Agenda of Appointments and Performance Review Committee

TERMS OF REFERENCE

Responsibilities

The Appointments and Performance Review Committee is established to:

1. Review the chief executive’s performance and to recommend to the Governing Body the terms and conditions of the CE’s employment including any performance agreement measures and annual remuneration.

2. Make appointments to Council-Controlled Organisations (CCOs), Council Organisations (COs) and exempt CCOs and COs.

3. Approve policies relating to the appointment of directors and trustees to CCOs and COs.

Powers

All powers necessary to perform the committee’s responsibilities.

Except:

(a) powers that the Governing Body cannot delegate or has retained to itself (section 2)

(b) where the committee’s responsibility is limited to making a recommendation only

Exclusion of the public – who needs to leave the meeting

Members of the public

All members of the public must leave the meeting when the public are excluded unless a resolution is passed permitting a person to remain because their knowledge will assist the meeting.

Those who are not members of the public

General principles

· Access to confidential information is managed on a “need to know” basis where access to the information is required in order for a person to perform their role.

· Those who are not members of the meeting (see list below) must leave unless it is necessary for them to remain and hear the debate in order to perform their role.

· Those who need to be present for one confidential item can remain only for that item and must leave the room for any other confidential items.

· In any case of doubt, the ruling of the chairperson is final.

Members of the meeting

· The members of the meeting remain (all Governing Body members if the meeting is a Governing Body meeting; all members of the committee if the meeting is a committee meeting).

· However, standing orders require that a councillor who has a pecuniary conflict of interest leave the room.

· All councillors have the right to attend any meeting of a committee and councillors who are not members of a committee may remain, subject to any limitations in standing orders.

Independent Māori Statutory Board

· Members of the Independent Māori Statutory Board who are appointed members of the committee remain.

· Independent Māori Statutory Board members and staff remain if this is necessary in order for them to perform their role.

Staff

· All staff supporting the meeting (administrative, senior management) remain.

· Other staff who need to because of their role may remain.

Local Board members

· Local Board members who need to hear the matter being discussed in order to perform their role may remain. This will usually be if the matter affects, or is relevant to, a particular Local Board area.

Council Controlled Organisations

· Representatives of a Council Controlled Organisation can remain only if required to for discussion of a matter relevant to the Council Controlled Organisation.

1 Apologies

At the close of the agenda no apologies had been received.

2 Declaration of Interest

Members are reminded of the need to be vigilant to stand aside from decision making when a conflict arises between their role as a member and any private or other external interest they might have.

3 Confirmation of Minutes

That the Appointments and Performance Review Committee:

a) confirm the ordinary minutes of its meeting, held on Thursday, 2 March 2017, including the confidential section, as a true and correct record.

4 Petitions

At the close of the agenda no requests to present petitions had been received.

5 Public Input

Standing Order 7.7 provides for Public Input. Applications to speak must be made to the Democracy Advisor, in writing, no later than one (1) clear working day prior to the meeting and must include the subject matter. The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders. A maximum of thirty (30) minutes is allocated to the period for public input with five (5) minutes speaking time for each speaker.

At the close of the agenda no requests for public input had been received.

6 Local Board Input

Standing Order 6.2 provides for Local Board Input. The Chairperson (or nominee of that Chairperson) is entitled to speak for up to five (5) minutes during this time. The Chairperson of the Local Board (or nominee of that Chairperson) shall wherever practical, give one (1) day’s notice of their wish to speak. The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders.

This right is in addition to the right under Standing Order 6.1 to speak to matters on the agenda.

At the close of the agenda no requests for local board input had been received.

7 Extraordinary Business

Section 46A(7) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

“An item that is not on the agenda for a meeting may be dealt with at that meeting if-

(a) The local authority by resolution so decides; and

(b) The presiding member explains at the meeting, at a time when it is open to the public,-

(i) The reason why the item is not on the agenda; and

(ii) The reason why the discussion of the item cannot be delayed until a subsequent meeting.”

Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

“Where an item is not on the agenda for a meeting,-

(a) That item may be discussed at that meeting if-

(i) That item is a minor matter relating to the general business of the local authority; and

(ii) the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but

(b) no resolution, decision or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”

8 Notices of Motion

At the close of the agenda no requests for notices of motion had been received.

Appointments and Performance Review Committee

29 March 2017

Progress on the appointments process for Auckland Transport and the Auckland Regional Amenities Funding Board and process for appointments to the board of the Tamaki Redevelopment Company Limited

File No.: CP2017/03972

Purpose

1. To make decisions regarding the process for the joint appointment to the board of the Tamaki Redevelopment Company Limited and update the committee on the progress for appointments to the boards of Auckland Transport and the Auckland Regional Amenities Funding Board.

