PAPER C

 

Purpose : for Decision

 

REPORT TO THE STANDARDS COMMITTEE

 

Date :              22 MAY 2006

 

Title :               APPOINTMENT TO OUTSIDE BODIES BY ISLE OF WIGHT COUNCIL

 

REPORT OF THE MONITORING OFFICER

 

 

PURPOSE

 

1.             To inform the Committee of the outcome of the review of Outside Bodies undertaken by the Isle of Wight Council.

 

BACKGROUND

 

2.             At its meeting in June 2003 when the Committee were considering the indemnity and insurance arrangements for Members the Committee identified that the Council were appointing a number of Members to Outside Bodies to represent the Council or to act as Trustees. However in doing so whilst some advice and clarity over the Members role was given there was little advice given on the status of the outside body nor where Members could obtain that advice (for example there was no information on the current financial position of the outside body).

 

3.             At about the same time the then Resources Select Committee of the Council was reviewing the appointments to outside bodies to see if the number appointed could be rationalised and to ensure that where appointments were made these provided added value to the Council’s objectives/aims.

 

4.             Consequently both these streams of work were amalgamated and for May 2005 new arrangements were introduced.

 

5.             These arrangements are:

 

a.             Revised guide to Members as to their role on Outside Bodies (Appendix A)

b.             A new policy on what bodies the Council will appoint to; what information is required from those bodies; and the named officer contact who would give detailed advice on a specific body (Appendix B)

 

6.             The significant outcomes of this piece of work are:

 

a.                  A reduction of about a third of the number of outside bodies which we appoint to.

 

b.                  For all outside bodies to which we appoint the following information is obtained prior to appointment:

 

                                                  i.                  Up to date audited accounts

                                                ii.                  Availability of advice (through a named officer of the Council)

                                              iii.                  External regulations (for example Charity Commission registration)

                                               iv.                  Job description for the member

                                                 v.                  Copies of constitution articles of association or equivalent.

 

c.                  That appointments to outside bodies are made on the following criteria:

 

                                               i.                     Where existence of the body is of benefit to the Council in the delivery of strategic objectives, and

                                             ii.                     The sustainability or good management of the body is significantly enhanced by the Council nominating an elected member, or

                                           iii.                     Where membership is a statutory requirement, or

                                            iv.                     Council funding is involved.

 

7.             All the above have been developed to address the weaknesses previously identified.

 

RECOMMENDATIONS

 

8.             That this report be noted.

 

 

John Metcalf

Acting Assistant Chief Executive and Monitoring Officer

 

 

 

Contact Point : Chris Mathews,      

Telephone: 823280

Email: [email protected]

APPENDIX A

 

 

OUTSIDE BODIES

 

Most Members will be appointed to one or more outside bodies.  This is a potentially highly rewarding and extremely important area of Members’ work, but also carries some significant risks.  Clear guidance is necessary to safeguard Members, third party organisations and the Council.

 

There are a number of types of outside bodies, some share similar characteristics.

 

Body

Role

Responsibility

Limited Company

(Examples: Isle of Wight Economic Partnership; Housing Associations)

Director (or other company office holder)

·                To the outside body not the Council.

 

·                Any conflict of interest resolved by limiting/stepping back from Council role.

 

·                To be a conduit for information between the Council and the outside body.

 

·                Not to represent the interests of the Council on, or deliver policy through, the outside body.

Unincorporated Body

 

 

Management/Executive Committee Member

Trust

(Example: Northwood House Trust)

Trustee

Statutory Body

(Examples: Hampshire and Isle of Wight Police Authority; School Governing Bodies)

Member/Committee Member

Representative Bodies

(Example: Local Government Association; South East England Regional Assembly)

Member/Committee Member

These are the exceptional cases where the Local Authority Member can represent the Isle of Wight and pursue Isle of Wight Council policy on the outside body.

 

 

Managing the Risk - Members

 

Risk

What the Member can do

·                Personally/financially to the outside body for negligence or other failure in discharging the duty to manage the body.

 

·                Criminally for failure to properly manage the outside body, including, for example, corporate manslaughter or trading whilst insolvent.

 

·                To the shareholders/trust beneficiaries for any failure to manage the organisation properly.

·                Obtain copies of the outside body’s constitution (for example the company Articles/Memorandum of Association, a trust deed or other written constitution).

 

·                Ask for evidence that the organisation indemnifies and insures against the risks involved in managing it.

 

·                Make sure you have advice and guidance about any potential conflict of interest and whenever you are in unfamiliar territory when taking responsibility for any organisation.

 

For representative bodies, Members should ensure that the way in which they deliver the representative role is consistent with Isle of Wight Council policy and within delegations to them as Elected Members.

Managing the Risk - the Council

 

Before any Member is nominated to an outside body the Council will ask for:

 

·               copies of a job description setting out what role the Elected Member is being asked to take on.

 

·               Up to date audited accounts.

 

·               Names and contact details for sources of advice within/about the organisation.

 

·               Any available evidence of external regulation (for example Charity Commission registration).

 

·               Indemnity and liability insurance.

 

Identification of Outside Bodies

 

Members’ time is valuable and scarce.  Appointments to outside bodies will only be made to those organisations which satisfy the following criteria:

 

(i)         Where existence of the body is of benefit to the Council in the delivery of strategic objectives, and

(ii)        The sustainability or good management of the body is significantly enhanced by the Council nominating an elected member, or

(iii)       Where membership is a statutory requirement, or

(iv)       Council funding is involved.

 

 

John Lawson

Head of Legal and Democratic Services

May 2005

 

 

APPENDIX B

 

 

Agreed Policy for Appointments to Outside Bodies

 

(a)          An information sheet be compiled on what the Council expects of an outside body wishing to have a Council representative/nominee and other ways in which the council can assist outside bodies to attract volunteers.

 

(b)          Accessible guidance and training is provided to elected members on roles and responsibilities when serving on an outside body and in particular a training session to be held as part of the induction process after the Council elections.

 

(c)          To establish other ways of enabling outside bodies to identify selected members and/or council employees to management/trustee/director posts (effectively a clearing house).

 

(d)          A simple due diligence exercise be undertaken before any appointment is made to include requiring evidence of :

 

(i)            Insurance backed indemnity

(ii)          Up to date audited accounts

(iii)        Availability of advice

(iv)         External regulation (for example Charity Commission registration)

(v)           Job description for member as advisor, representative, appointment, trustee, company office holder

(vi)         Provide copies of constitution articles of association or equivalent

 

(e)          That appointments should only be made to bodies whose purposes further the council’s strategic objectives.

 

(f)            Each body with an Isle of Wight Council nominated member should also have a nominated officer contact, to liaise with and that officer will also support and advise the member.

 

(g)          That appointments to outside bodies only be made following application of the following criteria :

 

(i)            Where existence of the body is of benefit to the Council in the delivery of strategic objectives, and

(ii)          The sustainability or good management of the body is significantly enhanced by the Council nominating an elected member, or

(iii)        Where membership is a statutory requirement, or

(iv)         Council funding is involved.

 

(h)          That current arrangements whereby appointments are made following a general invitation to members, and if more than one member expresses an interest, a recommendation will be sought from the relevant Select Committee.