The BRE Trust

Trustee Handbook

Please note that this Handbook and all of the documents referred to herein can be obtained from the Secretary or downloaded from the Member’s private area of the Trust’s web site.

  1. Overview

The BRE Trust[1] was established in March 1997 immediately following the privatisation of the Building Research Establishment, an Agency of the then Department of the Environment. Recognising BRE’s influence on government and in the market place and thus the need for it to retain independence from either shareholder or customer influence, it was a requirement of privatisation that BRE be privatised into a ‘not for profit’ body governed by a representative range of built environment stakeholders.

The purpose of the BRE Trust is to hold ‘in trust’ the ownership of BREGroup of trading companies, supportingtheircontinuing development as a national asset, and to receive their profits and any income from third parties which it then spends ‘for the public good’, in line with its charitable objects.

The core purpose of the BRE Groupof trading companies is to act as a National Centre of Excellence for all things relating to the built environment and to do so commercially and in a manner which maximises profitability in the medium term. By BRE Group being commercially successful and gift aiding its profits to the Trust, the Trust justifies to the Charities Commission its continued ownership of BRE Group.

The Trustees have a dual role, that of Trustees of the Charity and directors of the Charitable Company. The Trustees, both individually and as a body, thus share all of the responsibilities of both CharityTrustees and company directors.

The split between Charity and trading companies is not that unusual,as it is difficult for a Charity to achieve tax exemption and legally manage risks where it trades itself, but it doesrequire carefully designed governance arrangements. In our case, with a few relatively minor difficulties,our arrangements havebeen regularly reviewed and have worked well over the years.

The trading companies, collectively referred to as ‘BRE Group’, or simply ‘BRE’, are owned by the Trust through its 100% ownership of the holding company BRE Group Ltd. The BRE Trust delegates the management of the trading companies to the Board of BRE Group Ltd.

Unlikethe typicalcommercial corporate arrangements you may be more familiar with, the Trust, whilst it 100% owns the Group, does not operate as a holding company or a supervisory board, both of which would be inconsistent with Charity Commission guidance that, in particular, Trustees and employees of the trading companies should remain un-conflicted (i.e. no employee is a Trustee and no Trustee a trading company director) to help ensure that the propriety of transactions between the Charity and trading companies are neither questioned nor challenged and to demonstrate that the Trustees put the interests of the parent Charity first.

That said, the Trust clearly relies on the good governance of the BRE Group to enable it to discharge many of its own legal and governance responsibilities, for example to the Charities Commission as the sole owner / shareholder of BRE Group Ltd.

The BRE Group governance arrangements are designed to meet the needs of the Trust as owner and to provide maximum confidence of the Trust in the Group Company and all of its subsidiaries. To meet these twin objectives the BRE Groupadopts the principles of governance as set out in the ‘UK Corporate Governance Code (CGC)’ by the Financial Reporting Council (FRC). These principles have been translated into a comprehensive code of governance, the “BRE GroupCorporate Governance Structures and Arrangements”

In the case of the BRE Trust itself, it adopts the principles of governance for charities as set out in ‘Code of Governance for the Voluntary and Community Sector’ published by the Charities Commission. These principles have been incorporated into this handbook which, amongst other things, sets out the detailed governance arrangements of the Trust.

Taken together, these arrangements are designed to providenot just good governance per se but also to provide transparent assurance to the Trustwherebythey canfully meet their obligations in overseeing their ‘investment’ in BRE Group. Clear governance and clear boundaries in terms of operational independence for the directors of BRE Group minimise the risk of the Trusteesinadvertently becoming ‘shadow directors’[2].

  1. The BRE Trust

The BRE Trust is a Charitable Company Limited by Guarantee (Company Number 3282856) registered with the Charities Commission for England and Wales (Registered Number 1092193) and with the Office of the Scottish Charity Regulator (Registered Number SC039320).

As a Charity, the Trust’s activities must at all times conform with the statement of ‘objects’ as set out in the Memorandum and Articles of Association;

The Company’s objects are, for the public benefit:

a)to undertake, commission and support research in areas of science, engineering, information technology, management and economics associated with the built environment, including its processes and artefacts;

b)to advance knowledge, innovation, and communication, and to promote education and excellence, in all such matters, and to collect, collate and publish useful information, ideas, and data relating thereto; and

c)to undertake, commission, facilitate and support carbon emission reduction projects and such other activities and services as are beneficial to the built environment and charitable in law

Through its ownership of BRE Group Ltd the Trust wholly owns the Group’s subsidiary companies BRE, BRE Global and FBE Management Ltd (an overview of the corporate structure is set out in Annex 1). These companies gift-aid their taxable profits (after retaining some profits free of tax through the R&D tax credits mechanism to fund, or partly fund, any growth in working capital requirements) to the Trust to be used in furtherance of the Charity’s objects and for no other purposes. As the owner of these companies the Trust has an obligation in law to act in a way most likely to promote the success of the business.

