, the senior leadership team and the management team, who all work together to implement the annual corporate plan, deliver the five-year strategy as well as managing the Society on an operational basis.

4 Governance

There are a number of checks and balances within the Society’s governance model that ensure we carry out our statutory responsibilities appropriately and fairly. These checks and balances include the monthly reporting of progress on the implementation of the annual corporate plan to the Board and the Council. The oversight of the regulatory duties of the Council is carried out by the Regulatory Committee through a delegated authority scheme in conjunction with the various regulatory sub-committees and Society staff.

The Society’s Audit Committee has, as one of its main roles, responsibility for reviewing and making recommendations about the Society’s internal control and risk management system to monitor and assess their effectiveness. The convener of the Audit Committee reports quarterly to the Council on these matters as well as to members at the annual general meeting. The Audit Committee has this year benefited from the first full year of internal audit provided by Wylie & Bisset chartered accountants. The first internal audit report to be considered by the Audit Committee was on the Society’s location review project.

The Society also has a Finance Committee chaired by a Council member who is the Society’s treasurer. The Finance Committee has responsibility for producing and then presenting the annual budget for approval to the Council and then to the annual general meeting in May. There is also a Nominations Committee chaired by a Council member, which oversees the system for the appointment of members to the Society’s committees as well as making recommendations for the appointment of committee conveners.

5 Office Bearers

The Society has three office bearers: the president, the vice president and the past president. Each of these three takes office for one year. The vice president becomes president, with the handover taking place at the Council meeting in May. The office bearers together with the chief executive are the Society’s main ambassadors and represent the Society at home and abroad.

6 Chief Executive/Secretary

The chief executive’s key responsibilities include the provision of leadership and the vision necessary to create a professional body that effectively regulates and represents the interests of members and delivers a range of services and products to the profession. The chief executive is responsible for advising the Council and the Board on the development and implementation of policy as well as managing the Society’s staff and resources. The chief executive works alongside the office bearers and Council in providing effective and meaningful communications and representing the Society. The chief executive is also responsible for ensuring effective relationships with members, external bodies (including governments) at the highest level and internationally, and with all other appropriate third parties, the public and the media. The chief executive is responsible for ensuring that the respective parts of the Society’s governance structure operate effectively and efficiently.

7 Council

The Council’s responsibilities are set out in statute, the constitution and the standing orders. The principal role of the Council is to approve the strategy, annual corporate plan and annual budget for the Society. The Council also sets the most significant fees for members as well as recommending the practising certificate subscription for members to consider at the May annual general meeting. A code of conduct sets out the standards of behaviour for Council members. The chair of the Council is the president. More details about the Society’s governance arrangements are available on the Society’s website.

8 The Board

The principal roles of the Board are to:

  • provide guidance to the Society’s executive on initial drafts of strategy and the annual corporate plan – including resource plans – before their submission to the Council for approval
  • provide direction to both the executive and committees on any strategic-level initiative or project before submission to the Council for approval
  • monitor the quarterly performance of the Society against the targets in the annual corporate plan and report any major variance to the Council
  • regularly monitor the Society’s financial performance against budget and ensure that all risks identified in the Society’s risk register are managed and those the Board considers to have the potential to have a high impact on the work of the Society, and with a medium to high likelihood of occurring, are escalated to the Council 
9 The Regulatory Committee

The principal roles of the Regulatory Committee are to:

  • ensure that the standards for the profession are set by making relevant and appropriate rules, to be applied in a uniform and consistent way and regularly reviewed
  • ensure that the internal processes, policies and procedures adopted by the regulatory sub-committees are effective, appropriate, proportionate and consistent
  • build and develop relations with appropriate third parties to ensure confidence in the work of the profession and the Society’s regulatory regime

David Cullen