The Finance Committee

The Finance Committee has responsibility for oversight of financial strategy and viability, preparation of financial statements, oversight of University subsidiaries and management of capital projects and university investments.

Membership

Mrs Caroline Johnstone (Chair)
Dr Neil McArthur
Mr Richard Solomons
Professor Steve Jones
The President and Vice-Chancellor (ex officio)
The General Secretary of the Students’ Union (ex officio)
Chair of Board of Governors (ex officio)

Dr John Marsh (Secretary)

Terms of reference

1. Within the scope of authority delegated by the Board of Governors, to review the financial implications of all relevant recommendations from the Planning and Resources Committee, and to advise or take appropriate action in order to ensure (on the basis of the information considered alongside appropriate assurances sought from senior managers/officers):

(a) The financial viability of the University; 

(b) That the requirements in the terms and conditions of funding with the Office for Students (OfS) and Research England to maintain financial solvency are met, and, if appropriate, to consider and report on relevant financial disclosure issues in the University’s Financial Statements;

(c) The University’s principal financial management functions reflect best financial practice, including that relating to any statutory and other external requirements and any associated borrowing requirements and insurance arrangements;

(d) That major capital projects are appropriately and satisfactorily managed;

(e) That the University’s investments, including trust funds invested with investment managers and other simple non-listed investments5, are appropriately and satisfactorily managed, including periodic review of the University’s policy on socially responsible investment. This will be considered by the Investment Sub-Committee which will be a sub-committee of this committee;

(f) That the income and spend from the new merged endowment funds are appropriately managed and are in accordance with the terms of the funds.                 

2. To consider, comment upon and forward to the Board of Governors:

(a) Long-term financial plans for the University and to set the framework within which planning and resource allocation should take place;

(b) Recommendations relating to the borrowing facilities of the University;

(c) Recommendations for amendment of the University’s Financial Regulations;

(d) The annual budgets of the University; 

(e) The University’s Financial Statements; and 

(f) The financial plans/forecasts for the Office for Students. 

3. To consider and effect amendments to the University’s Financial Procedures on report from the Registrar, Secretary and Chief Operating Officer.

4. To receive and consider any recommendations concerning the formulation, operation, expansion and/or dissolution of the University’s subsidiary undertakings1 whether wholly or mainly under the control of the University), and, where required under the provisions of Ordinance IX, to report to the Board of Governors thereon. Such consideration shall:

(a) ensure compliance with relevant legislation and other obligations and;

(b) provide assurance that the objectives of the subsidiary undertaking are consistent with the objectives of the University and that University involvement is the most appropriate way of facilitating the contribution it will make to their achievement;

(c) provide assurance that a Memorandum of Understanding or an alternate agreement ideally enforceable under law is put in place that gives a clear and unambiguous statement of the relationship between the parties and expected benefits and that the University has adequate and appropriate representation on the Board of Directors of that entity;

(d) provide assurance that any other parties to the subsidiary undertaking are reputable and financially sound. 

5. To consider and endorse significant decisions required in respect of associates and jointly controlled entities2,3.  

6. To receive reports annually on University spin out4 performance and development (oversight of University spin outs is delegated to UMI3).  

7. To consider and endorse significant decisions required in respect of other structures6.

8. To consider any other matters as directed by the Board of Governors. 

9. To review, on an annual basis and in consultation with the Board of Governors (in the context of overall governing body effectiveness), the Committee’s own performance against accepted good practice. 

10. To meet according to a pattern devised to fulfil these duties and responsibilities, which normally will require at least four meetings each year. The quorum shall be at least two lay members.   

 

Footnotes

1. A subsidiary is a legal entity that is controlled by the University. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Control is presumed to exist when the University owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. That presumption may be overcome in exceptional circumstances.

2. An associate is a legal entity, including an unincorporated entity such as a partnership, over which the University has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the associate but is not control or joint control over those policies.

3. A jointly controlled legal entity is a joint venture that involves the establishment of a corporation, partnership or other entity in which each venturer has an interest. The entity operates in the same way as other entities, except that a contractual arrangement between the venturers establishes joint control over the economic activity of the entity.

4. A spin out company is a legal entity where the University, working with relevant academics, has agreed that University owned intellectual property (IP) is transferred into a distinct vehicle usually in return for shares in order to commercialise the IP. The expectation is that this shareholding will be diluted upon the raising of investment capital and grant of share options and may ultimately lead to a financial return on the IP either by a partial or total sale of shares.

5. A simple investment is a non-listed investment set up as a legal entity and in which the University has a shareholding but due to the smaller size of shareholding and voting rights the University has neither sole control, joint control nor a significant influence. A simple investment is also not a spin out.

6. Other structures, for example certain Institutes. The University may enter into arrangements where the activity is embedded within the University’s own operations (and not a separate legal entity) but the governance arrangements require third parties to help oversee and participate in decisions over the structure’s strategy and operations.  Where these other structures have a material reputational or financial impact on the University, key decisions will be brought to Finance Committee). Material financial impact is assessed applying the same materiality as defined by the external auditors.         

Meeting dates for the year

  • Wednesday, 9 September 2020
  • Wednesday, 7 October 2020
  • Monday, 9 November 2020
  • Wednesday, 20 January 2021
  • Wednesday, 21 April 2021
  • Wednesday, 23 June 2021

Minutes

All downloadable documents are PDFs.