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CFL Board Meeting Minutes | March 2016 | CalMac Ferries

CALMAC FERRIES LIMITED

 

MINUTES OF BOARD MEETING HELD IN THE BOARDROOM,

GOUROCK, AT 1PM ON WEDNESDAY 22MARCH 2016

___________________________________________________________________________

 

Present                          Mr D C McGibbon, Chairman

                                      Mr S Hagan    

                                      Mr J Stirling

                                      Mr A V Tait

                                      Mr M Dorchester

                                      Mr R L Drummond

                                                           

In attendance:               Ms C Roberts, HR Director, David MacBrayne HR (UK) Ltd

                                      Mr P Breslin, Technical Director (Interim), CalMac Ferries Ltd

                                      Ms J McConnachie, Commercial Director (Interim)

Mr P Osman, Company Secretary (Interim)

                                      Mr C Paterson, Board Administrator

____________________________________________________________________________________

 

1. PRELIMINARIES

 

1.1   Safety Moment

 

Mr McGibbon noted that he had attended a Safety Seminar at Ingliston on 16 March, along with Directors and senior managers.

 

Welcome

 

Mr McGibbon welcomed Ms Roberts, Mr Breslin, Ms McConnachie and Mr Osman to the meeting.

           

1.2   Apologies for absence

 

There were no apologies.

 

1.3   Declarations of interest

 

There were no further declarations of interest, other than those previously made and known to all Directors.

 

2. MINUTES/MATTERS ARISING

 

2.1       Minutes of previous meeting 11 November 2015

7. Appendices

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

 

The Minutes for the Board Meeting held on 11 November 2015 were approved.

 

Action Points

The two Action points were noted to be closed out.

 

2.2       Matters arising

 

There were no matters to record.

 

3. CHAIRMAN'S REMARKS

Mr McGibbon noted that two Non-Executive Directors, Ms Stark and Mr Easton, had resigned on 31 December 2015 and 31 January 2016 respectively. He had spoken to the Minister for Transport and Islands, Derek Mackay MSP, as well as Transport Scotland, and it had been conveyed by Mr McGibbon how much the two Non-Executive Directors' efforts had been appreciated.

Mr McGibbon noted that Ms Stark had been Chairman of both Safety and Audit Committees for more than six years in total and Mr Easton's passion for good safety culture had been very much appreciated.

 

Mr McGibbon noted that governance would be maintained and that the Committees' membership would be amended. Mr Tait would become Chairman of the Board Audit and Risk Committee and Mr Hagan and Mr Stirling would join as new members. Mr Stirling would remain Chairman of the Board Safety Committee and Mr Tait would join as a member. Mr McGibbon will step down from his role as Chair of the Remuneration Committee after the announcement of the CHFS tender.

Mr McGibbon noted that the Bid submission had been made and thanked Mr Drummond and the Bid Team for the large amount of work undertaken to prepare the Bid. He noted that the Board had gained a good understanding of the implications of the bid.

 

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

Mr McGibbon noted that the Wemyss Bay refurbishment works were expected to be completed on time.

 

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

Mr McGibbon noted that the Chairman of the Pension Fund Trustees, Mr Johnson, had been corresponding with Transport Scotland and that the Trustees were preparing their annual submission to the Pensions Regulator.

Mr McGibbon noted that, following reappointment appraisals, Mr Hagan, Mr Stirling and Mr Tait had all indicated that they were willing to be reappointed to their posts as Non-Executive Board Members when current tenures end. Mr McGibbon welcomed the unanimous response by all of the Non-Executive Directors and their re-appointments would be progressed with Transport Scotland.

 

4. OPERATIONAL PERFORMANCE REVIEW

 

4.1 SAFETY AND MANAGING DIRECTOR'S REMARKS

 

Mr Dorchester indicated to the Board that he would be introducing a new presentational meeting format to the Board. He noted that there would be a change to the papers, with a focus on them providing a more operational approach. He also proposed that Heads of Departments could attend meetings, with a view to presenting their papers.

Mr Dorchester noted that he had had a meeting with Mr Laidlaw. Various matters had been discussed, including Oban Port Traffic Management, the Brodick Port construction and developments that would result in them being paid for in the new CHFS2 contract. He noted the importance of the Company managing change, rather than change driving the Company.

Mr Dorchester noted that it would be beneficial to meet with Transport Scotland's Director of Finance, Mr Mike Baxter, to discuss duplicated costs that arise with both the Company and CMAL.

Mr Dorchester indicated that Mr Collier had provided him with a note about Marine Scotland, the option of exploring the challenges faced by sister agencies and pooling resources.