This ownership structure means that:

  • BRE Trust has the flexibilities and freedoms as a Charity to promote its objectives for the public good.
  • BRE Group companies can maintain their independence from sector or political interests and pressures, act for the commercialbenefit of all built environment stakeholders and are free to develop as businesses.
  • The corporate structure is clear and extensible with responsibilities and risks clearly defined.
  • Taxation can be minimised whilst accommodating the assets, loans and necessary cash flows between companies.
  1. Governance of the BRE Trust

Composition of Council

The governing body of the BRE Trust is its Council. The Council consists of ‘Members’ who are in law both Directors of the Charitable Companyand Trustees of the Charity.

In accordance with the Articles of association the Council are required to ensure that, “taken as a whole and in so far as reasonably achievable, the Council consists of a group of persons having expertise in, and knowledge of, a broad range of sectors of relevance to the built environment.”

Trustees are appointed to Council in accordance with bye-law R1of the Articles of Association. On appointment Trustees the Secretary arranges an ‘Induction’ to both the BRE Trust and the BRE Group including a tour of the Garston site and its associated facilities. If you are unfamiliar with the responsibilities of Directors and / or Trustees and consider that training may be appropriate you should approach the Secretary who will be pleased to make the necessary arrangements.

The Council has put in place arrangements by which a selection of those who hold defined positions within the BRE Trust Group companies shall be invited to attend Council meetings as ‘Invited Members of Council’ as set out in bye-law of the Articles of Association.

Invited Members of Council are neither Directors of BRE Trust nor Trustees. They attend Council meetings only to inform and advise. They have no powers to vote on any matters considered by Council. Only those who are ‘Members’, that is Directors and Trustees of the Trust have the power to enact the Trust’s business.

Council may also appoint individuals from outside the BRE Trust Group to attend Council meetings as ‘Observers’. Such Observers can make contributions to Council meetings but have no powers in relation to business decisions made by Council.

The designation ‘Attendees at Council’ employed in this and other documents will refer to Trustee Members, Invited Members and Observers collectively.

In keeping with the definitions in the governing documents the terms ‘Council’, ‘Council Members’ and ‘Members of Council’ refer, in this and in other documents, only to the Directors and Trustees of the BRE Trust.

Where there is a need to explicitly distinguish Attendees at Council who are Directors and Trustees of BRE Trust from the Invited Members of Council they will be designated ‘Trustee Members’ (or Trustees) and ‘Invited Members’ respectively.

The Secretary to the Trustees attends Trust Council Meetings to take minutes of the meeting and advise Trustees on Trust procedures, governance and charitycommission requirements. Reference to ‘The Secretary’ in this document means the ‘Secretary to the Trustees’. The duties and responsibilities of The Secretary are set out in Annex 2.

Duties of Members of Council

Members of Council are persons of repute and have knowledge and experience of relevance to the objects and business of the BRE Trust.

As Directorsof the BRE Trust, Council Members have the following duties in law (the Companies Act 2006):

  • to act in accordance with the company’s constitution, and to use powers only for the purposes for which they were conferred
  • to promote the success of the company for the benefit of its members
  • to exercise independent judgment
  • to exercise reasonable care, skill and diligence
  • to avoid conflicts of interest
  • not to accept benefits from third parties
  • to declare to the company’s other directors any interest a director has in a proposed transaction or arrangement with the company

As Trusteesthey have the following duties in law in addition to the above:

  • to act strictly in accordance with the governing document
  • to manage the Charity’s affairs prudently taking a long-term as well as a short-term view
  • not to derive any personal benefit
  • to act together and in person and not to delegate control of the Charity to others, save as permitted by the governing document
  • to spend the Charity’s money solely for the purposes set out in the governing document
  • not to accumulate reserves unless there are some specific future uses for it in mind - this does not preclude accumulating prudent reserves to cover contractual responsibilities and responsibilities for the subsidiary companies

The Charities Commission further sets out the responsibilities of Trustees in its publication ‘Responsibilities of CharityTrustees’. This and other useful reference documents are available on the Charity Commission’s website: charitycommission.gov.uk

The Office of the Scottish Charity Regulator (OSCR) publishes guidance for Trustees of Trusts registered in Scotland. OSCR’s Guidance on the regulations and OSCR’s Guidance for CharityTrustees can be downloaded from the OSCR website: oscr.org.uk . In general the Scottish guidance is closely aligned with the CharityCommission’s guidance.

