Agenda of Appointments, Performance Review and Value for Money Committee

I hereby give notice that an ordinary meeting of the Appointments, Performance Review and Value for Money Committee will be held on:

Date:

Time:

Meeting Room:

Venue:

Thursday, 2 August 2018

9.30am

Room 1, Level 26
135 Albert St
Auckland

Komiti Tohu me te Arotake Tūranga Mahi, me te Rite o te Whiwhi ki Tā Tērā i Utu Ai / Appointments, Performance Review and Value for Money Committee

OPEN AGENDA

MEMBERSHIP

Chairperson	Hon Phil Goff, CNZM, JP
Deputy Chairperson	Hon Christine Fletcher, QSO
Members	Cr Josephine Bartley
	Cr Ross Clow
	Cr Chris Darby
	Cr Richard Hills
	Cr Penny Hulse
	Cr Desley Simpson, JP

Ex-officio	Deputy Mayor Bill Cashmore
	IMSB Member David Taipari

(Quorum 5 members)

Suad Allie

Governance Advisor

27 July 2018

Contact Telephone: (09) 977 6953

Email: suad.allie@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

Terms of Reference

Responsibilities

The Council Appointments, Performance Review and Value for Money 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.

4. Monitor and report to the Governing Body on the implementation of service delivery reviews required under s17A of the Local Government Act 2002, and the recommendations arising from those reviews

5. Approve the scheduling of the forward s17A work programme, and recommend to the Governing Body the terms of reference for individual reviews

6. Request reports on Auckland Council parent and CCO value for money, savings and effectiveness-focused initiatives that are beyond the scope of s17A reviews, and make recommendations on these reports to the Governing Body.

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.

Appointments, Performance Review and Value for Money Committee

02 August 2018

ITEM TABLE OF CONTENTS PAGE

1 Apologies 7

2 Declaration of Interest 7

3 Confirmation of Minutes 7

4 Petitions 7

5 Public Input 7

6 Local Board Input 7

7 Extraordinary Business 8

8 Value for Money (s17A) Review – Group Financial Services 9

9 Process for the appointment of new directors to the Auckland War Memorial Museum and Museum of Transport and Technology 23

10 Process for the appointment of directors to the board of Auckland Council Investments Limited 27

11 Review of the Appointment and Remuneration Policy for Board Members of Council Organisations 29

12 Process for the appointment of directors to Contemporary Arts Foundation and an update for the appointment of chairs to Auckland Council's council-controlled organisations 83

13 Consideration of Extraordinary Items

PUBLIC EXCLUDED

14 Procedural Motion to Exclude the Public 87

C1 Board Appointments for the Auckland War Memorial Museum and Museum of Transport and Technology 87

C2 Appointment of trustees to the Contemporary Art Foundation 87

C3 Appointment of directors to the board of Auckland Council Investments Limited 87

C4 Appointment of candidates for three vacancies on Auckland Council's council-controlled organisations 88

C5 Update on Chief Executive Stephen Town's performance objectives 2017/2018 88

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, Performance Review and Value for Money Committee:

a) confirm the ordinary minutes of its meeting, held on Thursday, 5 July 2018, 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 Governance 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.”

Appointments, Performance Review and Value for Money Committee

02 August 2018

Value for Money (s17A) Review – Group Financial Services

File No.: CP2018/12974

Te take mō te pūrongo / Purpose of the report

1. To approve the terms of reference for the group financial services value for money review so that it can be recommended to the Governing Body for final approval.

Whakarāpopototanga matua / Executive summary

2. At its 22 March 2018 (GB/2018/57) meeting the Governing Body approved the terms of reference for the Appointments, Performance Review and Value for Money (APRVFM) Committee. This incorporated the oversight for the value for money review programme under section 17A of the Local Government Act 2002.

3. This report is seeking approval from the APRVFM Committee for the next scheduled review being group financial services. This follows eight previously approved reviews which have been completed or are underway.

4. This review is proposed as it builds on previous review work that comprised the organisational support budget groupings in the long-term plan including:

· information, communications and technology

· group procurement

· customer services

· communications and engagement.

