To review the Code of Practice for Governance of Council Interests in Companies – per Leader Decision published on 20 March 2019, whereby it was:

Resolved –

(1) That the Code of Practice be adopted.

(2) That the Code of Practice be referred to the Standards and Constitutional Oversight Committee.

The Director of Governance and Assurance informed that Councils were now able to own commercial companies and trade through them, either as a wholly owned company or as a joint venture with a private sector partner and trade on the markets.  The Council was an organisation entrusted with public money.  Consequently, in the interests of openness, transparency and accountability, the Leader had made the decision to adopt the Draft Code of Practice for the Governance of Council Interests in Companies (Draft Code) but had also referred it to the Business Overview and Scrutiny Committee meeting on 18 September 2019 (Minute No. 20 refers.) and to the Audit and Risk Management Committee meeting on 24 September 2019 (Minute No. 25 refers.) for noting prior to its adoption.

The Committee received copies of the Decision Notice, the reports considered at  meetings of the Shareholder Board on 27 June 2018 and 19 March 2019 and the Minute extracts in respect of the Business Overview and Scrutiny and the Audit and Risk Management Committees who had considered the Draft Code of Practice last September.

The Committee noted that the intention of the Draft Code of Practice was to promote and ensure good governance in relation to those companies in which the Council was a shareholder and create a ‘blueprint’ for an approach to company interests in concert with the Council’s adopted Commercial Strategy (minute to item 40 refers, Cabinet 26^th November 2018). It was also noted that the Draft Code was in accordance with the local government model.

The Director reported that a lot of work had been undertaken to produce what was a national example and the model now used up and down the country and was put out by professional bodies.  It was a model that had been checked through various law firms.  There was one difference to what was here and what was in the national model.  The national model contained a suggestion that Council owned companies were held through a separate holding company.  When this was discussed at the Shareholder Board with the Leader, it was considered that the Council should not operate through a holding company but each company should be looked at separately so that was a change that was incorporated and the only change that differed from the national model. The structure of it followed the CIPFA/ SOLACE Model Code of Corporate Governance that the Council had adopted as its Corporate Code.

The Director was then asked a number of questions by Members about the Council’s companies, their meetings and minutes and how their operations were scrutinised which he answered accordingly. The Director was reminded that the Committee had previously asked for a list of all the companies that the Council was involved in, solely and as a joint venture and agreed to present it to a future meeting. The list would also be presented to a future meeting the Audit and Risk Management Committee.

RESOLVED:

Thatthe Code of Practice for Governance of Council Interests in Companies be noted.