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Performance and Appointments Committee
25 February 2025
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Review of
the Appointment and Remuneration Policy for Board Members of Council
Organisations
File No.: CP2024/15949
Te take mō te
pūrongo
Purpose of the report
1. To
consider amendments to the Appointment and Remuneration Policy for Board
Members of Council Organisations (the Policy).
Whakarāpopototanga matua
Executive summary
2. The
Policy guides Auckland Council’s board appointments and is a requirement
of Section 57 of the Local Government Act 2002 (LGA).
3. In
December 2023, this committee approved scope for a review of the Policy which
was discussed with the committee at a workshop in March 2024.
4. The High
Court’s September 2024 decision in judicial review proceedings concerning
the appointment of the Watercare Chair (commenced in July 2024) identified
further issues with the Policy with regards to the requirement to consider the
relevance of knowledge of tikanga Māori for the governance of
council-controlled organisations (CCOs). These matters and other matters that
had been identified were discussed with the committee at a workshop in November
2024.
5. The
review also aligns with decisions made by the Governing Body in December 2024
that it would strengthen the CCO model by improving the board appointments
process [GB/2024/179].
6. The
topics covered in the review are:
· purpose of the Policy
· selection
panel composition
· eligibility criteria
for candidates
· process used for board appointments
· process
for reviewing board remuneration
· matters arising from
the judicial review Houkura v Auckland Council
· board reviews
· appointment and
remuneration of CCO chief executives.
7. Substantive
changes recommended for the Policy are to:
· amend
the membership of selection panels so that the Mayor
(or their representative) is an ex-officio member instead of the Mayoral Chief
of Staff
· establish
an approval group with the power to approve short-lists of candidates
· give
stronger guidance on how the council considers the relevance of tikanga
Māori to the governance of boards
· include
provisions relating to board performance reviews.
8. This
report also recommends that the committee refer amendments to the Statement of
Expectations for Council-controlled organisations with regards to provisions
relating to board performance reviews and the employment of CCO chief
executives to the Council-controlled Organisations Direction and Oversight
committee for further decision making.
Ngā tūtohunga
Recommendation/s
That the Performance and
Appointments Committee:
a) whakaae
/ approve the proposed amendments to the Appointment and Remuneration Policy
(the Policy) for Board Members of Council Organisations noted in Attachment A
to this report and to incorporate any amendments proposed by this committee
b) tūtohungia / recommend that the Council-controlled
Organisations Direction and Oversight Committee consider amendments to the
Statement of Expectations noted in Attachment A regarding reviews of board
performance and the selection of the chief executives of council-controlled
organisations
c) tautapa
/ delegate authority to the chair and deputy chair of this committee to
finalise and approve any other editorial amendments to the Policy.
Horopaki
Context
9. Auckland
Council is required to have a policy for the appointment and remuneration of
board members of Council organisations by Section 57 of the Local Government
Act 2002. The Appointment and Remuneration Policy for Board Members of Council
Organisations (the Policy) fulfils this requirement for
Auckland Council.
10. Periodic reviews of
policies ensure that they remain fit for purpose and facilitate good processes
and decision making. The Policy was last reviewed as a whole in 2017 [APR/2017/65].
11. Further amendments
to the Policy have been made since the 2017 review as follows:
· 25
August 2020 amendment of core competencies for directors of substantive
council-controlled organisations [APR/2020/10]
· 14
February 2023 amendments to:
o add
a core competency of relevant industry experience
o note
the ability for the committee to delegate the approval of candidate short-lists
o amendments
to align the appointment process for Port of Auckland to the process for
substantive CCOs [PACCC/2023/4].
12. In December 2023,
this committee agreed that a review of the Policy should cover the following
topics:
· purpose
of policy
· selection
panel composition
· eligibility
criteria for candidates
· amendments
for clarity and improved formatting
· the
process used for the recruitment of candidates
· the
process for reviewing remuneration
· how
the council will support the recruitment of candidates using external advisors [PACCC/2023/90].
13. These matters were
discussed with the committee at a workshop on 11 March 2024.
14. Since the scope of
the review was approved by the committee, additional issues have been
identified as noted below:
· In September
2024, the High Court judgment in judicial review proceedings Houkura v
Auckland Council found that before appointing the Watercare Chair at the
Committee’s June 2024 meeting, the council had not met the requirement in
section 57(3) of the Local Government Act 2002 to consider whether knowledge of
tikanga Māori is relevant to the governance of that CCO.
