Directors in spotlight

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INVERCARGILL City Council will not have elected members as directors of council-controlled companies any longer.

The motion proposed by Cr Ian Pottinger was approved at a council meeting last week after a heated debate.

In the document, Cr Pottinger asked council to exclude elected members from being directors on council-controlled companies, subsidiaries and joint ventures from the start of the new council’s term in October this year.

He challenged councillors who believed it was necessary to have the majority of councillors as directors on the board to maintain council’s control.

Mayor Sir Tim Shadbolt, Crs Darren Ludlow, Graham Lewis and Lindsay Thomas were currently directors on council-controlled companies.

Cr Lewis and Cr Ludlow abstained from voting on the motion, while Cr Thomas and Sir Tim said they felt comfortable to vote without any conflict of interest as their directors’ roles “were coming to an end”.

Cr Pottinger said councils could exercise control through a statement of intent, approval of major transactions, an audit by the Auditor-General, statutory reporting by the council-controlled companies to the council, letters of expectation, and dividend policies.

“This is a more formal, effective and transparent mechanism to control our companies.”

Sir Tim said it was good to have elected members on boards and committees because it kept council informed.

“It is a different dimension to having just business people running the companies.”

Cr Karen Arnold challenged the document provided by Cr Pottinger.

She said council should have an “independent information” source instead of a document from a “councillor who is openly biased against Holdco”.

Cr Arnold suggested they start a debate with the chief executive and general manager of the company to understand what they thought.

“They have fresh eyes, lots of experience and knowledge.”

She was worried future councillors would not be able to apply for the director positions even if they had expertise in the role.

Cr Lesley Soper agreed and said councillors should be allowed to apply for the position in the same process as any other members of the public.

Cr Thomas said the motion could take the protection from the council on its companies.

He urged councillors to think carefully about the decision as the motion would “wipe out any presence around our Holdco board”.

Cr Toni Biddle disagreed with him and said having a majority of councillors on the board did not mean control.

She believed councillors were elected to “protect the city” and not to be directors or chairs of boards.

“I believe we should not be in this position. Our obligation is with our community and our people.”

The motion was approved but Sir Tim and Crs Thomas, Soper, and Arnold voted against the proposal.

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