Executive summary

Auckland Regional Amenities Funding Board and Auckland Transport

2. Further to the decisions made on 1 February 2017 and 2 March 2017 about the process, skill sets, and short-listed candidates for the appointments to the Auckland Regional Amenities Funding Board and the board of Auckland Transport, the following progress has been made:

(i) the Auckland Regional Amenities Funding Board’s nomination panel have completed a review of all applicants and are recommending interviewing eight candidates for the two vacancies on this board

(ii) the Auckland Transport interview panel have completed ten interviews and recommend appointing three directors for the three vacancies on this board.

3. Two confidential reports on today’s agenda provide the information for the Appointment and Performance Committee to make its decisions.

Tamaki Redevelopment Company Limited

4. The Tamaki Redevelopment Company Limited constitution provides that the Crown and Auckland Council appoint one director each to the board, with the balance of directors to be appointed and/or removed jointly by the Crown and council.

5. The Appointments and Performance committee is required to make decisions regarding whether to recommend reappointing or retiring a director whose term expires on 19 June 2017. This director was jointly appointed by council and the Crown.

6. If it is decided not to reappoint the director, decisions will also need to be made regarding the skill sets required for any replacement, and the membership of the joint appointment panel.

7. A confidential report on today’s agenda considers these matters.

Recommendation/s

That the Appointments and Performance Review Committee:

a) note the there are two confidential reports on this meeting agenda providing recommendations:

i) from the Auckland Regional Amenities Funding Board nomination panel regarding the short-listing of eight candidates for interview

ii) from the Auckland Transport interview panel providing recommendations regarding the appointment of three candidates to the Auckland Transport board.

b) note the appointment process for the jointly appointed board members for the Tamaki Redevelopment Company Limited

c) note the final appointment decisions will be made publicly available at the conclusion of the appointment process.

Comments

Progress on the appointment process for Auckland Transport and the Auckland Regional Amenities Funding Board

8. Two confidential reports on this agenda provide information for the committee to make decisions regarding the:

(i) eight candidates that are recommended for interview by the Auckland Regional Amenities Funding Board nomination panel

(ii) three candidates that are recommended for appointment by the Auckland Transport interview panel.

9. The nomination panel chair, Councillor Christine Fletcher will speak to the recommendation that eight candidates be interviewed for the two vacancies on the Auckland Regional Amenities Funding Board.

10. The interview panel chair, Councillor Bill Cashmore will speak to the recommendation that three candidates be appointed to the three vacancies on the Auckland Transport board.

Tamaki Redevelopment Company Limited

11. Auckland Council owns 41 per cent of the shares in Tamaki Redevelopment Company Limited. The Crown owns the other 59 per cent of the shares. Tamaki Redevelopment Company Limited’s constitution provides that the Crown and council independently appoint one director each, and jointly appoint the other directors.

Review of strategic priorities and board capabilities for Tamaki Redevelopment Company Limited

12. On 13 April 2015 Cabinet agreed to transfer the ownership and responsibility for the associated tenancy and property management services of Housing New Zealand’s (HNZC) Tamaki assets (approximately 2,800 houses) to Tamaki Redevelopment Company Limited by 31 March 2016 [CAB Min (15) 11/18 refers].

13. As a result Tamaki Redevelopment Company Limited’s functions have changed significantly to include:

· management of $1.5 billion balance sheet

· asset management, including upgrading of 2,800 social houses

· redevelopment of approximately 7,500 new houses

· significant procurement and contract management in respect of existing assets and those to be developed

· contributing to building and evaluating an outcomes framework for monitoring regeneration outcomes for Tamaki

· enabling social and economic outcomes e.g. education and employment .

14. Following the cabinet decision in 2016, the board of Tamaki Redevelopment Company Limited commissioned a strategic review which considered its additional responsibilities, the future governance requirements including the number of board members, skill requirements (current and future) and remuneration.

15. The strategic review recommended an increase in directors from seven to eight (nine if required) because of the increased workload. The Tamaki Redevelopment Company Limited board was increased to eight directors following this strategic review.

16. One director’s term is expiring in June 2017. Decisions need to be made whether to reappoint this director.

Tamaki Redevelopment Company Limited - Board Appointment Process

17. If it is decided not to reappoint the director, a process will need to be undertaken to recruit a new director. The recommended process is set out below. Obviously, if the director is reappointed for a further term, this process will not be undertaken.