· Board
reviews: Additional issues have also been noted including the role and
oversight of boards through their biennial reviews. Board performance reviews
are a requirement in the Statement of Expectations for Substantive CCOs and,
with the exception of Port of Auckland, are not prescribed in the Policy.
· Provisions
related to the appointment and remuneration of CCO chief executives are
included in the Policy with a requirement to consult with a selection panel
that is not defined by the Policy.
15. These additional
matters were discussed with the committee in a workshop on 17 November 2024.
16. The Governing Body
resolved as part of decisions on CCO reform that improvements be made to the
board appointment and performance review process [GB/2024/179 i) v)]. The direction given for these
improvements was to focus on enabling:
· the
appointment of directors who have skillsets aligned with the delivery focus of
each CCO
· a
more streamlined process for the recruitment and appointment of directors.
17. The scope of this
policy review aligns with the direction given by the CCO reform programme and
supports the appointment and retention of the best possible candidates and to
improve and streamline the process for making appointments.
Tātaritanga me ngā
tohutohu
Analysis and advice
18. The matters within the scope of the policy review and issues
subsequently identified have been considered and options and proposed
amendments to the Policy and their rationale are noted below. The proposed
amendments to the text of the policy are noted in Attachment A.
19. It is recommended that the Committee delegates (to the chair and
deputy chair of this committee) the power to approve editorial amendments to
the Policy that improve clarity and formatting without changing the meaning of
the Policy.
20. In the recommended amendments, provisions relating to substantive
CCOs will also apply to Port of Auckland.
Purpose of policy
21. The Policy objectives are generally set to align with the
requirements of the LGA which is for a policy that provides for an objective
and transparent process for the appointment of board members for council
organisations. The Policy also includes an objective of continuity and smooth
transition between board members.
22. The objective of ensuring smooth transition is not always possible
or appropriate for a board. Board appointments are a means of supporting the
performance and governance of an organisation and can serve as an
accountability mechanism.
23. Options considered for amending the Policy purpose and objectives
are noted in Table 1:
Table 1: Options considered for the
purpose of the Policy
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Option
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Recommendation
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A. retain the status quo
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The
proposed amendments are recommended as improvements on the status quo.
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B. include that board
appointments should support organisations to achieve the council direction
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This
is recommended to clarify the link between board appointments and the
achievement of council’s direction to CCOs.
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C. replace the objective
of continuity through smooth succession with an objective of promoting good
governance through board appointments
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This
is recommended as an emphasis on promoting good governance should be a
primary consideration when making board appointments.
The
meaning of good governance will vary depending on context and at times good
governance may not be best served by continuity of board members.
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See also 2. Policy Objectives in Attachment A.
Selection panel composition
24. The selection panel
has a significant responsibility in the appointment process and providing
advice on appointments to the committee. As such the selection panel should
contain a range of perspectives to give the committee confidence in their
recommendations.
25. The current Policy
sets the composition of selection panels for Substantive CCOs as follows:
· up
to two members of the Governing Body selected from an enduring pool, one of
whom will chair the panel
· the
chair of the relevant CCO or entity
· a
member of the Houkura Independent Māori Statutory Board (Houkura),
(nominated by Houkura)
· the
Auckland Council’s Chief Executive (or their delegate)
· the
Mayoral Chief of Staff (or their delegate).
26. The Policy does not
give any specific guidance on the composition of panels to select a new board
chair. In most cases, the inclusion of an outgoing chair is not appropriate for
a selection panel.
27. In the status quo,
the Mayor may be appointed to a selection panel as a member of the enduring
pool as well as the Mayoral Chief of Staff being present on each panel. This
can create a perceived duplication in the perspective of the Mayor.
Table 2: Options for amendment of
selection panel composition
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Option
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Recommendation
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A. retain the status quo
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Other
options are preferred as they give a more appropriate range of perspectives
on selection panels and flexibility.
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B. add the Mayor (or their
delegate) as an ex-officio member of the panel in place of the Chief of
Staff.
and
add that as an ex-officio member of all panels, the Mayor
would no longer be a member of the enduring pool
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This
is recommended as it removes a possible perceived duplication of
perspectives on selection panels. It will also mean that up to three members
of the selection panel will be members of the Governing Body, along with one
member of the Houkura Independent Māori Statutory Board.
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C. specify that the
selection panel for chairs will not generally include the outgoing chair of
the board unless invited to participate
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This
is recommended as it gives clarity and flexibility to the panel
membership for board chair appointments.
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See also 8.4. Membership of the Selection Panel
in Attachment A.
28. In
the 2022-2025 term, not all members of the Governing Body that were interested
in the enduring pool were able to participate as the policy sets a maximum
membership of ten. The limited membership helps to build panel experience for
those members.