These documents are available in the Member’s private area of the Trust website.

Council must assure itself that all BRE Trust owned companies are being run in a responsible and competent manner. The Council assures itself through the application of the Group governance arrangements which are reviewed regularly. Should Council determine that any subsidiary company is not being run in a responsible and competent mannerit can, in extremis and through the proper exercise of its shares, change the Directors of the particular company.

In addition to the foregoing statements of the objects of the Trust and of the duties and obligations of the Trustees, the Council have agreed statements for the objectives of the BRE Trust and on the role of the Trustees;

Objectives of the BRE Trust

  • for the public benefit, to commission and support in accordance with its strategic plan, research, education, innovation and communication in science, engineering, economics, management and information technology connected with the built environment
  • to own the BRE Trust group companies and their assets and to work with them to maximise the level of resources they pass to the BRE Trust to finance the charity’s activities
  • to maintain a strategic plan for world-class research and education in the built environment, both for the public benefit and which enables the group companies to maintain and develop their scientific capabilities to deliver against the business plans of the BRE Trust group
  • to play a leading role in the development and expansion of research and by promoting its application to stimulate quality, innovation and excellence in the built environment
  • to contribute to the development of a sustainable built environment by disseminating and promoting the application of knowledge and innovatory practices
  • to work with other organisations to seek and generate funding (both cash and in kind) which can be put to support the BRE Trust’s charitable objectives

The Role of the Trustees

  • to manage and administer the activities of the BRE Trust, its assets and investments, in accordance with the relevant Acts and guidance issued by the Charity Commission.
  • to give strategic direction to the work of the BRE Trust and the group companies
  • to make input into the strategic business plans of the group companies
  • to extend the scope of the BRE Trust’s charitable activities and seek funding
  • to develop research and education objectives for the charity and to prioritise expenditure against such objectives
  • to act as ambassadors for the work and objectives of the BRE Trust and its group companies
  • to periodically benchmark the activities and achievements of the BRE Trust and its group companies
  • to ensure the excellence of the scientific standards within BRE and the other group companies

The responsibilitiesof the Trust and Group Company and Group Subsidiaries are set out in terms of a hierarchy of reserved matters. The matters reserved to the Council of the Trust are set out in Annex 3. The Matters reserved to the Group Company and its subsidiaries are set out in the “BRE Group Corporate Governance Structures and Arrangements”.

There is an agreed procedure for Members of Council, if necessary in the furtherance of their duties, to take independent professional advice at the company’s expense.

The Secretary stands ready to provide advice on the administrative aspects of meeting Members’ statutory obligations and should be consulted in the first instance.

Sub Committees of Council

The Council undertakes many of its activities through sub-committees which operate in accordance with agreed terms of reference.

Audit Committee (jointly with the Group trading companies)

Monitors and reports on external audit and financial reporting; internal controls and risk management systems; compliance; whistle blowing / fraud.

Research Committee

Has responsibility for overseeing the formulation and execution of the Trust’s research activities.

Publications Committee

Has responsibility for overseeing the formulation and execution of the Trust’s publishing activities.

The full terms of reference for the above committees are available in the Member’s private area of the Trust website.

Property Development Committee

Meets / communicates as required to provide expert property development advice to the BRE Group Board and to assure the Trustees that these major assets are being properly managed.

Nominations Committee

An ad-hoc committee, nominated by the Chair on an as needs basis, who meet as required in support of the Nominations Committee of the BRE GroupBoard for the purposes set out in the BRE Group governance arrangements.

The NHBC Foundation

The NHBC Foundation is principally funded by the NHBC and forms a separate grouping within the Trust.You can find out more about the NHBC foundation at nhbcfoundation.org

The Secretary to the Trustees monitors the activities of the NHBC Foundation as its activities form part of the overall activities of the Trust and are thus subject to the Trust’s rules of governance. The Secretary reports on the activities of the Foundation at each meeting of Council.

The Chair of the BRE Trust Research Committee sits on the Advisory Committee of the NHBC Foundation which selects the research projects to be funded.

Much of the research programme of the Foundation is undertaken by BRE Group companies. Where this is the case the Trust co-funds the research by making a 15% contribution to the cost of the project.

BRE University Centres of Excellence

The BRE Trust funds Chairs and post-graduate students at four BRE University Centres of Excellence;