18. The process for appointment of directors to the board of Tamaki Redevelopment Company Limited is similar to council’s but involves the Crown. The appointment process and timing is set out below:

	Step	Who	Date
1	a) Board appointment process b) Approval of joint appointment panel members c) Skill sets	Report to Appointment and Performance Review Committee of council	29 March 2017
2	Advertising	Executive Search team	31 March – 12 April 2017
3	Short-list candidates	Joint appointment panel	12 – 19 April 2017
3	Approval of short-list candidates	Report to Appointment and Performance Review Committee and Crown	4 May 2017
4	Interview candidate	Joint appointment panel	5 May – 19 May 2017
5	Appointment of candidate	Report to Appointment and Performance Review Committee and Crown	7 June 2017

19. It is recommended that the process for the board appointments will be supported by council’s executive recruitment team (Howard Chaffey and Elvira Bobekova).

Consideration

Local board views and implications

20. Board appointments are the role of the governing body. Local board members are able to provide input through the nomination process.

21. The Tamaki-Maungakiekie Local Board contributes to the joint board appointment process through membership on the Tamaki Coordination Group, which provides feedback on the appointment process directly to the Development Auckland Limited representative on the joint appointment panel.

Māori impact statement

22. The Independent Māori Statutory Board is able to provide input into the nomination process and through representation on the joint appointment panel.

Implementation

23. Following approval from this committee, staff from the CCO Governance and External Partnerships and the Executive recruitment teams will progress the appointment process.

Attachments

There are no attachments for this report.

Signatories

Author

Josie Meuli - Senior Advisor

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

Appointments and Performance Review Committee

29 March 2017

Process for board appointments to Auckland Council's Council Controlled Organisations

File No.: CP2017/04122

Purpose

1. The committee are required to make decisions regarding the:

(i) process for appointments to the boards of Auckland Council’s substantive Council Controlled Organisations (CCOs) for the 2017 board appointment programme

(ii) size of council’s CCO boards (number of directors) and

(iii) criteria for appointing council’s director recruitment agency.

Executive summary

2. The current process for appointing directors to any council-controlled organisation (CCO) and external partnership board is summarised below:

Council is currently at the beginning of this process for the directors whose terms expire in 2017.

3. The terms of sixteen directors of substantive CCOs will be expiring on 31 October 2017. The Appointments and Performance Committee is required to make decisions regarding

· whether or not to reappoint these directors

· the skill requirements to fill any vacancy

· appointment of the nomination and interview panel members, for any vacancy.

4. The number of directors on each of council’s CCO boards is considered in this report. Staff recommend the reduction of the size of three CCO boards, being Regional Facilities Auckland (from nine directors to eight), Watercare Services Limited (from eight directors to seven) and Development Auckland Limited (from eight directors to seven).

5. These proposed reductions are based on research relating to the recommended size of boards, the size and complexity of the CCOs, and the workload of the boards. Feedback from the chairs of the respective boards has been sought and considered.

6. A process is about to commence that will enable staff to select a recruitment adviser to assist with the director recruitment process. Staff seek guidance from the committee regarding the proposed attributes and if there are additional considerations to be incorporated into the evaluation of potential director recruitment providers.

Recommendation/s

That the Appointments and Performance Review Committee:

a) agree that the number of directors on each of the following boards be reduced from 1 November 2017, being:

i) Regional Facilities Auckland from nine to eight directors

ii) Watercare Services Limited from eight to seven directors

iii) Development Auckland Limited from eight to seven directors.

b) note that the following criteria should be considered when staff advertise and evaluate proposals from recruitment advisers to assist with director appointment processes:

i) a track record of:

· successful recruitment into the public and private sector

· being involved in the appointment of a diverse range of candidates

· demonstrated networks of high quality and diverse candidates.

ii) key personnel who:

· can provide holistic advice to council having understood our goals and drivers

· have experience with high quality and diverse appointments and the use of innovative approaches to achieve a diverse candidate pool

· have the ability to support the nomination and interview panel process, and present at council meetings.

c) note the process for appointing directors to the council-controlled organisations, and also note that further process reports will only be provided to the committee if there is a need to deviate from the policy.

d) note that a confidential report is included within the agenda and provides information for the committee to make its decision regarding the directors on Auckland’s council-controlled organisations who are due to retire on 31 October 2017, and any consequential skill requirements, for vacancies created.

e) note that the final appointment decisions will be made publicly available at the conclusion of the appointment process but that the reports and their attachments will remain confidential.

