CFL Board Meeting Minutes November 2016

Item

Action

1.

Preliminaries

1.1

Safety moment

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

MD commented that, when driving to work in the morning, the windscreen of another car on the road, which had obviously been covered in snow that had been only partly removed, became covered again when the vehicle lurched to a stop.  This was an example of the adverse consequences of a job half done.

1.2

Apologies for absence

These had been received from Jim Stirling (JS), Albert Tait (AT) and George Taylor.

1.3

Declarations of interest

None were declared, other than those disclosed previously to the Board.

2.

Minutes and matters arising

2.1

Minutes from 17.8.16

Subject to certain amendments, these were agreed.

2.2

Action points from 22.3.16

Please see updated Action Log accompanying these minutes.

3.

Chairman's Remarks

3.1

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

3.2

New NEDs

DM reported that two new Non-Executive Directors, Susan Browell and Michael Comerford, had been approved by TS, so that he would be agreeing an induction programme for them with MD.  It was expected that they would be appointed as Directors with effect on 1.12.16.

DM/MD

12/16

3.3

Events

DM mentioned the recent local events at which CalMac had been represented including the MOD, the Rural Parliament and Interferry.  In addition, he praised management for the company's recent Living Wage Award, the winning of which showed the group's commitment to the welfare of its staff.

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

4.

Operational Performance Review - CEO's report

4.1

CFL Board meetings

MD noted that this was the first CFL Board meeting since the start of the CHFS2 contract.  This provided an opportunity for Board meetings becoming more 'operational' than in the past, with an opportunity for Executive Directors to be challenged on their areas of responsibility.

Group Boards should now consider their individual focus in the light of the impending Gourock/Dunoon and NorthLink bids and DML's existing joint venture interest in the 35 year Marchwood contract as compared with CFL's overriding operational responsibilities for ferry services to the Western Isles.

Proposals on such a change would be put to the DML and CFL Boards.

RD

14/16

4.2

Unions

MD asked CR to provide a regular report to future Board meetings on relations with the unions with which she agreed.

He asked the Board to reflect on the way in which these relations should be conducted. It was accepted that further work was required to ensure a full understanding within TS and with the Minister of the implications of any changes.

CR

15/16

BOARD

16/16

4.3

 Events (and see item 3.3 above)

MD referred to the Events mentioned by DM and commented that GM would be preparing recommendations for an events 'policy' for the next DML Board meeting on 14.12.16.

MD would be writing to the Interferry organisers about the current focus of these conferences which were concentrating too much on purely technical issues at the expense of wider ferry industry topics.

He noted that Fergus Ewing and Humza Yousaf would be joining CalMac's table at the Scottish Industry Awards next week.

GM

17/16

MD

18/16

5.

Safety Report

LdW's Report, dated 31.10.16, was noted.  Particular points raised were:-

5.1

MAIB report

LdW undertook to have answers ready in response to any recommendations that might be included in this MAIB report which was awaited following the grounding of MV Hebrides at Lochmaddy.

LdW

19/16

5.2

Ullapool

The meeting discussed the latest position reached with regard to night mooring at Ullapool [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)].  DC agreed to prepare a paper for the next Board meeting setting out the alternatives to the current night mooring arrangements.

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

DC

20/16

5.3

ISO 9001 and 14001

LdW stated that the Group did not yet fully comply with the new ISO 9001 standards and that much work was required to make sure that it did.  This process was already managed within a project programme with a view to seeking accreditation in mid-2017.  He agreed to prepare a paper for circulation to the Board setting out his requirements to achieve this and the risk of not doing so within that period.

LdW

21/16

6.

Commercial Report

GM's Report was noted.  Points specifically addressed were:-

6.1

Heb Isles and Heb

GM would be reviewing the effectiveness of the communications on these two recent incidents.

GM

22/16

6.2

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

6.3

Communities Director

GM was liaising with BF as to his requirements in his new role as Communities Director.

BF commented that he intended to hold a workshop shortly, consisting of certain CalMac executives and some Non-executive directors (including SH), firstly to review the purpose of the 'Communities Board' and how it might best be chaired and, secondly, to provide clarity on the role of the Communities Director.  Thereafter, he would produce a paper for approval at the next CFL Board meeting setting out the proposed activities of the Communities Department.

He reported that TS was now taking an interest in Communities and so he would meet with them to explain that a programme was being worked up.

BF

23/16

BF

24/16

6.4

Your West Coast

This campaign had been launched at the recent MOD and had been so well received that it was already a candidate for a DRUM award.  MD echoed the high level of appreciation which the campaign had generated.

6.5

PR plan

A PR and communications plan was being developed aimed at differentiating CalMac from other public transport services and a detailed events calendar was now available and would be circulated to those present.

GM

25/16

6.6

Channel shift

MD noted the continuing high level of phone calls still being made by passengers to CalMac and GM confirmed that steps were being taken to encourage a move to email and online ticketing.  DC pointed out the new telephone system recently installed in Gourock allowed for the immediate analysis of the reasons for calls, which should enable rich data to be produced facilitating channel shift.  Further discussions on this would be taken 'off line'.

MD/GM

26/16

6.7

Commercial Division and future reports

GM agreed to include KPIs in future reports and Board members undertook to 'visit' GM and his Division to understand more fully the activities they carried out.

