Agenda item

Company Governance EXE22-048

Reporting Person – Joanne McIntosh


The Leader of the Council, Councillor Barker, introduced a report which recommended to Council proposals to modernise the Council’s governance arrangements with respect to its oversight of its wholly or part owned companies.  It was explained that Officers had undertaken a review of the governance of the Council’s subsidiary companies as part of the medium term financial resilience assessment produced by the professional services firm EY.  The Leader advised that the proposed arrangements sought to improve openness and transparency, address conflict issues by removing Councillors from company boards, and formalise provision of Council services to group companies.  The Executive noted that the proposals included the appointment of the Leader as the Council’s Shareholder Representative, and the creation of a Shareholder Advisory Group (SAG) to which the Leader of the Council and members of the Executive would be appointed.

The Overview and Scrutiny Committee had pre-scrutinised the report at its meeting on 11 July 2022 and had expressed concern over the proposed membership of the SAG.  The Leader advised that the proposals followed best practice and mirrored the Council’s governance arrangements of a Strong Leader and Executive model.  It was noted that the Chair of the Overview and Scrutiny Committee would be invited to attend SAG meetings.  The new structure would also allow the Chair of the Overview and Scrutiny Committee to call matters to be considered by the Committee.  Reserved matter decisions, such as adoption of business plans, would continue to be determined by Full Council.

Following a question regarding the financial implications of the proposals, the Executive was informed that the additional posts would cost around £100k - £150k and would be funded in the short term through the Fit for the Future programme budget.

The Executive welcomed the report, noting that the proposals were in line with CIPFA best practice.  A review of the new arrangements was considered to be useful to see how it was operating, subject to Council agreeing the proposals on 21 July 2022.

REcommended to Council

That  (i)    the Leader of the Council be appointed as the Council’s Shareholder Representative;

          (ii)   the creation of a Shareholder Advisory Group be approved, as detailed in the report, to ensure that its companies act in the interests of the Council as shareholder and contribute to the Council’s objectives;

          (iii)  the Terms of Reference of the Shareholder Advisory Group, as set out at Appendix 2 to the report, be approved;

          (iv)  Directors to the Group Companies, as outlined in Appendix 3 to the report, be appointed;

          (v)   the Shareholder Liaison Service be established to lead on managing contractual arrangements with the companies and in holding of the companies to account;

          (vi)  the establishment of Head of Shareholder Liaison Service at Grade W8 and Project Officer on Grade W5 be approved;

          (vii) delegated authority be given to the Director of Legal and Democratic Services to approve final terms and enter any Service Level Agreements where corporate functions provide support services to group companies;

       (viii)  delegated authority be given to the Director of Legal and Democratic Services to approve final terms and enter any Data Protection or Information Sharing Agreement; and

          (ix)  the Constitution be updated accordingly.

Reason:   The recommendations proposed will improve the governance arrangements in line with current best practice and allow the Council to closely monitor its interests within each of its companies with further clarity, transparency, and reporting.  It will ensure that the Council and its subsidiaries are meeting their legal and statutory responsibilities and are practising good governance.

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