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1. Preamble

(a) The SME Liaison Panel (the “SME Panel”) has been set-up to establish an independent and transparent advisory council to the Business Banking Resolution Service (the “Company”) and a two way feed-back loop between the Company and the SMEs to encourage dialogue on, and understanding of, key issues and changes to policy and practice that may be of relevance in the context of the operation of the Scheme.

(b) The SME Panel has been set up in parallel to the Bank Panel. Both Panels are being established by the Company as contemplated within the UK Finance response to the Walker Review.

(c) The independent Walker Review consisted of an evidence-based, comprehensive analysis of the scale and complexity of banking complaints from SMEs. The findings of the Review were published by Simon Walker in October 2018. The Walker Review identified the need for better monitoring, information and dialogue to help rebuild the relationship between banks and SMEs.

(d) The Company, in the provision of the Scheme, is guided by and committed to the principles of: Independence, in both its structure and operations; fairness, in its processes and decision-making; transparency, in its reasons for decisions and actions; accessibility to its service; and accountability, of its actions to its stakeholders at all times.

(e) Capitalised terms used and not otherwise defined in these terms of reference shall have the same meanings given to them in the Company’s articles of association (the “Articles”), unless the context otherwise require

2. Objectives

The SME Panel has an advisory role and does not have decision-making responsibilities. The key objectives of the SME Panel are, in relation to the Scheme and in no particular order of importance, to:

(a) consider emerging trends, issues and areas of concern regarding access to finance and treatment of SMEs;

(b) make recommendations to the Company on identified issues (including thematic issues) and areas of concern to address potential issues and challenges early and effectively and with a view to providing appropriate support to SMEs;

(c) ensure that there is an on-going dialogue between the Company, SMEs and other stakeholders;

(d) provide on-going independent assessment of how identified issues and concerns are being addressed;

(e) provide a two-way feedback loop between SMEs and the Company to encourage dialogue on, and understanding of, key issues and changes to policy and practice that may be of relevance in the context of the operation of the Scheme, including with a view to improving customer service and meeting the needs of stakeholders;

(f) facilitate learning from previous significant complaints to inform the handling of future complaints; and

(g) act as a consultative body on certain matters determined by the Board of the Company and, always, in relation to those matters set out in Appendix 1 to these terms of reference.

3. Constitution of the SME Panel

3.1 Membership

(a) The Panel Chair (as defined in paragraph 3.2(a) below) will be responsible for nominating members to the SME Panel who have the requisite skills, experience and commitment to further the objectives of the SME Panel and who, together, represent the views of a broad and diverse SME group, including, SME members from representative business groups and SME industry representatives (each a Representative Member).

(b) The Board will approve the appointment of any nominee Representative Member, unless it reasonably considers that the nominee may not have the necessary expertise to contribute to the overall objectives of the SME Panel or the diversity of its membership, in which case, the Board will reasonably consult with the Panel Chair on a suitable alternative.

(c) The Board will reserve the ability to remove any Representative Member either at the request of the Panel Chair or if the Board considers that such Representative Member is not constructively contributing to the objectives of the SME Panel, provided there has been reasonable prior consultation with the Panel Chair and reasonable opportunity for the situation to be remedied.

(d) The Panel Chair may, if an existing Representative Member is no longer able to or no longer wishes to remain a Representative Member, nominate a replacement member. In which case, the same process for approval and removal as noted in sub-sections 3.1(b) and (c), above, will apply.

(e) The SME Panel membership will comprise only of the Representative Members and the Panel Chair. In total, there will be up to 9 Representative Members at any one time. The Board may increase this number after consultation with the Panel Chair.

(f) The SME Panel will be dissolved at the point of any winding-up of the Scheme or as otherwise agreed by the Board on mutual agreement with the Panel Chair if the Board considers that the SME Panel is not working effectively or meeting its objectives.

3.2 The Panel Chair

(a) The Board of the Company will appoint the chair of the SME Panel (the Panel Chair).

(b) The Panel Chair’s term of office will last for three years, subject to the Board’s ability to remove and replace the Panel Chair at any time during the Panel Chair’s term subject to reasonable prior consultation with the Representative Members.

