Issue - meetings

To consider a report which sets out the key findings and recommendations of the Shareholder Working Group in relation to the governance of the Council’s wholly-owned companies.

The Sub-Committee considered a report which set out the key findings and recommendations of the Shareholder Working Group in relation to the governance of the Council’s wholly-owned companies, having regard to its review of compliance with the published CIPFA guidance and other good practice.

The Working Group had been chaired by the late Councillor S Carter during this first phase of the review. The review was ongoing and would continue into next year.

The Working Group’s conclusions regarding the most effective approach to designing the Council’s longer term company governance, reporting and board arrangements were as follows:

1.    There should be a revised Board structure to support good governance.

2.    There should be an observer appointed to attend meetings of each company board to report direct to the Finance Sub-Committee as the shareholder committee.

3.    Immediate attention should be given to rectifying some areas, including the removal of Cheshire East Residents First (the group structure) from the governance structure and relevant documentation.

4.    A further in-depth review of Shareholder documentation should be undertaken.

5.    The risk appetite of the Council in respect of company risk was overall rated as ‘Low’ and risks should be appropriately mitigated to this position.

6.    Risk mitigation and controls should be improved.

7.    The Working Group should continue to report on future proposals for improving governance.

Further details were set out in the report.

The Director of Governance and Compliance presented the recommendations set out in the report. In doing so, he advised that the remuneration of observer members on company boards would be a matter for consideration by the Independent Remuneration Panel as part of its next full review of members’ allowances. He also advised that the full Council date in recommendation 3.1(a) would need to be changed to a later date to be determined by the Sub-Committee.

To assist members in considering the proposals, diagrams showing the current and proposed governance arrangements were circulated at the meeting. The proposed governance arrangements included the removal of Cheshire East Residents First (CERF) as a holding company, with companies reporting direct to the Finance Sub-Committee in future as the shareholder committee.

Members commented that a low-risk approach as advocated in the report could mean that the companies would miss out on opportunities by being too risk averse. Officers responded that business opportunities could still be reported to the Sub-Committee for consideration.

The recommendations in the report were moved and seconded subject to the determination of a suitable Council date from which the new arrangements would take effect.

An amendment to the substantive motion was then moved and seconded that the following changes be made to the recommendations in the report:

3.1(a) Two elected members to be appointed to each company board.

3.3 the amended shareholder agreements set out in Appendices 1 and 2 be further amended as follows:

Para 4.1.1 to provide for two elected members to be appointed to each company board.

Para 4.7 to provide that the quorum at any meeting of the directors  ...  view the full minutes text for item 19