5. Organisational support represents a large group expenditure over 10 years ($4.2 billion in operating expenditure and $1.3 billion in capital expenditure).

6. The review of group financial services will also have a bearing on the development of a group corporate support strategy.

Ngā tūtohunga / Recommendation/s

That the Appointments, Performance Review and Value for Money Committee:

a) approve the terms of reference for the group financial services value for money review, so that it can be recommended to the Governing Body for final approval.

Tātaritanga me ngā tohutohu / Analysis and advice

Previous related decisions:

Date	Committee	Recommendation Number	Decision
21 March 2017	Finance and Performance	FIN/2017/23	endorsed a value for money programme for the council group and approved the initial four terms of reference (three waters, domestic waste, communications and engagement, investment attraction and global partnerships)
21 September 2017	Finance and Performance	FIN/2017/128	two terms of reference (group procurement and parks and open spaces) were approved
22 March 2018	Governing Body	GB/2018/57	approved oversight for the value for money (S17A) programme be moved to the Appointments, Performance Review and Value for Money (APRVFM) Committee
24 May 2018	Governing Body	GB/2018/84	two terms of reference (group customer services, and group information, communication and technology services) were approved

7. The group financial services review proposed in this report is an amalgamation of two previously proposed financial reviews; those being the financial planning and policy review and the financial and transactional services review. This combined review will cover:

a) financial transactions

b) business support including financial, accounting and commercial activities

c) technical accounting

d) treasury

e) reporting

f) capital planning

g) tax and revenue management

h) financial planning and budgeting.

8. This report is seeking approval from this Committee to recommend to the Governing Body the terms of reference for the group financial services review as attached in Attachment A.

9. The reasons for proposing this review, which differs from the current forward programme timetable, includes acknowledgement that:

· work on opportunities for group shared services is about to get underway. This involves identifying operational opportunities across the group and removing duplication. The work is being undertaken with sponsorship from the group Chief Financial Officers. The value for money review will complement the development of the strategy by reviewing areas of significant group expenditure with high levels of commonality and potential duplication.

· Auckland Tourism, Events and Economic Development has just completed a review of its purpose and is in the process of implementing changes to its organisation. It is desirable that the continuation of the economic development review await the outcomes of that work. As a result, the economic development s17A review has been rescheduled.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Terms of Reference Group Financial Services VFM review	11

Ngā kaihaina / Signatories

Author

Sally Garrett – Programme Manager – Value for Money

Authorisers

Kevin Ramsay - General Manager Corporate Finance and Property

Sara Hay – Acting Group Chief Financial Officer

Phil Wilson - Governance Director

Appointments, Performance Review and Value for Money Committee

02 August 2018

Process for the appointment of new directors to the Auckland War Memorial Museum and Museum of Transport and Technology

File No.: CP2018/12739

Te take mō te pūrongo / Purpose of the report

1. To provide an overview of the process to appoint directors to the boards of the Auckland War Memorial Museum (AWMM) and the Museum of Transport and Technology (MOTAT).

Whakarāpopototanga matua / Executive summary

2. Auckland Council appoints directors to the boards of AWMM and MOTAT. Regional Facilities Auckland (RFA) supports the board appointment process by undertaking the candidate selection process and makes recommendations to council as per the advisory and management agreement between Auckland Council and RFA.

3. The council appoints five of the ten members to the AWMM board. There are two board appointments to be considered this year by council.

4. The council appoints six of the ten members to the MOTAT board. There are three board appointments to be considered this year by council.

5. A confidential report is included in this agenda which provides the relevant information for the committee to make its decisions.

Ngā tūtohunga / Recommendation/s

That the Appointments, Performance Review and Value for Money Committee:

a) note there is a confidential report on this meeting agenda providing recommendations regarding the appointment and/or reappointment of directors to the Auckland War Memorial Museum and Museum of Transport and Technology boards

b) note that Regional Facilities Auckland supports the board appointment process and makes recommendations to Auckland Council

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

Horopaki / ContextLinks to legislation

6. The Auckland War Memorial Museum Act 1996 and the Museum of Transport and Technology Act 2000 govern the board appointment processes of these institutions. The advisory and management agreement requires RFA to recommend candidates to Auckland Council for these appointments.