Comments

Retiring directors

7. The terms of the following directors of substantive CCOs will be expiring on 31 October 2017:

(i) John Robertson, Lisa Bates and Andrew Collow - Regional Facilities Auckland

(ii) Rabin Rabindran and Paula Rebstock - Auckland Transport

(iii) Tony Lanigan, Catherine Harland and David Thomas - Watercare Services Limited

(iv) Keith Taylor, Hinerangi Raumati and Linda Robertson - Auckland Council Investments Limited

(v) Richard Aitken, Anne Blackburn, and Evan Davies – Development Auckland Limited

(vi) Norm Thompson and Franceska Banga – Auckland Tourism, Events and Economic Development.

8. The committee is required to make decisions whether or not to reappoint these directors. A confidential report included in the committee’s agenda considers these issues. If the recommendations of that report are approved, the committee will also need to make decisions regarding:

(i) skill requirements to fill consequential vacancies

(ii) appointment of the nomination and interview panel members.

Size of CCO boards

9. Consideration should be given periodically to the number of directors on the board of each of the CCOs, to ensure that the board is made up of an appropriate number of directors given the size and complexity of the CCOs, and the workload of the boards.

10. The Institute of Directors advice suggests the optimum number of directors depends on the size of the organization and recommends that medium to large sized companies should have six to eight directors. There is international research that suggests that the optimum size for a board is between six and nine directors.

11. However, there is no universally agreed optimum number of directors for a board, and the success of a company often depends on who is on the board, rather than the size of the board.

12. Factors to consider when assessing the appropriate size of a board include the size and complexity of the CCO, the workload of the board, and feedback from the chair of the relevant board. Consideration should also be given to the skills and experience required of the directors on the board, as there may need to be directors with highly specialised skills that may necessitate having additional directors.

13. Consideration should also be given to:

· skills and experience: a diverse range of educational and vocational backgrounds will enrich the discussion of a board and help better decisions be made

· diversity: a mix of ethnicity, age, and gender all contribute to better representing the community at large and will help a board form insightful decisions.

14. Consideration is given to the size of each CCO board below. Staff have met with the CCO board chairs, and incorporate their feedback into this report.

Auckland Council Investments Limited

15. ACIL originally had a board of five directors. However, ACIL’s functions were reduced during the 2014 CCO review, with management of the Diversified Financial Assets Portfolio (DFAP) moved from within this entity to council’s Treasury department.

16. As a result of this reduction of responsibility, ACIL was reduced to a board of three directors. The ACIL chair, Keith Taylor, has advised that the board can competently undertake its duties with three directors.

17. Taking account of the ACIL’s reduced portfolio and reduction of the board in 2014, staff agree with the Chair’s recommendation to retain a board of three directors.

Auckland Tourisms, Events and Economic Development

18. ATEED has a board of seven directors. It operates in a relatively complex environment, which requires experience at a governance level in a number of different areas. These areas include, tourism, innovation, sector development (in a number of distinct sectors), major events, and business attraction. Each of these areas requires relatively specific expertise, which necessitates a board that is relatively large when compared to the size of the budget under ATEED’s control.

19. The ATEED chair, David McConnell, and staff recommend retaining the ATEED board of seven directors.

Regional Facilities Auckland

20. The RFA board has nine directors.

21. The chair, Sir Don McKinnon recommends retaining the current board of nine directors recognising RFA’s multi-stream activities which are diverse and complex when compared to the single-stream activities of entities such as Watercare.

22. RFA is now well established, having brought together and developed a single operating framework for Auckland’s regional facilities. The focus at this stage is more operational than strategic, although the board requires knowledge of (and relationships with) the arts, cultural, and sporting communities.

23. Staff recommend a reduction of RFA board from nine to eight directors, commencing 1 November 2017. A further discussion could be programmed for 2018, to monitor whether a board of eight is sufficient.

Development Auckland Limited (Panuku)

24. Panuku was established in 2014-2015 with a board of nine directors. On establishment, the Panuku board consisted of three former Auckland Council Properties Limited directors, three former Waterfront Auckland directors, and three new directors. It was intended to review the size of the board post establishment.

25. Following the retirement of former chair, Sir John Wells the board has eight directors. The chair, Richard Aitken has advised that the current board of eight directors can competently undertake the workload that is programmed for the next seven months and could reduce the board to seven directors from 1 November 2017.

26. Panuku’s activities are focused on property management, acquisitions and disposals, development and place making. These are relatively interrelated areas of activity, and do not require a large variety of skills or experience on the board.

27. Taking account of advice from the chair, staff recommend reducing the board to seven directors from 1 November 2017. A further review could be programmed for 2018, to monitor whether a board of eight is appropriate.