The Board discussed the possibility of organisational change across government agencies, the potential collaboration of certain agencies under a group arrangement after October 2016 and how they might work together.

It was noted that certain agencies do not interact with the public in the way that the Company does, and therefore do not face the same challenges. Whilst costs reduction could be achieved by operating a group organisation, other benefits would require to be identified.

 

4.1 FINANCE REPORT

 

Mr Drummond presented his report.

 

2. Key Group Financial Numbers 5 months to 29 February 2016

Mr Drummond noted that the results were showing a significant positive variance to plan, resulting in a potential Clawback of [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)], at this point. He attributed the variance due to positive results in Farebox revenues, Fuel price, Pension outlays, Transformation Programme underspend and a lower headcount than planned in Support Services.

3. Group Balance Sheet 11 months to 29 February 2016

Mr Drummond noted that results had led to a subsidy Clawback of [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)]. The Board discussed the results, noting that Transport Scotland had not yet offered direction on the Clawback.

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

 

The Board discussed the Debtors figure and dividend payments.

Mr Drummond noted that Contract year 9 results should be satisfactory, if carryings remain on track.

 

5. PROGRESS FOCUS

 

MARKETING PRESENTATION

 

Ms McConnachie presented a new marketing campaign.

Ms McConnachie noted that it had been identified that focus was needed to attract the twenties age bracket to travel in the network. A social media campaign had been devised and a mascot designed. Mr Dorchester noted that the age bracket of 18-25 year-olds had been targeted. Marketing demographics usually focused on an older age bracket and there was a challenge in successfully bringing a message to a younger traveller. 

Ms McConnachie noted that there was an evolution of work being done which would lead into CHFS2. There was a need to engage with stakeholders, but it was a complex picture. Standard messaging was key, using digital media and PR.

Ms McConnachie noted that Corporate Social Responsibility was being developed with partners, such as Generation Science, Project Trust, Orca Partnership, Gàradh a' Bhàgh a' Tuath charity, Barra Changing Places and the Vital Spark.

The Board and Ms McConnachie discussed how to measure the success of campaigns and marketing projects.

Ms McConnachie ran a video presentation for the Board. She noted that it had more focus on specific audiences and not a generalised approach.

Mr Dorchester noted that capturing the return on investment and improving how the Company advertised success were important factors.

The Board discussed the definition of 'customer satisfaction'. The Board also examined the additional benefits provided to customers and considered the value to the Company in terms of business growth and revenue.

Ms McConnachie additionally noted that a very significant number of page views had been generated by the refreshed Company website.

The Board considered the matter of external communications around the challenges that will result from the Contract award announcement by Ministers. Mr Dorchester confirmed that a Board Pack will be issued to ensure consistent messaging.

Ms McConnachie noted that media training was available and the Board agreed that an arrangement should be made for this to be provided in May.

The Board noted that it was important to present a higher profile to communities and discussed their reactions during the consultation period in respect of Bid preparation.

Ms McConnachie noted the Marketing strategy in preparation for CHFS2, which was being evolved currently, to address:

 

· Investing to protect revenue

· Targeting visitors based on interests

· Digital development

· Building relationships with Tourism organisations

· Optimise the value of key deliverables

 

Ms McConnachie took the Board through highlights of new brochures.

 

7. APPENDICES 

 

The Board noted the appendices to the Managing Director's summary.

 

ANY OTHER BUSINESS

 

Vessels

Mr Stirling noted that a Wood Group employee had been involved in a recent incident on board a vessel during an annual overhaul. Mr Dorchester noted that it would be worth clarifying the frequency of marine support visits to vessels.

 

Reports

The Board discussed the appendices. Mr Dorchester noted that future appendices would be limited to one page per Head of Dept. It was also noted that Future Planning is currently limited to the existing Contract and cannot be Bid-related at this point.

 

Newbuilds

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

 

Mr Breslin noted that MV Catriona was anticipated as being handed over in mid-June.

Mr Drummond noted that crew costs would be re-charged to CMAL from 21 May.

Mr Dorchester thanked Mr Breslin for completing the overhaul programme, despite a number of delays and issues arising.

 

Network

Mr Tait commended Mr Moran for introducing the daily network performance management conference call, noting that it was providing useful insights into daily issues.

Safety

Mr Dorchester thanked the Board for attending the Safety Meeting at Ingliston. He noted that the Safety Team would be doing training at the next meeting.

 

Board meeting structure

The Board discussed possible improvements to meeting structures.

 

8. NEXT MEETING

 

To be held in the Boardroom at Gourock on 11 May 2016.

 

.........................................

Chairman

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