7. A sub-committee of the RFA board has undertaken a candidate selection process for these appointments which is consistent with Auckland Council’s Appointment and Remuneration Policy for Board Members of Council Organisations.

8. A separate confidential paper on today’s agenda considers the recommendations made by RFA.

Auckland War Memorial Museum

9. Auckland Council appoints five of the ten members to the AWMM board based on RFA’s recommendations. Four board members are appointed by the Auckland Museum Institute, and one board member is appointed by Taumata-a-Iwi.

10. RFA’s board appointment subcommittee has worked with the Auckland Museum Institute to jointly interview and identify candidates for the AWMM board.

Museum of Transport and Technology

11. Auckland Council appoints six of the ten members to the MOTAT board. The other four are appointed by the MOTAT Society.

12. RFA’s board appointment sub-committee worked with the deputy chair of the MOTAT board to jointly interview and identify candidates for the MOTAT board. The MOTAT Society runs a separate board appointment process for their appointments.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe /
Local impacts and local board views

13. Board appointments are the role of the Governing Body, however information on the vacancies was distributed to local board members. This was to allow local board members to put forward candidates they thought appropriate for the roles.

Tauākī whakaaweawe Māori / Māori impact statement

14. One AWMM board member is appointed by Taumata-a-Iwi. Taumata-a-Iwi is a committee established to ensure that the AWMM board’s policy aligns with Māori values, and matters enshrined in te Tiriti o Waitangi. Taumata-a-Iwi also advises on matters of Māori protocol within the museum and between the museum and tangata whenua at large.

15. The MOTAT board has a statutory duty to observe and encourage the spirit of partnership and goodwill envisaged by te Tiriti o Waitangi, including implications for Māori, and elements of Māori cultural property that only tangata whenua can provide appropriate care for.

Ngā ritenga ā-pūtea / Financial implications

16. The costs associated with these appointments will be met from existing RFA budgets.

Ngā raru tūpono / Risks

17. There are risks associated with all board appointments including reputational and governance risks.

1. RFA have developed a robust appointment process and recognise the risks associated with board appointments, including reputational and governance risks.

2. The following controls are in place to mitigate these risks:

(i) reviewing the current skills and tenure of each board member to outline skill gaps and experience

(ii) screening candidates to ensure each meet the skill requirements

(iii) requiring candidates to complete a consent form prior to interview, confirming that nothing would disqualify them from being a director (Companies Act 1993)

(iv) probity and reference checks for candidates approved for appointment.

18. RFA is aware of the reputational risks if a candidate’s private information is breached during the confidential appointment process. To mitigate this risk council staff and RFA will continue to highlight the need to maintain confidentiality to all who participate and assist in the board appointment process.

Ngā koringa ā-muri / Next steps

19. Following approval by this committee, RFA staff will notify the board appointees and make the appointment information publicly available.

Ngā tāpirihanga / Attachments

There are no attachments for this report.

Ngā kaihaina / Signatories

Author

Josie Meuli - Senior Advisor

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

Appointments, Performance Review and Value for Money Committee

02 August 2018

Process for the appointment of directors to the board of Auckland Council Investments Limited

File No.: CP2018/09780

Te take mō te pūrongo / Purpose of the report

1. To approve the process undertaken to appoint to the board of the council-controlled organisation Auckland Council Investments Limited (ACIL).

Whakarāpopototanga matua / Executive summary

2. The proposal to disestablish the council-controlled organisation ACIL, with the shares in Ports of Auckland Limited (POAL) and Auckland International Airport Limited (AIAL) to be transferred to council was adopted by the Governing Body on 28 June 2018 as part of the Long-term Plan 2018-2028.

3. The shares in POAL and AIAL were transferred to council on 2 July 2018.

4. ACIL will be wound up and removed from the companies register as soon as practicable (possibly by the end of September 2018). Before ACIL can be wound up, the accounts for the Financial Year 2017/2018 (FY 17/18) must be finalised and the declaration of the final dividend must be prepared. Any issues that emerge during the wind-up period must also be resolved.