(c) The Panel Chair is responsible for:

  • leadership of the SME Panel and ensuring its overall effectiveness in relation to its objectives;
  • identifying future members of the SME Panel from SME industry representatives and SME members of representative business groups;
  • ensuring that the effectiveness of the SME Panel is optimized by the broadest possible participation from the SME community;
  • facilitating constructive and effective engagement between the Company and the Representative Members;
  • engaging with the Board and the Representative Members from time to time (and at least annually) to understand their views on the governance and performance of the SME Panel;
  • reporting the findings, recommendations and actions of the SME Panel to the Board;
  • communicating directly to the Chief Executive Officer, the Chief Adjudication Officer and/or the Chairperson;
  • working with the Secretary to ensure that the Representative Members receive notices of meetings, the proposed agenda and all relevant background information in a timely fashion; and
  • compiling, each year, an anonymised summary report on the activities of the SME Panel which will be included in the annual report and accounts of the Company.

(d) In addition to the above, the Panel Chair will also endeavour to achieve consensus, where relevant and appropriate, between Representative Members on key issues under discussion – ensuring consistency, as appropriate, to the objectives of the SME Panel. Dissenting opinions and material perspectives will be reflected in the minutes of the meeting.

(e) The terms and conditions of the Panel Chair’s appointment (including the level of their remuneration) will be determined by the Board.

3.3 Company Secretary

(a) The company secretary of the Company will act as the secretary of the SME Panel (the Secretary) and will ensure each Representative Member receives notice of a SME Panel meeting (confirming the venue, time and date), the agenda for such meeting and all relevant information, including explanatory and/or background papers in a timely manner to enable full and proper consideration to be given to the issues or matters to be discussed at the meeting.

(b) Unless otherwise agreed with a Representative Member, the Secretary will provide such information no later than 15 business days before the date of the meeting to each Representative Member and any other person required to attend to the email (or other address) notified in writing by the Representative Member to the Secretary for this purpose

(c) The Secretary will minute the proceedings and decisions of all SME Panel meetings, including recording the names of those present and in attendance. Draft minutes of SME Panel meetings will be circulated to all Representative Members not more than 15 business days after the meeting and once approved by the Panel Chair, minutes should be circulated to the Representative Members and the Board.

4. Functioning of the SME Panel

4.1 Meetings

(a) Unless otherwise agreed between the Company and each of the Representative Members, the SME Panel will meet at least twice a year (at half-yearly intervals).

(b) Additional SME Panel meetings, including joint meetings with the corresponding Bank Liaison Panel, may also take place if a majority of the Representative Members believe these are required in order to meet the SME Panel objectives and/or the Board, acting reasonably, deem this necessary.

(c) The Executive Directors will be responsible for setting the specific agenda for SME Panel meetings in consultation with the Panel Chair (and including on consultation with the chair of the Bank Liaison Panel for any joint meetings). The agenda will, as and where appropriate, include the items noted on the form of ‘standing agenda’ included in Appendix 2 to these Terms of Reference.

(d) Representative Members may request additional agenda items by prior written notice to the Panel Chair. The Panel Chair will accommodate such additional items where practicable and having regard to the overall objectives of the SME Panel and the specific purpose of that particular SME Panel Meeting.

4.2 Attendance

(a) A Representative Member may, with reasonable prior notice to the Panel Chair, appoint an alternate who has the requisite skill and experience to attend the meeting in their place. Written input will also be permitted in the case of any Representative Members being unable to attend or be represented by an alternate for individual meetings.

(b) The Panel Chair will attend all SME Panel meetings. If the Panel Chair cannot attend the Representative Members will agree an alternate from amongst themselves.

(c) Virtual attendance at SME Panel meetings will be permissible if all persons participating in the meeting are able to hear and speak to each other throughout the meeting (and the Company will take all reasonable steps to ensure that appropriate means are made available to enable attendance at meetings of the SME Panel as an alternative to being physically present).

(d) The Chief Adjudicator will have a standing invitation to attend SME Panel meetings in an observer capacity.

(e) The Panel Chair may:

  • invite or request one or more of the Executive Directors of the Company to attend an SME Panel meeting; and/or
  • where it considers that the attendance and/or contribution of the relevant person is reasonably necessary or desirable for the purpose of addressing specific matters to be included in the business of the relevant meeting, invite or request certain representatives of HMT, the FCA, the FOS, BEIS and/or such other relevant stakeholders to attend some or all of an SME Panel meeting,

in both cases, attendees will be present in an observer capacity and the Panel Chair will give notice of any such attendance to the Representative Members, at least 10 business days, prior to the SME Panel meeting.

(f) Attendance in an observer capacity confers no authority beyond a right to observe only with the Panel Chair’s invitation of attendance and contribute to the discussion with the approval of the Panel Chair.

(g) A director of the Board will attend SME Panel Meetings.

(h) If requested in writing to the Panel Chair by a majority of the Representative Members, one or more of the Executive Directors will attend an SME Panel meeting.