GM

DM/SH/JS/AT

27/16

7.

HR Report

CR's report was noted and she highlighted the following:-

7.1

Union negotiations

The recent agreement with all four unions on the latest pay award was a major achievement.  [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

7.2

Scottish Living Wage

CalMac had been appointed the Scottish Living Wage Champion for 2016 (see item 3.3. above) and CR hoped that this could be widely publicised, especially with TS and the Minister.  It recognised CalMac's emphasis in introducing the Living Wage as compared with others in the public transport sector and its continuing encouragement of island communities.

She agreed to prepare a briefing on this to be circulated to the Board.

CR

28/16

7.3

Merchant Navy Training Board (MNTB)

CR reported on her recent meeting with the MNTB's training officer when she was told that CalMac was the best shipping company for introducing Modern Apprenticeships.  This was very encouraging since she believed that this was a good way to develop qualified CalMac staff in the future.

She was keen that wider recognition should be given to the learning and development initiatives that CFL was taking.

8.

Operations Report

This Report, dated 26.10.16, was noted and DC mentioned especially:-

8.1

Ferry summit on 17.10.16

This had been attended by CFL, CMAL, TS and Fergus Ewing and minutes from the meeting with communities were awaited so that action could be taken on the commitments then made.

8.2

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

8.3

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

8.4

MV Catriona

This vessel was now in service, though used on a route which operated for only 6 months a year.  DC and BF would consider using her at other times for one-off cruises or similar activities and possibilities in this regard were discussed.

DC/BF

30/16

8.5

Brodick/Troon/Ardrossan

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

DC reported that Alasdair Henderson was now managing the new Harbours contract.

DC

31/16

8.6

Valiant

It was hoped that this project would be closed by the end of the year.

9.

Technical Report

This Report by George Taylor was noted.  DC commented on:-

9.1

MV Finlaggan

The difficulties still being experienced in operating the mezzanine deck automatically should be resolved during the annual overhaul in early 2017.

9.2

Recruitment

It was still proving a challenge to locate suitable technical managers, but he and CR had recently interviewed 3 highly competent asset directors and SH, as an NED, would be involved in the second round of interviews when these could be arranged.

9.3

CO₂ emissions

LdW pointed out that new regulations for reduced CO₂ emissions would have to be implemented over the next 3 years and this would have an impact on the CalMac fleet.  He would be raising this issue at the next Exec Committee meeting.

LdW

32/16

10.

Finance Report

RD referred to his Report for the 3 months to 30.9.16 and highlighted the following:-

10.1

CHFS1 - 12 months to 30.9.16

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

However, vessel overhauls and replacements would be entirely at CFL's risk, so CalMac would have to be much more determined than in the past that extra costs could not be absorbed within the contract price without prior formal variation.

The CHFS1 contract should soon be closed off, though it was possible that some outstanding variations would not then be finalised.  RD asked the Executive Directors present to tell him of any new initiatives they may wish to start before the clawback was finally settled between CFL and TS.

EXEC DIRS

33/16

10.2

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

10.3

CFL half year results

Results were slightly ahead of plan after 6 months (ended 30.9.16).  RD commented on the significant elements of this outturn.

10.4

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

10.5

Internal financial reviews

These took place quarterly and were part of the Group's governance and monitoring structure.  However, management accounts would now be departmentalised so that individual department heads could be challenged and measured against budgets for their particular areas of responsibility.

10.6

Finance Department

RD said that his team were stretched at present due to their work on revising budgets contract variations and KPIs.

11.

Progress Focus

11.1

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

11.2

Learning and development update

CR tabled a paper summarising progress in this area.  She emphasised the Group's aim of providing high quality training provided, where possible, by local suppliers, which reflected a key theme in the CHFS2 bid.

The longer-term goal was to achieve Investors in People gold accreditation by the end of the new contract.  A further benefit of this initiative was to secure trained and qualified staff for CalMac into the future.

At the same time, HR was aiming to reduce training costs over the contract term by encouraging more online training and effecting other behavioural changes.

All seafarers were now required to renew at least 5 certificates every 5 years and the majority of these required within CalMac had been obtained.  This had been a project well managed.

The HR team continually attended career fairs in Scotland and 20 new trainees had started to work for the Group, though none were ships' crew.  It remained a challenge to recruit female staff for a marine career.

CR then outlined the recent achievements of the Learning Academies and the short term issues facing HR.

MD commented that some very important projects had been undertaken by CR and her team in recent years and he emphasised the fact that she and GM would be considering ways in which CalMac's image and reputation in this regard could be promoted externally (see item 7.3 above).

CR/GM

35/16

11.3

Harbour contract obligations

Agreed to carry forward to next Board meeting.

8.2.17

36/16

12.

AOB

12.1

Marketing Campaigns - Summer 2016

GM tabled some slides outlining the many campaigns launched in recent months and stated that these always aimed at achieving a rate of return of 4:1, as for Eejits, which had proved both popular and successful.  The Board congratulated GM and his team on the value and variety of these campaigns.

12.2

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

13.

Close

There being no further business, the meeting was declared closed at 1.30 pm.

Signed:                                                 Date:                           2017

D C McGibbon

Chairman