Table 3: Options for amendment to
the enduring pool
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Option
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Recommendation
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A. retain the status quo
with a maximum of ten members of the enduring pool
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The
status quo is generally suitable but is not recommended as option B allows
more participants.
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B. expand the enduring
pool to up to twelve members
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This
option is recommended as it allows more Governing Body members to
participate but without significantly reducing the ability of members to
build experience.
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C. remove the maximum
number of enduring pool members
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This
option is not recommended as it would remove the benefits of having a pool of
experienced panel members.
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D. replace the enduring
pool with membership of the Committee
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This
option is not recommended as the committee size is not constant and is an
unreliable mechanism as future iterations could be too small to form an
effective pool.
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See also 8.5 Membership of the Enduring Pool in Attachment A.
Eligibility
criteria for candidates
29. The review considered the Policy’s provisions on the length of
tenure for directors, conflict of interest controls and the provisions relating
to directors that stand for elected office.
Tenure
30. All board members serve at the pleasure of council. Board members
are usually appointed for terms of three years and at the end of their term may
be reappointed. Reappointments can be made where the director’s
performance warrants and where their skills remain relevant to the board as
well as broader considerations relating to the composition of the board and
succession planning.
31. The Policy discourages reappointment for a third term and requires
additional ‘good reason’ for this to be recommended. This promotes
more regular rotation of board members with, on average, one sixth of board
members being replaced each year in this scheme. The rotation of board members
who remain relevant and valuable contributors after six years can mean that
talent is lost from boards earlier than necessary.
32. The constitutions of CCOs generally contain provisions limiting the
maximum tenure of board members to nine years (three terms of three years).
Table 4: Options considered for the
tenure of board appointments
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Option
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Recommendation
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A. retain the status quo
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Not
recommended.
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B. remove the additional
considerations for appointments to a third term while retaining the maximum
of nine years total
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This
is recommended as it gives more flexibility in the council’s
decision making and the retention of valued board members for longer.
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See also 7. Term of Appointment and 8.11
Chair Succession Planning in Attachment A.
Conflict of interest
33. The review scope
included consideration of conflict of interest provisions following a 2022 PWC report which recommended
that council consider whether the Eke Panuku board should
have a proportion of board members without active property interests, including
the chair.
34. The Policy notes
that candidates will be asked to declare any real or perceived conflicts of
interest deals and notes that selection panels should discuss in their
recommendation any identified conflicts of interests that candidates may have
and whether they consider the conflicts to be manageable.
35. No alternatives are
proposed as part of this review as conflicts of interest are often highly
contextual and are best dealt with on a case-by-case basis. As such the broad
position included in the Policy is considered to be suitable.
Directors
standing for elected office
36. The Policy notes
that in situations where a board member stands for elected office they are
required to stand down from the board from nomination day to the announcement
of election results. This is to avoid any appearance of conflict of interest or
distraction for the board.
37. For local
elections, nomination day is approximately three months ahead of the election
whereas for general elections, nomination day is one month ahead of the
election, at which time election activities are usually in progress.
Table 5: Options considered for directors standing for
political office
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Option
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Recommendation
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A. retain the status quo
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Not
recommended as this would retain the different treatment for general and
local elections.
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B. require that board members
stand down from the earlier of:
· nomination day
or
· the commencement of the regulated
period for that election and the public announcement of the board
member’s candidacy. (The regulated period is the lead up to a general
election where there are restrictions on election advertising and publicity).
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Recommended as the regulated period for general
elections under the Electoral Act 1993 is approximately three months before
election day, so is more in line with nomination day for local elections.
This gives better protection to boards against any distraction or perceived
conflicts of interest.
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See also 8.13 Board Members Standing
for Political Office and, 13.8 Board Members Standing for Political Office
(non-substantive CCOs) in Attachment A.
The process used for board
appointments
38. The scope of review
included considering the process for making board appointments. This includes:
· the
process to approve the short-list of candidates prior to interview
· clarity
on who chairs the selection panel and matters that the selection panel have
discretion over
· use
of external recruitment advisors
· the
core competencies sought for all directors.
Approval of the short-list
39. Generally, the
committee must approve a short-list of candidates prior to those candidates
being interviewed by the selection panel. This provides an opportunity for the
committee to have oversight at the mid-point of an appointment process.
40. The Policy also
provides that where an appointment must be made promptly, the committee may
delegate approval of a short-list to an approval group of the committee chair
and deputy chair and to the chair of Houkura. This can shorten an appointment
process by up to a month depending on the timing of the committee meeting.
