20 June 2019 - Minutes of the meeting of the Board of Commissioners

Location: Victoria Square House, Birmingham (Boardroom).

Commissioners:

Bill Moyes (Chair)
John Baillie
Stephen Cohen
Alison Hastings (from 11:10)
Sarika Patel
Trevor Pearce
Simone Pennie
Jonathan Scott
Catharine Seddon

Executive directors:

Vic Beaumont
Paul Hope
Philip Lloyd
Neil McArthur
Tim Miller
David Pemberton
Helen Venn
Richard Watson

In attendance:

(REDACTED) (Legal)
(REDACTED) (notes)
plus attendees for specific items

External attendees:

(REDACTED – Chair, Digital Advisory Panel

Apologies:

Carol Brady

Welcome, apologies and declarations of interest

There were no new declarations of interest.

1. Minutes, rolling actions, forward look, and Chair’s business

The minutes of the meeting held on 16 May 2019 were approved, subject to the redaction of the sentence under item 3.3, bullet point 4: ‘John Tanner has been appointed as the new Executive Director for 4NLC, as of early 2019 (exact date to be confirmed).’

The rolling actions were reviewed, and updates agreed.

The forward look was reviewed and updates agreed.

Chair’s business: the Board noted the paper, in particular the following points:

Commissioner appointments

The Invitation to Tender (ITT) has been sent out to head-hunters. Questions around reappointments will be revisited at the end of 2019.

Meetings with High Impact Operators (HIOs)

The tone of recent meetings with BuzzBingo and bet365 has been positive and productive. Neil McArthur is planning to host a roundtable with Operators later in the year and it was suggested that Bill Moyes and Neil McArthur should meet with less ‘compliant’ Operators going forward, as well as those who are working well and tackling problem gambling.

The Board formally agreed the proposed recommendation to appoint Shane Carmichael to the Advisory Board for Safer Gambling.

2. Advice to Ministers re Society Lotteries Consultation

The Board noted the Advice on Society Lotteries paper.

3. 4NLC Corporate Adviser contract award

The Board noted the report.

4. Finance Report

The Board noted the report.

5. Audit and Risk Committee Annual report to Board

The Board noted the report, in particular the following points:

the Committee are confident around the assurances received from Executives and controls
a lot of work has been carried out on the Corporate Risk Register and Board Assurance Framework and the Committee are pleased with the maturity of the report and feel they are now in a better place to understand and mitigate risk
with reference to paragraph 55 in the report, the National Audit Office (NAO) and KPMG have categorised system access as a medium risk however, taking into consideration management assurances as outlined in paragraph 55, the Committee believes this is low risk but will follow up to gain appropriate assurance.

The Chair (Bill Moyes) and Accounting Officer (Neil McArthur) approved the annual report and accounts for 2019/2019 and will sign, on behalf of the Board, the letter of representation to the National Audit Office (NAO).

Bill Moyes thanked the Audit and Risk Committee members for their hard work on the report.

6. Final 2018/19 Annual Report and Accounts

The Board noted the draft annual report and accounts, with no further changes.

The Board approved Bill Moyes to sign-off on the report and accounts, to be forwarded to DCMS on 20 June 2019 for Ministerial sign-off by 1 or 2 July 2019, prior to Accounting Officer (Neil McArthur) sign-off on 2 July and National Audit Office (Comptroller) sign-off on 3 or 4 July 2019.

Bill Moyes formally thanked the Comms team for all their hard work on the report.

7. Money-Laundering Reporting Officer’s (MLRO) Annual Report to Board

The Board noted the paper, in particular the following points:

the MLRO report is the first paper of its kind to Board concerning the discharge of legal duties between July 2018 and May 2019. Future reports will cover the full 12-month period
the report confirms that no breaches of the sanction regimes have occurred over the period July 2019 to May 2019
the Board welcomed that the MLRO team have provided Anti-Money Laundering training to 358 colleagues and have released internal guidance for employees during this period
Licence Conditions and Codes of Practice (LCCP) requirements are in place for Operators in jurisdictions other than the UK, who have a duty to match legislative requirements in the UK.

Bill Moyes thanked Richard Watson, the MLRO and team for all their hard work on the report.

8. Update on Annual Assurance Statements (AAS)

The Board noted the update.

Helen Venn presented a set of slides (available in the Diligent Board Reading Room) which gave an overview of the three-year pilot, pulling out key points from the last AAS submissions in December 2018 and looking at how we want to further develop the process.

Further points were highlighted as follows:

recommendations following the December 2018 workshop have been incorporated in the ongoing work together with engagement and collaboration workshops
there has been significant progress by operators over the last three years with a marked change in culture
an Operational Risk Business Intelligence Tool (Orbit) is a work in progress which visually illustrates individual Operator risk rating. Bill Moyes requested that when the tool is operational he and Neil McArthur receive a relevant copy of the Orbit report on visits to Operators going forward. Also, that visits include those to less ‘compliant’ Operators to provide a better balance
AAS RAG ratings will not necessarily ‘match’ the RAG rating we give to the Operator. This is because the AAS is the Operators self-assessment and the Operator RAG rating takes into account all of the information we hold in relation to the Operator which will include the AAS
there was a brief discussion around feedback to Operators on submissions. The Board would prefer feedback to be formalised in written form only and, if need be, to be signed off by the CEO/Chair in some cases. There is a need to ratchet up holding the Boards of Operators to account and also getting Non-Executive Directors and Chairs of Audit Committees involved in addition to Chairs and CEOs
evaluation of the Assurance Statement (AS) pilot by Chrysalis concluded that the majority of pilot participants found the process useful and worthwhile
During the summer of 2019, the Commission will publish a report on the outcomes of the AS pilot, to include: Aims of the pilot, numbers participating, overview of cycles, lessons learned, evaluation (including Chrysalis evaluation) and future direction.

Actions: Tamsin Morgan to work on a plan for the Chair and CEO to visit less compliant Operators as part of the HIO stakeholder planning. Governance to liaise with Helen Venn to establish a 2019 AAS workshop date.

9. National Lottery Competition Committee update

The Board noted the update.

10. Workshop session: Mobile Gaming and the role of the Digital Advisory Panel

Not minuted.

11. Review of the meeting

The Board were of the opinion that the meeting had been a good one, enhanced by a smaller number of participants and that the papers had been well balanced and of good quality.

All Commissioners have responded to Deloitte’s draft Board Effectiveness Review (BER) with no objections. Bill Moyes proposed, and the Board agreed, that he will meet with Vic Beaumont in early July 2019 to follow up on process and that a working group will be formed comprising Bill Moyes, Catharine Seddon, Neil McArthur and Vic Beaumont, to proceed with next steps. There will be a half day Board workshop in September 2019, if feasible, to look at each recommendation from the report in detail and then to take final decisions to the Board in October 2019.

Action: Governance to schedule a BER workshop in September 2019.

12. Any Other Business

There was no other business to report.

13. Closed SID session – Commissioners only