5. The current directors have indicated an intention to resign following the finalisation of the FY17/18 accounts. At least one director must therefore be appointed to the board of ACIL in order to declare the final dividend and resolve any issues that emerge before ACIL is wound up and removed from the companies register.

6. A report on this committee’s confidential agenda recommends the appointment of a director to ACIL. The appointment of one director to the ACIL board addressed by this report will take effect from the resignation of the current directors until the company is wound up and removed from the companies register.

7. The process for directors outlined in the council’s Appointments and Remuneration Policy for Board Members of Council Organisations has not been used in this instance as the term of the appointment is likely to be very short and the skills required to complete all necessary tasks are readily available.

Ngā tūtohunga / Recommendation/s

That the Appointments, Performance Review and Value for Money Committee:

a) note that there is a confidential report on the meeting recommending appointment of one director to the board of Auckland Council Investments Limited

b) note that the confidential report contains personal information about the candidates.

Ngā tāpirihanga / Attachments

There are no attachments for this report.

Ngā kaihaina / Signatories

Author

Ella Kay - Senior Advisor - CCO Governance & External Partnerships

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

Appointments, Performance Review and Value for Money Committee

02 August 2018

Review of the Appointment and Remuneration Policy for Board Members of Council Organisations

File No.: CP2018/09779

Te take mō te pūrongo / Purpose of the report

1. To review and agree changes to council’s Appointment and Remuneration Policy for Board Members of Council Organisations (the policy) as a consequence of the disestablishment of the council-controlled organisation, Auckland Council Investments Limited (ACIL).

Whakarāpopototanga matua / Executive summary

2. As part of the Long-term Plan 2018-2028 (LTP) the Governing Body resolved to disestablish the council-controlled organisation ACIL, with the shares in Ports of Auckland Limited (POAL) and Auckland International Airport Limited (AIAL) to be transferred to council.

3. As a consequence, council will directly hold shareholder relationships with POAL and AIAL and will have a direct role in the appointment of directors to the boards of POAL and AIAL.

4. The policy has been amended to address the appointment process to the boards of POAL and AIAL. The key changes are the insertion of Part Four: POAL and Part Five: AIAL, which set out the process for appointing to the boards.

5. This report recommends that the amended policy is adopted by the Appointments, Performance Review and Value for Money Committee.

Ngā tūtohunga / Recommendation/s

That the Appointments, Performance Review and Value for Money Committee:

a) adopt the amended Appointment and Remuneration Policy for Board Members of Council Organisations which includes new sections on:

· the process for the appointment of directors to the boards of Ports of Auckland Limited

· shareholder responsibilities for Auckland International Airport Limited including voting at the Annual General Meeting.

Horopaki / Context

6. As part of the LTP the Governing Body resolved to disestablish the council-controlled organisation ACIL, with the shares in POAL and AIAL to be transferred to council.

7. The transfer of ACIL’s shares in POAL and AIAL to council took place on 2 July 2018. As a consequence, council now directly holds shareholder relationships with POAL and AIAL.

8. Council is required to adopt a policy that sets out an objective and transparent process for the appointment of directors to the boards of council organisations under section 57 of the Local Government Act 2002 (LGA 2002). This committee has the delegation to approve policies relating to appointments of directors to the boards of council organisations.

9. Both POAL and AIAL fall within the definition of ‘council organisation’ under section 6 of the LGA 2002 and are therefore subject to the policy. The amendments to the policy are recommended to address the process for appointing to the boards of POAL and AIAL.

10. As part of the proposal to disestablish ACIL the Finance and Performance Committee (FIN/2018/83):

recommended that the Appointments and Performance Review and Value for Money Committee adopt a revised Appointment and Remuneration Policy for Board Members of Council Organisations including Annex A of the draft memorandum of understanding between Auckland Council and Ports of Auckland Limited

Tātaritanga me ngā tohutohu / Analysis and advice

Summary of Changes

11. A summary of changes to the policy are as follows:

Change	Description	References
minor changes to ‘Background’ section	Definition of ‘port company’ included, application updated to include new policy parts	Cl 3.1 and 3.2, pages 4 - 6
insertion of Part Four: Ports of Auckland Limited	Sets out process for appointing to POAL board	Cl 16, pages 27 - 29
insertion of Part Five: Auckland International Airport Limited	Sets out process for appointing to AIAL board	Cl 17, page 30

12. To support the changes in responsibilities outlined in the amended policy, the CCO Governance and External Partnerships team will support the:

· Appointments, Performance Review and Value for Money Committee, including the particular responsibilities of the chair and deputy chair

· Auckland Council chief executive and governance director

· Auckland Council chief financial officer (and alternates).