Table 6: Options considered for approval of the
short-list
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Option
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Recommendation
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A. retain the status quo
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Not
recommended. The proposed amendments would reduce the time required to
complete a board appointment.
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B. short-lists are approved by an approval group,
noting that the committee may retain the approval power at their discretion.
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Recommended. In comparison to the status quo this
reduces time taken from establishment of a vacancy to the approval of an
appointment. This improves timeliness by reducing the number of times an
appointment requires a committee decision. This reduces the opportunity for
the committee to input into a process. The committee will receive memoranda
when a short-list is approved to keep the committee informed as appointments
progress.
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C. allow the approval group to nominate alternate
approvers where the committee chair, deputy chair or chair of Houkura are
also members of a selection panel
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Recommended because where one or more of the
approvers of the short-list are also a member of the selection panel it can
reduce the ability of the delegated group to provide an oversight function.
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See also 8.7.3
Screening and short-listing and 8.7.4 The committee may delegate the power to
approve the short-list in Attachment A.
Selection panel chair
41. The Policy notes
that selection panels will be chaired by a Governing Body member but does not
give clarity on how they are selected when there is more than one Governing
Body member on a panel. In practice the chair has been either selected by the
committee or by agreement of the Governing Body members on a selection panel.
42. It is recommended
that the committee has the power to appoint the selection panel chair but note
that this can also be by agreement of the Governing Body members on a panel.
This is to give flexibility and does not mean that a further committee decision
is needed if the nominated chair is unable to complete the role for any reason.
Proposed amendments are noted at 8.3 in Attachment A.
Use of external recruitment
advisors
43. The scope of the
review included discussion of how council makes use of external advisors to
support appointment processes. Up to October 2022, Auckland Council engaged
external consultants to support board appointment processes for substantive
CCOs. Since that time, the operational practice has been to use internal
resources for these functions.
44. The Policy
references the use of external advisors to support appointment processes in
several parts. The decision to use external advisors is not a requirement of
any part of the policy. For clarity, it is recommended that the Policy remove
references to external advisors noting that this would not prevent the use of
external advisors in future.
45. Proposed policy
amendments are noted at 8.7.2 and 8.73 in Attachment A.
Core competencies
46. The core
competencies are a set of skills and attributes sought for all directors and is
included in the briefs and advertisements for all appointments and assessed by
selection panels at interview. This is a list that has been added to over time.
Some similar clauses can be simplified or amalgamated. An additional competency
regarding the commitment of directors to better outcomes for Aucklanders is
also recommended.
47. Proposed policy
amendments are noted at 6.1 in Attachment A.
Other matters relating to the
appointment process
48. Through the
workshops other issues were raised which are recommended for inclusion in the
Policy as follows:
· a
minimum public advertising period for board positions of 15 working days (see
8.7.2 in Attachment A)
· clarify
that the panel may seek further candidate search if they feel unable to make a
recommendation (see 8.7.3 in Attachment A)
· clarify
the list of stakeholders who will be notified of board vacancies (see 8.7.2 in
Attachment A)
· clarify
that the selection panel may exercise its best judgment in making its
recommendations (see 8.7.5 in Attachment A)
· include
that directors will receive an induction from Council that explains the
direction set for the board by Council and the accountability requirements for
the board. (see 8.7.6 in Attachment A)
The process for reviewing
board remuneration
49. The process for
reviewing remuneration of directors involves a review taking place once per
triennium following a local body election. A review of CCO director
remuneration was completed in August 2024 [PACCC/2024/63].
50. No changes are
proposed for this part of the Policy.
Matters arising from the decision in Houkura v Auckland Council
51. The judgment in Houkura v Auckland Council found that before
appointing the Watercare Board chair in June 2024, Auckland Council had not met
the requirement in Section 57(3) of the Local Government Act 2002 which states that:
When identifying the skills, knowledge,
and experience required of directors of a council-controlled organisation, the
local authority must consider whether knowledge of tikanga Māori may be
relevant to the governance of that council-controlled organisation.
52. The judgment found that the council could not rely upon the
following parts of the Policy as fulfilling this statutory requirement:
· 6.1 – which
states one of the core competencies expected on substantive CCO boards is as
follows: “uphold the principles of the Treaty of Waitangi, readiness
to promote improved outcomes for Māori and knowledge of Te Ao Māori
and established Māori networks”
· 8.7.5 – which
states that the Selection Panel will interview and assess candidates against
the required skills, knowledge and experience and may take into account other
factors such as “candidates with knowledge of Te Ao Māori and
established Māori networks”.
