A council-controlled organisation (CCOs) is an organisation in which the council controls 50 per cent or more of the votes or has the right to appoint 50 per cent (or more) of directors or trustees.
A substantive CCO is a CCO that is either responsible for the delivery of a significant service or activity on behalf of Auckland Council, or owns or manages assets with a value of more than $10 million.
Auckland Council has seven substantive CCOs:
While each CCO has its own specific objectives, the Local Government Act 2002 identifies the principal objective of all CCOs. In summary, this is to:
- Achieve the objectives of its shareholders, both commercial and non-commercial as specified in the statement of intent
- Be a good employer
- Exhibit a sense of social and environmental responsibility by having regard to the interests of the community in which it operates and by endeavouring to accommodate or encourage these when able to do so; and
- Conduct its affairs in accordance with sound business practice.
The overall direction for CCOs is set in line with the Auckland Plan, the council’s long-term plan, including the CCO Accountability policy, which sets how the council will hold its CCOs accountable for meeting its objectives and priorities for them.
The council also has a number of legacy CCOs.
Governance of Council Controlled Organisations
CCOs are governed by their boards of directors or trustees, and operate at arm’s length to the council.
They are accountable to the council, which determines the objectives for each CCO and monitors their performance. The CCO Governance and Monitoring Department, Auckland Council’s Accountability and Performance Committee and the CCO Strategy Review Subcommittee assist the council in this governance.
The Accountability and Performance Committee is responsible for monitoring the performance of CCOs, and approving policies relevant to CCO accountability. The council’s Council-controlled organisational accountability policy (PDF 170kb) is described in Chapter 2 of the Long Term Plan.
The CCO Strategy Review Subcommittee is responsible for appointing directors and negotiating CCOs’ statements of intent (SOIs) which are the basis for reporting against by the CCOs. These SOIs include performance measures and are agreed by the CCO Strategy Review subcommittee.
The public will be able to provide input to the statements of intent (SOIs) at meetings, which the CCOs must hold in public. The public meeting to discuss the shareholder comment of the draft SOI for the following year must be held before 30 June each year. The second public meeting must be held after 1 July each year, where the board will consider the CCOs performance under its SOI in the previous financial year.
Additional information regarding board meeting guidelines, as noted by the CCO Strategy Review Subcommittee meeting of July 2011, see Board and public meeting guidelines for CCOs. These are also available within the Shareholder Expectation Guide for Council Controlled Organisations V4 (August 2012) (PDF 524kb).
The guidelines will assist the CCOs in conducting meetings in public and enhance the public confidence in these organisations. The guidelines will be reviewed periodically with input from the CCOs.
TheRoles and Responsibilities report (PDF 82kb) explains the relative roles and responsibilities of the CCO boards and the shareholder, Auckland Council including the types of decisions to be made by each party.
The Controller and Auditor-General published a report commenting on the Governance of Watercare Services Limited and its relationship to Auckland Council, together with a report on the future water supply for the Auckland region.