Ports of Auckland Limited

13. Council holds 100 per cent of the shares in POAL and therefore holds the ability to appoint to appoint directors to the POAL board solely. Port companies are statutorily excluded from being council-controlled organisations under the LGA 2002.

14. As part of the proposal to disestablish ACIL, a memorandum of understanding was agreed between council and POAL. This memorandum of understanding sets out the relationship to emerge between council and POAL, including the process for appointing to the POAL board.

15. This memorandum of understanding was adopted by council as part of Long-term Plan 2018-2028 decision-making on the disestablishment of ACIL (FIN/2018/83). A copy of the final memorandum of understanding is appended at Attachment B for reference.

16. The recommended policy specifies the process for appointing to the POAL board (at Part Four, page 27 of the policy) which reflects the agreed process contained in Annex A to the memorandum of understanding.

17. The agreed process reflects the Financial Markets Authority Corporate Governance guidelines and reflects the board appointment practice that publicly listed companies generally undertake. Moreover, the agreed process recognises POAL’s function as a commercial entity, while taking into account council’s role as a shareholder.

18. This process includes the following aspects:

· Board member competencies, skills and knowledge: to be determined by the chair of the POAL board and the mayor

· Candidate search: to be undertaken by a specialist board appointment firm

· Screening and shortlisting: to be undertaken by a committee of the POAL board. A shortlist will be provided to the mayor, who will have an opportunity to advise if any shortlisted candidates will be unsuitable for appointment to the POAL board

· Interviewing and assessment of candidates: to be interviewed and assessed by the POAL board. Reference checks will be performed at this stage of the process (including an assessment of actual or perceived conflicts of interest)

· Recommendation of candidate: through the interviewing and assessment of candidates, the POAL board will then recommend a preferred candidate for appointment

· Appointment: to be undertaken by the POAL Appointments Panel (comprised of chair of POAL board, the mayor and the chief executive of council)

· Remuneration: to be determined by the Appointments, Performance Review and Value for Money Committe based on a benchmarking exercise undertaken by POAL board in conjunction with an independent assessment

· Removal of board members: POAL board members may at any time be removed from office by ordinary resolution of the shareholder(s) as set out in POAL’s constitution

Auckland International Airport Limited

19. Council has a 22.3 per cent shareholding in AIAL and holds the shareholder function of voting on resolutions at the AIAL Annual General Meeting (AGM) alongside AIAL’s other shareholders.

20. As part of the proposal to disestablish ACIL a relationship principles document setting out the nature of the shareholder relationship between council and AIAL was noted by council. This document is appended at Attachment C for reference.

21. At the time of writing this report a recommendation had been made to the Governing Body to consider at its 26 July 2018 meeting a delegation to council’s chief financial officer (with the executive director – Auckland Investment Office and treasurer as alternates) to vote on AIAL AGM matters.

22. Appointments to the board of AIAL are one of the aspects resolved at AIAL AGMs through the shareholder voting mechanism. The amended policy includes a section (at Part Five, page 30 of the policy) which sets out the proposed process for shareholder voting on appointments to the AIAL board.

23. This proposed process includes the following aspects:

· The chief financial officer and governance director will meet with the chair of AIAL prior to the AIAL AGM to discuss possible board appointments (as well as other upcoming AGM resolutions)

· The chief financial officer and governance director will then brief the chair and deputy chair of the committee on possible board appointments (as well as other upcoming AGM resolutions). The chair and deputy chair of the committee will then provide guidance to the chief financial officer on these matters.