53. Consideration of whether knowledge of tikanga Māori may be
relevant to the governance of a CCO is a mandatory consideration in every board
appointment process. To meet the requirements of s57(3) council must be able to
demonstrate that the relevance of knowledge of tikanga Māori has been
considered (through the criteria in the Policy, or when setting specific
appointment criteria for particular roles), and also when a director is
actually appointed.
54. In the current Policy, section 57(3) is addressed in 8.7.1
– Identification of skills, knowledge and experience. The High Court in
its decision was clear that the references in the Policy to te ao Māori
cannot be treated as a reference to tikanga.
55. Where knowledge of tikanga Māori is relevant to the governance
of a CCO, this knowledge should be held to an appropriate level by the board.
Knowledge of tikanga Māori should be sought as a specific skill set where
the board is lacking this knowledge.
56. Options for strengthening the Policy to meet the statutory
requirement to consider the relevance of tikanga Māori are noted in Table
7 below:
Table 7: Options for amending the Policy
in response to Houkura v Auckland Council
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Option
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Recommendation
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A: Status quo
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Not
recommended. The Policy makes reference to the requirement to consider
whether knowledge of tikanga Māori is relevant as a specific skill in
8.7.1. Given the Court’s criticism of the Policy, this option is not
recommended, and Option B would more clearly meet the statutory requirement.
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B:
Amend 8.7.1 for substantive CCOs and 13.3 for non-substantive CCOs to
explain:
· that knowledge of tikanga
is particularly relevant to the governance of a CCO that makes significant
decisions regarding natural and physical resources or that is expected to
have significant engagement with Māori
· note that knowledge of
tikanga Māori should be sought for board members where this is an
identified knowledge gap on a board.
|
Recommended. This amendment will give clarity about when knowledge of
tikanga Māori should be sought for a board appointment and confirm that
the council should seek this skill set where it is identified as a priority
skill. Because the committee is required under this approach to
identify specific skills and experience required for a vacancy and, as part
of that, to consider whether knowledge of tikanga may be relevant to the
governance of a CCO, this approach should ensure that the requirements of
s57(3) are met.
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C: Amendment of the core-competencies to include specific
reference to tikanga Māori
|
Not
recommended. This option would ensure that the requirements of s57(3) are met
for all board appointments by ensuring that knowledge of tikanga Māori
is always a criterion for appointment. This is not recommended as the more
targeted approach sought in Option B better reflects what is appropriate to a
particular CCO and vacancy, and the requirements of the legislation (which is
to consider whether knowledge of tikanga may be relevant to the governance of
a CCO, rather than to decide that it will always be relevant).
|
|
D: Remove “knowledge of te ao Māori” in the
core competencies
|
Not
recommended. The reference to te ao Māori in the core competencies is
part of a competency intended to ensure that all directors are aware of
council’s obligations and commitments to Māori. Amending this
competency would not have any direct impact on Council fulfilling its
obligations under s57(3) of the LGA.
|
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E: Remove the reference to te ao Māori and established
Māori networks in 8.7.5 Interviewing and assessment of candidates.
|
Recommended. 8.7.5 notes that te ao Māori may be considered as an
additional factor by a selection panel. This duplicates the current core
competency which will be considered by all selection panels. Removal of this
bullet point is recommended to remove duplication within the Policy.
|
See also 8.7.1,
8.75 and 13.3 in Attachment A.
Board reviews
57. Currently
board performance reviews are required by the Statement
of Expectations of substantive council-controlled organisations (p22, para
67). Port of Auckland is an exception to this, and their requirement for board
performance reviews is noted in the Policy.
58. The Statement of Expectations is not the responsibility of this
committee, however board performance reviews are a means for the council to
assess the performance of a board and to provide context and information to
support decisions regarding:
· the reappointment of
incumbent members
· any skills gaps that
should be prioritised in future board appointments
· succession planning
for boards.
59. Board performance reviews also provide information for the board
chair to support their leadership of the board.
60. The requirement for board performance reviews can be added to the
Policy by this committee. If so, the committee should also make a
recommendation to the Council-controlled Organisations Direction and Oversight
(CCODOC) committee to remove this section from the Statement of Expectations.
This is recommended on the basis that this committee is a primary customer of
board reviews.
61. Options considered for board performance reviews are noted in Table
8 below.
