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Appointment and Remuneration of Directors of Council Organisations

Reference: P03-006
Status: Approved by the Council on 1 July 2003

Identification of Skills, Knowledge and Experience Required of Directors

In each of the cases that a director is to be appointed the Council will develop a director specification for the role. It will detail the skills, the knowledge and experience required for that directorship role. The role specification will take into account:

a) The nature and scope of the organisation, the organisations future directions and its constitutional set up.

b) The strategic objectives of the organisation and the attributes, skills and knowledge, which will be required to deliver the strategic objectives of the organisation.

c) The skills of the current directors of the company or the required skills of all the directors of the company.

d) Any specific skill, knowledge and experience that is currently required or may be required in the future.

e) The implications and involvement of the organisation with tangata whenua and their cultural values.

The role specification will detail:

• The organisation’s context.
• The functional relationships of the role.
• The responsibilities and liabilities attached to the role.
• The key result areas for the role.
• The personal attributes for the role.
• The specific skills/qualifications required for the role.

The General Appointment Process for Directors

This is a general process that may be modified in light of any constitutional requirements that override any step provided or where another body has responsibility for managing the process involved.

The key objective for the Council in any appointment process is to obtain and select the best person for each role and to follow best practice in reaching each decision.

The Council will first complete a director’s role specification.

A list of potential directors will be achieved by:

a) Publicly advertising the position/positions that are available; and/or

b) Directly approaching people it is felt may be appropriate for the role; and/or

c) Asking relevant groups within the community for nominations for the role of directors.

Any candidates will be asked to supply:

• A curriculum vitae which establishes how well they meet the role specification for the directorship role.
• A letter detailing why they are interested in the particular role.
• A report on any conflicts of interest their appointment may cause.

A selection panel will be established that will consider all applications, short list applicants for interview and make a recommendation to the Council. The panel will include:

a) The Mayor;

b) The Chief Executive Officer of the Council;

c) Other councillors, staff or outside consultants with specific skills that add value to the process.

The selection panel will make a recommendation to the Council that will generally be adopted by a full resolution of the Council. The decision will generally be made with the public excluded to protect the privacy of any individuals, but a public statement will be made as soon as practicable on the appointment made.

The term of the Directors position will generally be determined by the constitution (or other founding document) of the council organisation to which the director is appointed. Where this is not the case the Council will determine the term in the resolution appointing the director.

At or near the end of each term the candidate selection panel may carry out a formal review of the director’s performance. If required, this will be used to assist the decision-making process for reappointment.

The Council’s current view of best practice on tenure is that an existing/retiring director may be re-appointed for one further term and, in exceptional circumstances, a further and final term.

For current boards of directors, the Council will transition toward that best practice outcome over time to ensure existing continuity is not severely disrupted. The Council considers it best practice for boards to have in place policies and processes to ensure that the succession and refreshment of overall board numbers occurs over time.

The Council also considers that other than in emergency situations, directors should be non-executive and not undertake executive roles within the entity involved.

The Appointment of Staff or Councillors as Directors

It is not considered appropriate for either staff or Councillors to act as directors of Council-controlled organisations. This could create conflicts of interest between the roles of staff as advisors to Councillors and Councillors as objective decision makers while having the responsibilities of the role of a director.

The Remuneration of Directors

The remuneration of Directors will be determined based on each specific role and any existing legal or constitutional requirements.

Council Organisation directors appointed by the Council will receive the remuneration (if any) offered by that body.  If no remuneration is offered, such directors who are Councillors will be entitled to receive normal Council meeting allowances.  Council staff members appointed to such bodies will not accept any remuneration.

Where the Council is required to set the remuneration the director’s role specification will be used to establish market rates for comparable positions at the time of appointment. The market rates will determine the remuneration for the role. Where the Council is unable to set the remuneration or has limited power to do so, it will still indicate its view on the matter and record its position as a matter of record.

The market rates will then be reviewed on an annual basis. The expectation will be that directors who are performing adequately will receive any increase on an annual basis.

Delegations of the Equity Subcommittee

Pursuant to clause 32, Schedule 7 of the Local Government Act 2002 for the purpose of efficiency and effectiveness in the conduct of its business the Council delegates to the Equity Subcommittee the powers and functions necessary in that behalf provided that:

a) Such power only be exercised by the Subcommittee if a decision or action is required urgently;

b) As soon as practicable, all Councillors are provided with the full detail of the decision and the reason for the urgent action.

Reviewed three yearly (next review 2012).

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