5. Quorum

The quorum necessary for an SME Panel meeting to proceed will be the Panel Chair and a majority of the Representative Members (or, in both cases, their alternates).

6. Authority

The SME Panel (or any individual Representative Member) will not have any authority over the Board or the Company itself.

7. Other matters

(a) The Board of the Company, liaising with the Panel Chair, will:

  • ensure that a periodic evaluation of the SME Panel’s performance is carried out;
  • at least annually, review these terms of reference to ensure that the SME Panel is operating at maximum effectiveness and consult with the Representative Members, collectively, on any changes it considers necessary; and
  • for the avoidance of doubt, not make any changes to the scope of matters for consultation set out in Appendix 1 without seeking the prior approval of the SME Panel.

(b) Consultation on the matters set out in paragraph 2 of Appendix 1 will be in accordance with the consultation process also set out in Appendix 1. Consultation on matters not expressly set out in paragraph 2 of Appendix 1 will follow the consultation process in Appendix 1 insofar as the Board determine it is proportionate to the matter under consultation.

(c) Each Representative Member will be entitled to be paid such travelling, accommodation and other expenses as are reasonably and properly incurred by them in connection with their attendance at any SME Panel meetings.

Appendix 1: Process and Matters for Consultation

1. Process

1.1 To the extent the Board determines that the SME Panel has a consultation right in respect of any matter set out under paragraph 2 of this Appendix 1 (a Consultation Matter), the Board may not carry out such matter without first consulting with the SME Panel.

1.2 The Board will, acting reasonably and in good faith, consider what is sufficient consultation in light of the complexity and importance of the relevant subject matter. For the avoidance of doubt, reasonable consultation will require, as a minimum:

(a) reasonable endeavours by the Board of the Company to consult the relevant stakeholders as far in advance as is reasonably practicable in respect of the relevant Consultation Matter(s);

(b) written notice setting out in reasonable detail: a description of the relevant Consultation Matter, including a statement of the Board’s opinion of such matter; and details of the SME Panel meeting at which the Consultation Matter will be considered, provided to the Panel Chair at least 15 business days prior to the SME Panel meeting at which the matter will be discussed;

(c) following receipt by the Panel Chair of the written notice, described in paragraph 1.3(b) and prior to the SME Panel meeting at which the matter will be discussed, the Board will endeavour to respond to reasonable requests for further information or clarification on the relevant Consultation Matter;

(d) following consideration of the relevant Consultation Matter at an SME Panel meeting, consideration by the Board of any requests from the SME Panel for further time to consider the relevant Consultation Matter or for an additional SME Panel meeting to discuss the relevant Consultation Matter further, provided that the basis for such requests from the SME Panel are reasonable in light of the matter being considered by them; and

(e) consideration by the Board of any discussions, responses and/or papers that may be provided by the SME Panel prior to or at the SME Panel meetings to consider the relevant Consultation Matter.

1.3 The directors may have regard to any advice or recommendation received during consultation with the SME Panel in the context of the directors’ duty to act in the best interest of the Company and in pursuance of the Company’s Object but are not bound to adhere to or act on any such advice or recommendation. Consultation (under 2.1(a),(b) or (c)) is not required if it is a minor administrative change or a change required due to applicable law (unless that would result in a material change to the operation of the Scheme or the interests of the SMEs, in which case consultation would be required).

2. Consultation Matters

2.1 The following matters will require consultation with the SME Panel as noted in paragraph 1:

(a) An alteration of these Articles, a waiver or disapplication of any provision of these Articles or a ratification of any breach of any provision of these Articles.

(b) An alteration to the Scheme Rules.

(c) An alteration to the Customer Agreement (as defined in the Participation Deed)

(d) The passing of any resolution for the winding up of the Company or presentation of any petition for the administration or the winding up of the Company (unless it has become insolvent).

(e) The transfer of the Scheme to another body (statutory or otherwise).

(f) Any change to the name of the Company.

(g) Any agreement or commitment, conditional or otherwise, to do any of the matters set out in Paragraph 2(a) to 2(e).

Appendix 2 – Standing Agenda

These are suggested agenda items based on the objectives of the SME Panel. The Executive Directors and the Panel Chair will consider whether it is appropriate to include all of these agenda items and/or additional items for any SME Panel meeting. All Representative Members will have the opportunity to request additional agenda items.


1 Emerging trends, issues and areas of concerns regarding access to finance and the treatment of SMEs

2 Thematic Issues: update and recommendations

3 Key changes to policy and practice

4 Key learnings from previous, significant, complaints