Table 8: Options for policy directions
on board performance reviews
|
Option
|
Recommendation
|
|
A. Status quo, no
amendments to the provisions currently listed in the Statement of
Expectations
|
This
option is not recommended as there are opportunities to increase the value of
board performance reviews noted in other options.
|
|
B. Increase the frequency
of review from biennial to annual
|
This
option is not recommended as information about a board is unlikely to change
meaningfully on an annual basis. Where large change has occurred on a board
within a year, there will likely be insufficient information for a reviewer
to give advice about the performance of the board within that timeframe.
|
|
C. Make amendments to
improve the level of information in board performance reviews by:
· Specifying input from
council representatives into the reviews including the selection of reviewer
and scoping
· Including that the review
should assess the performance of the board in leading the CCO to meet the
objectives set by the council
· Including that reviews
should include an assessment of the areas of contribution made by individual
board members
· Including that the CCO
chair and reviewer should present their report to the committee for
discussion in confidence
|
This
option is recommended as it improves the council’s oversight and
ability to promote the good governance of boards.
|
See also
“(new section) Board performance reviews” in Attachment
A.
Appointment and
remuneration of CCO chief executives
62. The current Policy is that the appointment and remuneration of a CCO
chief executive by the CCO board requires prior discussion with the selection
panel.
63. Two issues are identified with this part of the Policy:
· it
is not clear from the Policy what selection panel is to be consulted
· the
scope of the Policy is the appointment of board members, not the employment of
CCO staff.
64. The employment of the CCO chief executives is also included in the Statement of Expectations (paragraphs 6 and
69), where it is noted that chief executive appointments are the role of the
board and that their remuneration should not exceed that of the Auckland
Council CEO.
65. Options considered for this part of the Policy are noted in Table 9
below:
Table 9:
Options for provisions regarding chief executive appointments
|
Option
|
Recommendation
|
|
A. Replace the reference
to the selection panel with the Mayor, lead councillor for the CCO and chair
of the committee responsible for CCO oversight
|
This
option is not recommended as this matter is better dealt with outside of the
Policy.
|
|
B. Remove this section
from the Policy, and recommend to the CCO Direction and Oversight Committee
that the Statement of Expectations be modified to require that the Mayor,
lead councillor for the CCO and chairs of the relevant oversight committees
are consulted on the chief executive appointment and remuneration.
|
Recommended as this section is not within the scope of this policy and is
better addressed through the Statement of Expectations to improve the clarity
of direction to CCOs on chief executive remuneration.
|
See also 5.4 in
Attachment A.
Tauākī whakaaweawe
āhuarangi
Climate impact statement
66. Each CCO is accountable for ensuring their planning and
decisions reflect the action areas outlined in
Te-Tāruke-ā-Tāwhiri. The core competencies for board members
include that candidates seeking appointment need to demonstrate a commitment to integrate the council’s climate action plans
into the strategies and operations of the CCO.
Ngā whakaaweawe me
ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
67. The views of CCOs
have not been sought in this review of the Policy. While CCOs are impacted by
the Policy, it is the responsibility of the council to set the policy direction
for appointments.
Ngā whakaaweawe
ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
68. Local boards are delegated powers to make appointments to
CCOs and Council Organisations that operate within a local board area while
entities with a regional or sub-regional impact are retained by the Governing
Body.
Tauākī whakaaweawe
Māori
Māori impact statement
69. The recommendations
of this review include modifications to the Policy in response to the
requirement that the council considers the relevance of knowledge of tikanga
Māori to the governance of CCOs. The proposed amendments are intended to
improve the clarity and provide a consistent basis for making assessments of
the relevance of tikanga Māori and explaining when this knowledge will be
a criterion for board appointments.
70. The review also
recommends that the chair of Houkura Independent Māori Statutory Board be
a member of the approval group for short-lists. This will ensure a Māori
perspective is included in all stages of the appointment process.
Ngā ritenga
ā-pūtea
Financial implications
71. There are no
financial implications arising from this review of the Policy.
Ngā raru tūpono me
ngā whakamaurutanga
Risks and mitigations
72. The Policy mitigates risks associated with appointments by
setting out a transparent and thorough process for selecting board members.
73. The review seeks to improve the Policy by ensuring that it
supports an effective appointments process and addresses identified issues.
Ngā koringa ā-muri
Next steps
74. The approved amendments
will be applied to the Policy and the updated policy will be published on the
council website.
