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Agenda item

Stone Circle Governance Review

Report of the Chief Executive

 

Minutes:

 

Before the report the Leader of the Council, Councillor Richard Clewer, noted that he had been a Director of Stone Circle until he was appointed Leader.

 

Councillor Pauline Church, Cabinet Member for Finance, Procurement, Commissioning, IT, Digital and Commercialisation, presented the report on the review of the Stone Circle companies’ governance. Cabinet had requested a review of the governance arrangements for the Stone Circle companies on 2 February 2021, to examine governance in relation to shareholder requirements, processes for decisions, performance and risk reporting and other matters.

 

Among the changes proposed was the absence of elected Members on the Board, to be replaced by a shareholder group which would act as a conduit with the council, reducing conflicts of interest and operating in a more commercial manner as delivery of housing was increased.

 

The Leader stated he considered the transition to new arrangements as part of what was envisaged when the companies were set up, as they developed over time.

 

Councillor Graham Wright, Chairman of the Overview and Scrutiny Management Committee stated the Cabinet report had been received at a meeting of the committee on 21 September 2021.  He had had pre meetings with relevant officers and welcomed there being future scrutiny input.

 

Councillor Gordon King stated he was supportive of the restructure and sought confirmation, which was provided, that the Director of Housing would be one of the roles appointed to the Board. He also raised the issue of future councillor involvement.

 

Councillors Pip Ridout and Tony Jackson raised the future involvement of the Audit and Governance Committee.


Councillor Gavin Grant asked whether the model proposed would be followed for future council set up companies, without interim steps taken as with Stone Circle, which had been an entirely new enterprise.  Councillor Church stated matters would be looked at on an individual basis, but that the experience and understanding of legal obligations gained through the Stone Circle process would be utilised.

 

At the conclusion of discussion, and noting that any decision would need to be taken individually by the Leader under delegated executive authority due to the nature of the meeting, the Cabinet was asked for its view and it was,

 

Resolved:

 

That the Leader of the Council should:

 

1)    Adopt and commit to implementing the recommendations of the governance review over the next 12 months.

 

2)    To request the companies to create Business Plans with greater detail including market analysis, risks, sensitivity, performance and forecasting to be presented to Cabinet at a future meeting.

 

3)    To create a sub-committee called the Stone Circle Shareholder Group chaired by the Leader with two other Cabinet Members and the option to co-opt external expertise and delegates to the Director of Legal & Governance in consultation with the Leader to make the necessary arrangements and Constitutional amendments.

 

4)    To agree that the Articles of Association of the Stone Circle companies be amended to include a 3 year maximum term for the Chairman of its boards.

 

5)    To request the Stone Circle companies to provide quarterly reporting to the Council with reports shared with Corporate Leadership Team, Scrutiny and the Stone Circle Shareholder Group starting from January 2022 and to  produce its accounts to the Audit and Governance Committee from 2022.

 

6)    To delegate to the Corporate Director of Resources in consultation with the Leader the recruitment and appointment of new non-executive board directors and officer director to replace current members of the Stone Circle companies and to take all further necessary steps to complete this.

 

7)    Subject to agreeing the above recommendations to agree the revised Stone Circle Housing company business plan as submitted to cabinet at its February 2021 meeting such that individual acquisition budgets are increased.

 

Reasons

 

To give effect to the recommendations contained in the Governance Review of Stone Circle companies which provides best practice advice, academic
sources and other local government learning on the governance and
commercial success of council owned companies.

Supporting documents:

 

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