Agenda and draft minutes

Apologies for absence were received from Councillor Medwyn Hughes (Councillor Elin Hywel was present as a substitute)

[Note: There is an exemption within the Code of Conduct for Members, which allows a member who has been appointed or nominated by their Authority to a relevant body to declare that interest but remain and participate in the meeting.]

UNANIMOUSLY RESOLVED that the minutes of the Joint Governance Committee meeting held on 18^th September 2024 be signed as a correct record.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris, D. Rose, E Williams and E. Hywel had earlier declared an interest in this item.]

The Joint Committee received a progress update in relation to the following key areas:

-       Governance;

-       Ongoing establishment;

-       Operator services;

-       Communications and reporting;

-       Training and meetings;

-       Resources, budget and fees.

Officers were asked if the current values of the sub-funds could be included in the update for the benefit of the public viewing the website. The Treasury and Pensions Investment Manager advised that this information was included in the Operator update agenda item, they would consider for future reports.

UNANIMOUSLY RESOLVED that the Host Authority update be received.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris, D. Rose, E Williams and E. Hywel had earlier declared an interest in this item.]

The Joint Committee considered the Risk Register Q3 2024 review. Members were reminded that the purpose of the WPP Risk Register was to:

-       Outline the WPP's key risks and factors that may limit its ability to meet its objectives.

-       Quantify the severity and probability of the risk facing the WPP.

-       Summarise the WPP's risk management strategies.

-       Monitor the ongoing significance of these risks and the requirement for further risk mitigation strategies.

During Q4 2024 , a review was undertaken of the Investment Risks.

Members were informed that during this review, the sub-group also reviewed the following risk:

-       Risk G.15 - The WPP is not prepared for the outcomes of any consultation or regulatory change.

The next review will take place in Q1 2025 and will focus on risks G.1 to G.7 of the Governance & Regulation Risks section.

UNANIMOUSLY RESOLVED that the amendments to the WPP Risk Register, as detailed in the report, be approved.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris, D. Rose, E Williams and E. Hywel had earlier declared an interest in this item.]

The Joint Committee received for consideration updated policies in respect of Rebalancing & Alteration.

It was noted that the Rebalancing and Alteration policy was originally approved by the JGC in December 2021 and sets out WPP’s approach to rebalancing the assets held within the pools’ sub-funds. The policy outlines the framework that has been put in place to ensure that manager allocations within sub-funds are monitored and rebalanced where appropriate.

The Committee was informed of various updates to the policies, as set out in the report.

UNANIMOUSLY RESOLVED that the Rebalancing and Alteration Policy be approved.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris, D. Rose, E Williams and E. Hywel had earlier declared an interest in this item.]

The Joint Committee received a presentation provided by Waystone Management (UK) Limited on the progress of the Wales Pension Partnership for Quarter 3 (July – September) 2024 covering the following key areas:

-       Corporate and FCA updates

-       Business update

-       Current fund holdings

-       Sub-funds update

-       Market updates

-       Engagement

UNANIMOUSLY RESOLVED that the Operator Update be received.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris, D. Rose, E Williams and E. Hywel had earlier declared an interest in this item.]

The Joint Committee received a presentation on the Performance Reports as of 30^th September, 2024. Members were advised that the sub funds that had outperformed/underperformed their respective benchmarks, were as follows:

-       Global Growth – underperformed by 1.5% gross / 1.9% net

-       Global Opportunities – outperformed by 0.8% gross / 0.5% net

-       Sustainable Active Equity – underperformed by 3.6% gross / 4% net

-       UK Opportunities – underperformed by 0.2% gross / 0.6% net

-       Global Government Bond – outperformed by 1.1% gross / 0.9% net

-       Global Credit – benchmark met gross / underperformed by 0.2% net

UNANIMOUSLY RESOLVED that the Performance Reports of the following sub-funds as at 30^th September 2024 be noted:

THE REPORTS RELATING TO THE FOLLOWING ITEMS ARE NOT FOR PUBLICATION AS THEY CONTAIN EXEMPT INFORMATION AS DEFINED IN PARAGRAPH 14 OF PART 4 OF SCHEDULE 12A TO THE LOCAL GOVERNMENT ACT 1972 AS AMENDED BY THE LOCAL GOVERNMENT (ACCESS TO INFORMATION) (VARIATION) (WALES) ORDER 2007. IF, FOLLOWING THE APPLICATION OF THE PUBLIC INTEREST TEST, THE JOINT COMMITTEE RESOLVES PURSUANT TO THE ACT TO CONSIDER THESE ITEMS IN PRIVATE, THE PUBLIC WILL BE EXCLUDED FROM THE MEETING DURING SUCH CONSIDERATION

UNANIMOUSLY RESOLVED, pursuant to the Local Government Act 1972, as amended by the Local Government (Access to Information) (Variation) (Wales) Order 2007, that the public be excluded from the meeting during consideration of the following item as the reports contained exempt information as defined in paragraph 14 of Part 4 of Schedule 12A to the Act.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute 9 above, to consider this matter in private, with the public excluded from the meeting, as disclosure would be likely to cause financial harm to the Pension Fund by prejudicing ongoing and future negotiations.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris, D. Rose, E Williams and E. Hywel had earlier declared an interest in this item.]

The Joint Governance Committee received the report on the Securities Lending Performance Review as at 30th September 2024 for consideration. The report was presented by Northern Trust.

UNANIMOUSLY RESOLVED that the Securities Lending Performance Review as of 30th September 2024, as detailed in the report be noted

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute 9 above, to consider this matter in private, with the public excluded from the meeting, as disclosure would be likely to cause financial harm to the Pension Fund by prejudicing ongoing and future negotiations.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris, D. Rose, E Williams and E. Hywel had earlier declared an interest in this item.]

The Joint Committee received the Robeco Engagement Report for Q3 of 2024.

UNANIMOUSLY RESOLVED that the Engagement Report for Q3 of 2024 be noted.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute 9 above, to consider this matter in private, with the public excluded from the meeting, as disclosure would be likely to cause financial harm to the Pension Fund by prejudicing ongoing and future negotiations.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris, D. Rose, E Williams and E. Hywel had earlier declared an interest in this item.]

The Joint Committee received the Responsible Investment and Climate Risk reports, for Quarter 3, 2024 (quarter ending 30th September, 2024), in respect of the following funds:-

-       UK Opportunities

-       Emerging Markets

The reports looked at ESG and climate risk metrics, highlighting any material ESG-related risks and issues, and identified key actions for the WPP to address.

UNANIMOUSLY RESOLVED that the Responsible Investment & Climate Risk Reports for the following sub funds be noted:

-       UK Opportunities

-       Emerging Markets

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute 9 above, to consider this matter in private, with the public excluded from the meeting, as disclosure would be likely to cause financial harm to the Pension Fund by prejudicing ongoing and future negotiations.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris, D. Rose, E Williams and E. Hywel had earlier declared an interest in this item.]

The Joint Committee was asked to appoint the Voting and Engagement Service Provider for the Wales Pension Partnership, in line with Schedule 3 of the Inter Authority Agreement.

UNANIMOUSLY RESOLVED that bidder 3 be appointed as the Wales Pensions Partnership Voting and Engagement Service Provider subject to the completion of the standstill period and the finalisation of the Voting and Engagement Service Provider Contract.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute 9 above, to consider this matter in private, with the public excluded from the meeting, as disclosure would be likely to cause financial harm to the Pension Fund by prejudicing ongoing and future negotiations.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris, D. Rose, E Williams and E. Hywel had earlier declared an interest in this item.]

The Committee was asked to appoint the Oversight Advisor for the Wales Pension Partnership, in line with Schedule 3 of the Inter Authority Agreement.

UNANIMOUSLY RESOLVED to appoint bidder 1 as the preferred bidder for the Wales Pensions Partnership Oversight Advisor subject to the completion of the standstill period and the finalisation of the Oversight Advisor Contract.