Ngā tāpirihanga
Attachments
|
No.
|
Title
|
Page
|
|
a⇩
|
Proposed amendments to the Appointments and
Remuneration Policy for Board Members of Council Organisations
|
21
|
Ngā kaihaina
Signatories
|
Author
|
James Stephens - Senior Advisor
|
|
Authorisers
|
Alastair Cameron - Manager CCO/External Partnerships
team
Anna Bray - General Manager Group Strategy,
Transformation and Partnerships
Max Hardy - Director Group Strategy and Chief
Executive Office
Phil Wilson - Chief Executive
|
|
Performance and Appointments Committee
25 February 2025
|
|
Criteria for
making an appointment to the board of Haumaru Housing
File No.: CP2024/15352
Te take mō te
pūrongo
Purpose of the report
1. To
approve criteria for one new director for the board of Haumaru Auckland Limited
(Haumaru Housing).
Whakarāpopototanga matua
Executive summary
2. Haumaru
Housing is a joint venture between Auckland Council and the Selwyn Foundation
that provides affordable housing for older people. Council appoints two
directors out of the five-member board. There is one current vacancy for an
Auckland Council director.
3. To
initiate an appointment process, this committee must approve criteria for
assessing director candidates and nominate members to serve on the selection
panel.
4. The
criteria proposed for assessing director candidates are:
· experience
in governing delivery of residential development at scale
· investor
mind-set
· proven
ability to partner with government and other relevant stakeholders
· social
or community housing expertise.
Ngā tūtohunga
Recommendation/s
That the Performance and
Appointments Committee:
a) whakaae
/ approve the following criteria for the appointment of one director to the
board of Haumaru Auckland Limited:
i) experience
in governing delivery of residential development at scale
ii) investor
mind-set
iii) proven
ability to partner with government and other relevant stakeholders
iv) social
or community housing expertise
b) tautapa
/ nominate up to two members of the enduring pool to serve on the selection
panel
c) tuhi
ā-taipitopito/ note that the Houkura Independent Māori Statutory
Board are invited to nominate a member to serve on the selection panel.
Horopaki
Context
5. Haumaru
Housing is a limited liability partnership
between Auckland Council (49%) and the Selwyn Foundation (51%) established in
2016 to provide long-term affordable housing for older people in Auckland. As a registered Community Housing Provider, it provides tenancy and asset management services for
Council’s portfolio of 1,475 rental units for senior citizens. The units
are located in 62 villages across South, North and West Auckland.
6. Haumaru Housing was established with the
following objectives:
· to
improve the housing stock and tenancy management over time, ensuring they were
fit for purpose.
· to
access the income related rent subsidy (IRRS) provided by central government.
This subsidy is not available to local authorities.
· to
utilise the expertise which Selwyn could bring to supporting older people.
· to
grow the number of units of social housing for older people.
7. Haumaru
Housing is a registered Community
Housing Provider and provide tenancy and
asset management services for Council’s portfolio of 1,475 rental units
for senior citizens. The units are located in 62 villages across South, North
and West Auckland.
8. Central
government have recently made changes to the IRRS criteria. The IRRS funding
Haumaru receive is now capped at the current level (950 or 64 per cent of
tenants) from 1 July 2024. Haumaru Housing have been assessing the impact of
these changes, how to address them and strategic planning for the future growth
of the portfolio. An update to the CCO Direction and Oversight Committee is
expected in the next few months.
Board composition
9. Council
appoints up to two board members and the Selwyn Foundation appoints up to three
members. The board chair is selected from within the board membership.
10. Current board
membership is noted in Table 1 below:
Table 1: Haumaru Housing
Board composition
|
Name
|
Role
|
Appointer
|
|
Adrienne Young-Cooper
|
Chair
|
The Selwyn Foundation
|
|
Stephen Titter
|
Director
|
The Selwyn Foundation
|
|
Dr Sue Watson
|
Director
|
The Selwyn Foundation
|
|
Jason Rogers
|
Director
|
Auckland Council
|
|
Vacancy
|
Director
|
Auckland Council
|
11. Remuneration for
directors of Haumaru Housing is set at $35,000 per annum.
Tātaritanga me ngā
tohutohu
Analysis and advice
12. Auckland Council
has a vacancy caused by the end of Kerry Hitchcock’s tenure in October
2024.
13. Staff have
consulted with the Haumaru Housing chair regarding the need for a new director.
The chair has confirmed that a full board of five members is desirable as this
will ensure that the board has sufficient expertise and continuity if there are
further changes to the board.
Process to make appointments
14. Haumaru Housing is
a council organisation as defined by Section 6 of the Local Government Act 2002 because
Auckland Council is a minority shareholder and appoints a minority of the
board.
15. The Policy notes
that where the scale of a council organisation is significant, as is the case
for Haumaru Housing, it is appropriate for appointments processes to follow the
process set for substantive CCOs.
