Agenda item

Recommendations

Shareholder Committee are requested to:

i)                 approve the recommendations as set out in each section of the report and as summarised in paragraph 11;

ii)                delegate the approval of the new conflicts of interest policy to the Assistant Chief Executive – Legal and Democratic Services; and

iii)              delegate all other necessary steps to secure the implementation of all other recommendations set out in this report to the Corporate Director, Resources.

Considered – A report of the Corporate Director, Resources providing an analysis of how Council owned companies were governed using best practice for commercial governance as a guide as set out in the Chartered Institute of Public Finance and Accountancy (CIPFA) updated publication “Local Authority Owned Companies – A good practice guide 2022 edition”.  The report provided an update to the Commercial Governance Review report presented to the Audit Committee on 11 December 2023.

Kerry Metcalfe, Assistant Director for Commercial, Property and Procurement, presented the report which set out outcomes and findings of the Commercial Governance Review.  The officer then drew members’ attention to the findings of the review:

·        The outcome of the review was positive and showed that governance and reporting structures in place within NYC were largely compliant with CIPFA guidance

·        Some areas of improvement were identified and recommendations were summarised in Section 11 of the report.  Key areas included:

• Documenting and managing conflicts of interests that might arise where senior officers were also directors of companies
• A review of elected members on boards to consider whether in some cases it would be more appropriate for elected members to be observers rather than directors
• A minimum level of information be provided in Business Plans
• Ensuring Back Office Service Level Agreements were adequately documented
• A review of annual audit arrangements for each company

·        Completion and ongoing review of risk registers

·      Some gaps were identified in the review of Bracewell Homes which had led to a specific recommendation on the governance of that company to bring it in line with other Brierley entities.  The report confirmed that the activities undertaken by Bracewell Homes were however deemed to be low risk from a commercial perspective, the company had a strong financial standing and there were no financial or reputational risks associated with the company. The majority of the issues identified through the governance review had either already been addressed or were being actioned.

·      The same report had been presented to Audit Committee the previous day for note and comment on. The main areas of feedback from the Committee related to the recommendation around elected members on boards.  Several members of the Audit Committee felt that elected members should be represented as they felt they were ultimately accountable for any decisions made by companies. One member of the Committee also queried whether non-executive directorship opportunities might be considered so that elected members with specific skills could put themselves forward for those roles.

Gary Fielding, Corporate Director of Resources, advised that each company was different and the matter of whether elected members should sit on boards should be decided on a case by case basis. 

Councillor George Jabbour was in attendance at the meeting and provided further feedback on consideration of the matter at the Audit Committee, where he was Vice-Chair. 

It was moved and seconded that a paper be brought to the next meeting of the Shareholder Committee reviewing the role of elected members on company boards, and the Committee also considered whether it would be beneficial for members to be included on certain boards in an observer capacity.

Resolved – That:

(i)               The recommendations as set out in Paragraph 11 of the report be approved;

(ii)              The Assistant Chief Executive Legal and Democratic Services be delegated authority to approve the new conflicts of interest policy;

(iii)            The Corporate Director, Resources be delegated authority to take all other necessary steps to secure the implementation of all other recommendations set out in the report; and

(iv)            A report be considered at the next meeting of the Committee in relation to the role of elected members on company boards.