Auckland Transport

28. Auckland Transport has a board of nine directors, eight are council appointed voting directors, and one is a non-voting New Zealand Transport Agency director.

29. Auckland Transport is developing and delivering a multi-modal public transport system that involves the delivery of a number of projects, some of which are very large. To achieve this goal it must manage and balance complex national and regional goals and relationships, thus generating greater levels of complexity.

30. New technologies will also play a significant role in Auckland Transport’s future business.

31. The chair, Lester Levy, recommends retaining the current board of eight council appointed directors, recognising the board has had three vacancies since 2016, and the current work programme for Transport is significant over the coming three years.

32. Taking account of advice from the chair, the size and complexity of the Auckland Transport business, the major capital programme and associated risks, staff recommend that the Auckland Transport board remain at eight directors, with a review of board size in 2019.

Watercare Services Limited

33. Watercare has a board of eight directors but has carried one director vacancy from 31 October 2016. The vacancy was not able to be filled during the 2016 board appointment programme. The board is therefore currently operating with seven directors.

34. Prior to the formation of Auckland Council, Watercare served as a wholesaler of water and wastewater services. The new structure brought together the water and wastewater retail functions of the legacy councils into a single business. The transition to the new structure has been completed now. Accordingly, the initial complexity faced by the Watercare board associated with amalgamating the retail businesses is now reduced.

35. Watercare has a relatively limited scope of activities, although it has a large capital programme, and the risks associated with that. However, a large board is not required due to the relatively lower complexity of the business.

36. The chair, Margaret Devlin has advised that the current board of seven directors is able to complete the current work programme. Staff, therefore, recommend reducing the number of directors on the Watercare board to seven. A further discussion could be programmed for 2018 to monitor whether a board of seven is sufficient.

Criteria for recruitment agency director appointments

37. Council currently uses a recruitment adviser to help recruit CCO directors. The recruitment advisor is involved in attracting potential directors to the CCO roles, assisting with the shortlisting and interviewing process, and reference checking.

38. Having an external recruitment adviser assists with having “an objective and transparent process for the appointment” of CCO directors, as is required by the Local Government Act 2002. An external recruitment adviser provides objective, independent advice into the process.

39. Director recruitment is a specialist area. Not only must candidates with the appropriate governance skills and experience be found, consideration must also be given to the appropriate fit of potential candidates within the existing board. Recruitment advisers should also have established networks with directors, which would allow them to identify and attract potential candidates.

40. The contract with the current recruitment adviser has expired. A process is about to commence that will enable staff to select a recruitment adviser to assist with the director recruitment process. Council is undertaking an open competitive tender process.

41. Staff recommend that the following attributes should be considered when appointing a recruitment provider:

(i) a track record of:

· successful recruitment into the public and private sector

· being involved in the appointment of a diverse range of candidates

· demonstrated networks of high quality and diverse candidates.

(ii) key personnel who:

· can provide holistic advice to council, having understood our goals and drivers

· have experience with high quality and diverse appointments and the use of innovative approaches to achieve a diverse candidate pool

· have the ability to support the nomination and interview panel process, and present at council meetings.

42. Guidance is requested from the committee as to whether there are any other attributes that staff should consider when evaluating potential recruitment providers.

Consideration

Local board views and implications

43. Board appointments to CCOs are the role of the governing body. Local boards are able to participate in the nomination process for each director vacancy.

Māori impact statement

44. Council’s board appointment policy aims to appoint a diverse range of directors to all boards.

45. This can have positive impacts for Māori by creating opportunities that contribute to the development of Māori capacity in governance, and increase the number of Māori in decision making roles within the council group.

46. In line with the appointment policy, an Independent Māori Statutory Board member can be appointed on the nomination and interview panels established for the director appointment program.

Implementation

47. Staff from the CCO Governance and External Partnerships team will manage the director appointment program for 2017 and the recruitment agency evaluation and appointment.

Attachments

There are no attachments for this report.

Signatories

Author

Josie Meuli - Senior Advisor

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

Appointments and Performance Review Committee

29 March 2017

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

That the Appointments and Performance Review Committee:

a) exclude the public from the following part(s) of the proceedings of this meeting.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution follows.

This resolution is made in reliance on section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or section 7 of that Act which would be prejudiced by the holding of the whole or relevant part of the proceedings of the meeting in public, as follows:

C1 2017 Board Appointment programme for council-controlled organisations

Reason for passing this resolution in relation to each matter

Particular interest(s) protected (where applicable)

Ground(s) under section 48(1) for the passing of this resolution