16. To initiate an
appointment process, the committee must approve criteria for the appointment of
a director and nominate members of the enduring pool to serve on the selection
panel.
17. The core
competencies sought for all directors of substantive CCOs under section 6.1 of
the Policy will also apply to this appointment.
18. The criteria
proposed are noted in Table 2 below and have been developed in consultation
with the Haumaru Housing chair. The criteria are intended to focus on
candidates who are able to provide governance direction on the core objectives
(as noted in paragraph 7).
Table 2: Proposed criteria
for a director
|
Criterion
|
Explanation
|
|
Experience
in the delivery of residential development at scale
|
Haumaru seeks
to expand the number of units it can offer. The director will have oversight
of the delivery of these residential units and will use their commercial
experience of the construction sector to drive value for money throughout the
development cycle.
|
|
Investor
mind-set
|
The director
will bring an investor mind-set to the board with the experience to make the
most of the opportunities presented by the Haumaru Housing portfolio for
development and sustainable ownership. The director will ensure that risks
are appropriately managed.
|
|
Proven
ability to partner with government and other stakeholders within the sector
|
The director
will have a track record of using partnerships to achieve outcomes and will
have strong understanding of central and local government processes.
|
|
Social /
community housing governance expertise
|
The director
will have prior governance and/or executive experience in the social sector,
ideally relating to a Community Housing Provider or similar services.
|
Tauākī whakaaweawe
āhuarangi
Climate impact statement
19. The core
competencies for directors includes that candidates demonstrate commitment to
integrate Te-Tāruke-ā-Tāwhiri: Auckland’s Climate Plan
into the strategies and operations of the organisation.
Ngā whakaaweawe me ngā
tirohanga a te rōpū Kaunihera
Council group impacts and views
20. Appointments to the
Haumaru Housing board do not have significant impacts on other parts of the
council group.
21. The Haumaru Housing
chair has input into the proposed criteria and will be a member of the
selection panel.
Ngā whakaaweawe
ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
22. Appointments to the
Haumaru Housing board is 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
23. Kia ora Tāmaki
Makaurau sets as a mahi objective that: "Mana whenua and Māori are
active partners and participants at all levels of the council group's decision
making".
24. An Independent
Māori Statutory Board member is included as member of the selection panel.
This ensures that a Māori perspective informs the recommendations of the
selection panel during the shortlisting, interviewing and appointment
processes.
25. The Independent
Māori Statutory Board is also represented on this committee. This
ensures a Māori perspective is brought to the decision-making process, and
that the Independent Māori Statutory Board’s views are considered by
the committee.
26. Of the current
board members, Jason Rogers identifies as Māori.
27. Haumaru Housing is
not a CCO and is therefore not subject to the requirement of Section 57(3) of the Local Government Act 2002,
that council consider whether knowledge of tikanga Māori is relevant to
the governance of the organisation. While knowledge of tikanga Māori may
be helpful for the board, it is not identified as a priority for adding to the
board at this time.
Ngā ritenga
ā-pūtea
Financial implications
28. Costs associated
with this director appointment will be met from existing budgets.
Ngā raru tūpono me
ngā whakamaurutanga
Risks and mitigations
29. There are risks
common to all board appointment processes. These include:
· Reputational
risk of appointing candidates without appropriate skills or governance
experience. To mitigate this potential risk, a thorough due diligence will be
completed before the appointment is finalised.
· Governance
risk of creating an unbalanced board where too many new members cause a loss of
institutional knowledge which impacts decision-making. Conversely, retaining
board members for extended periods can diminish the board’s innovation
and fresh thinking.
Ngā koringa ā-muri
Next steps
30. The proposed
timeline for this director search is noted in Table 3 below:
Table 3: Proposed timeline
for appointing a Haumaru Housing director
|
Date
|
Action
|
|
3 – 21 March 2025
|
Advertising and research
|
|
Week of 31 March 2025
|
Selection panel consider
the long-list and recommend candidates for interview
|
|
22 April 2025
|
Performance and Appointments
Committee approve the short-list
|
|
Week of 2 May 2025
|
Selection panel interviews
candidates and makes a recommendation
|
|
27 May 2025
|
Performance and
Appointments Committee approve the appointment of the successful candidate
|
Ngā tāpirihanga
Attachments
There are no attachments for
this report.
Ngā kaihaina
Signatories
|
Author
|
James Stephens - Senior Advisor
|
|
Authorisers
|
Alastair Cameron - Manager CCO/External Partnerships
team
Anna Bray - General Manager Group Strategy,
Transformation and Partnerships
Phil Wilson - Chief Executive
|