· The chief financial officer will then attend the AIAL AGM and vote on appointments to the AIAL board (as well as other AGM resolutions)

· Appointments to the board of AIAL will brought to the committee periodically as part of briefing on broader AIAL matters

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe /
Local impacts and local board views

24. Approval of the policy is delegated to the Appointments, Performance Review and Value for Money Committee by the Governing Body. As such, local board views have not been sought on the recommended amendments to the policy.

25. Local board views were sought on the proposal to disestablish ACIL through LTP consultation process.

Tauākī whakaaweawe Māori / Māori impact statement

26. The proposed amendments to the policy and the processes for appointing to the POAL and AIAL boards do not directly impact mana whenua.

27. The policy itself is designed to set out a transparent process for the appointment to council organisations. This process reflects Māori interests as follows:

· establishing an understanding and commitment to council’s obligation to te Tiriti o Waitangi as a core competency for appointments to boards of council’s substantive council-controlled organisations, and

· reserving a role for the Independent Māori Statutory Board as part of the appointment process for boards of council’s substantive council-controlled organisations.

28. The policy also encourages diversity on boards, which can provide opportunities for Māori directors.

Ngā ritenga ā-pūtea / Financial implications

29. The approval of this policy does not have any financial implications.

Ngā raru tūpono / Risks

30. The approval of this policy does not carry any risks.

31. The approval of the amended policy sets out a transparent process for appointments to the boards of the council organisations POAL and AIAL and mitigates the following risks accordingly:

· Governance: the amended policy clearly sets out council’s governance role as a shareholder and appointer to the boards of POAL and AIAL.

· Legal/compliance: the amended policy ensures council’s compliance with section 57 of the LGA 2002 (i.e. to adopt a policy that sets out an objective and transparent process for the appointment of directors to the boards of council organisations).

· Reputational: the amended policy protects against reputational risk that could stem from a lack of transparency or compliance, or poor process in respect of appointments to the boards of POAL and AIAL.

Ngā koringa ā-muri / Next steps

32. The proposed amendments to the policy will be established and published on the council website and intranet.

33. POAL and AIAL will be notified of the updated policy.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Amended Appointment and Remuneration Policy for Board Members of Council Organisations	35
b ⇩	Memorandum of Understanding Auckland Council and Ports of Auckland Limited	69
c ⇩	Relationship Principles Document Auckland Council and Auckland International Airport Limited	81

Ngā kaihaina / Signatories

Author

Ella Kay - Senior Advisor - CCO Governance & External Partnerships

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

Appointments, Performance Review and Value for Money Committee

02 August 2018

Process for the appointment of directors to Contemporary Arts Foundation and an update for the appointment of chairs to Auckland Council's council-controlled organisations

File No.: CP2018/12952

Te take mō te pūrongo / Purpose of the report

1. To update the committee on the process for filling the three chair vacancies on Auckland Council’s council-controlled organisations (CCOs) and to receive information about the process to appoint four trustees to the board of the Contemporary Arts Foundation, a council-controlled organisation.

Whakarāpopototanga matua / Executive summary

Contemporary Arts Foundation

2. Auckland Council also has the ability to appoint up to five trustees on the board of the Contemporary Arts Foundation (CAF). CAF has undertaken an appointment process based on the requirements of its trust deed and which is consistent with the council’s Appointment and Remuneration Policy for Board Members of Council Organisations.

Update for appointment of chairs to the CCOs

3. The 2018 CCO board appointment programme is extensive due to the number of chair appointments. The terms of three CCO chairs will end on 31 October 2018. The three chairs are:

· David McConnell – chair of Auckland Tourism, Events and Economic Development Limited

· Richard Aitken – chair of Panuku Development Auckland Limited

· Sir Don McKinnon – chair of Regional Facilities Auckland Limited.

4. This committee agreed to commence the CCO board appointment process in March 2018, with the aim of approving any proposed chair appointments at the committee’s 5 July 2018 and 2 August 2018 meetings.

5. The process to fill the remaining CCO director vacancies commenced in July 2018, with the appointments now being brought for committee approval in October or November 2018.

6. A confidential report on today’s agenda outlines the preferred candidates for appointment to the chairs of these three substantive CCOs.

Ngā tūtohunga / Recommendation/s

That the Appointments, Performance Review and Value for Money Committee:

a) note that a confidential report included on today’s committee agenda provides information to make decisions on the preferred candidates for the chairs of Auckland Tourism, Events and Economic Development, Regional Facilities Auckland and Panuku Development Auckland

b) note that there is also a confidential report on today’s committee agenda providing a recommendation on the appointment of four trustees to the board of the Contemporary Arts Foundation.

c) note that the confidential reports contains personal information about the candidates.

Horopaki / Context

7. The board appointment process for appointing directors to any substantive CCOs is outlined in the diagram below:

8. The Appointments, Performance Review and Value for Money Committee (the committee) is delegated to appoint directors to the CCOs.

9. The confidential reports on this agenda provide advice and options to assist the committee to make decisions regarding the appointment of chairs on CCOs. This is the final step in the process outlined above.

Contemporary Arts Foundation (CAF)

10. CAF has undertaken an appointment process based on the requirements of its trust deed which is consistent with the council’s Appointment and Remuneration Policy for Board Members of Council Organisations. This process included:

· identifying skills, knowledge and experience, including current or future gaps on the board

· seeking candidates through the networks of its existing trustees and contacts with organisations in Auckland

· shortlisting and interviewing appropriately qualified candidates

11. For these appointments, CAF considered it important to maintain some continuity on the board as well as introduce some strategic planning skills. Strategic planning is important because of the challenges presented by the Auckland Manukau Eastern Transport Initiative (AMETI) and likely impacts on its premises in Pakuranga.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe /
Local impacts and local board views

12. Board appointments to CCOs are the role of the Governing Body. Local boards can participate in the nomination process for each director vacancy. The nomination of a candidate requires the consent of that candidate.

Tauākī whakaaweawe Māori / Māori impact statement

13. Council’s Appointment and Remuneration Policy for Board Members of Council Organisations aims to achieve a diverse range of directors to all CCO boards.

14. This can have positive impacts for Māori by creating opportunities for Māori directors.

15. In line with the policy, an Independent Māori Statutory Board member (Chair, David Taipari) participated on the selection panel to provide a Māori perspective throughout the process.

Ngā ritenga ā-pūtea / Financial implications

16. The costs associated with these appointments will be met from existing budgets.

Ngā raru tūpono / Risks

17. There are risks associated with all board appointments including:

(i) Reputational: all candidates are appropriately screened to meet the skill requirements for directors of a board such as this and have appropriate governance experience especially within public-facing entities. To mitigate any potential risks of disqualified directors or under-qualified candidates:

(a) a thorough due diligence process will be completed on all candidate applications in line with the council’s appointment policy

(b) short-listed candidates have completed the council’s director consent form prior to interview which requires directors to confirm that there is nothing that would disqualify them from being a director

(c) thorough reference checks of candidates who are approved for appointment to the CCOs are being conducted by Kerridge and Partners.

(ii) Reputational: breach of privacy if confidential candidate information is released to media prior to final decisions being made by the committee. Such breaches of privacy could create the risk that fewer and potentially less qualified candidates are attracted into future board appointment programmes. To mitigate the risk staff will continue to highlight the need for maintaining confidentiality during the board appointment programme.

(iii) Governance: the risk of an unbalanced board, such as a loss of institutional knowledge versus retaining board members for too long can mean the board lack innovation and fresh thinking.

Ngā koringa ā-muri / Next steps

18. Following approval from this committee, staff from the CCO Governance and External Partnerships Department will arrange for induction material to be provided to the new chairs.

19. Council’s external director recruitment support company, Kerridge and Partners will also maintain progress on the appointment programme for the other director vacancies for 2018.

Ngā tāpirihanga / Attachments

There are no attachments for this report.

Ngā kaihaina / Signatories

Author

Josie Meuli - Senior Advisor

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

Appointments, Performance Review and Value for Money Committee

02 August 2018

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

That the Appointments, Performance Review and Value for Money 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 Board Appointments for the Auckland War Memorial Museum and Museum of Transport and Technology

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