Agenda item

Report number iSK004 of the Cabinet Member for Growth and Communications.            (Enclosure)

Members had been circulated with report iSK004 from the Cabinet Member for Growth and Communications which concerned two key documents for consideration by the Committee, the Articles of Association for InvestSK and the Memorandum of Association and its associated Performance Management Framework for InvestSK. 

The Cabinet had considered the proposal to incorporate InvestSK as a Private Company, Limited by Guarantee at its meeting on 12 May 2018.  The decision had been called in by five Members and the Growth Overview and Scrutiny Committee had met on 29 May and considered the call-in. The Committee had decided not to uphold the call-in decision and therefore the decision made at Cabinet on 12 May 2018 stood.

The Cabinet decision was in six parts and the report gave an update on each area.  Two items before the Committee were in relation to the Memorandum of Understanding and its associated Performance Management Framework  and the Articles of Association.

Questions were asked about the content of the appendices which seem to contradict each other.

The Strategic Director Growth clarified that Appendix 2 to the report was a copy of the Model Articles for Private Companies Limited by Guarantee.  Appendix 4 was the proposed Articles for InvestSK based on the Model Articles.   Appendix 5 was a provisional Performance Management Framework and Appendix 6 was a comparison model that tailored the Articles of Association for InvestSK which should have shown the tracked changes (although it was noted that the track changes had failed to print).   The Cabinet Member for Growth and Communications stated that a working group of the Advisory Committee had spent time going through the documents before Members.

A question was asked about the number of directors needed to be quorate.  The Strategic Director, Growth clarified that at the moment there were three directors and to be quorate only two were needed.  Members were concerned about this number but it was stated that this was the same number as the current Gravitas Company had.   Further comments were made about remuneration to the directors of the company especially in respect to spending public money.   The Strategic Director Growth referred to the Tailored Articles at Appendix 4 where clarification on Directors’ remuneration was provided. Reference was made to the composition of the Board and the restrictions imposed by law.

The Cabinet Member indicated that it had not been the intention to have an Advisory Committee for the long term and performance would be reported to the Cabinet.

Further comments were made about the content of the appendices as Members were confused about which appendices they should be discussing.  Concern was also expressed about monitoring the directors, it was felt that the Council had no power.  A further comment was made about the appointment of the Company Chief Executive in respect of the recruitment process and interview.  

A question was asked about the detail in relation to the Advisory Committee.  It was stated that the Cabinet Member for Growth and Communication had delegated authority in respect of the Advisory Committee.  The membership of the Advisory Committee originally was Councillor King, Councillor Goral and Councillor Adam Stokes together with relevant officers, however Councillor King was no longer a member.  A further question was asked about the Advisory Committee’s Terms and Conditions, when meetings had been held and availability of minutes. 

The Chairman draw Members attention to appendices 4, 5 and 5a which they were being asked to agree to be adopted.

One Member felt that not enough information was contained within these documents especially with regard to detail, especially recruitment, contractual information and personnel issues.

Further clarity was then sought about where the Board minutes would go, would they come before the Growth Overview and Scrutiny Committee for scrutiny as this was not clearly stated within the document.

A Member asked for clarity about the Advisory Committee, was this an ad hoc meeting as and when required?   The Strategic Director Growth indicated that once InvestSK had been set up the Advisory Committee would no longer be needed although the original report indicated that it was best practice to have an Advisory Committee which could make decisions on behalf of the Council when asked to do so by the Board.

Reference was made to where performance reporting would go and it was stated that within Appendix 5 (Memorandum of Understanding) it stated that quarterly performance reporting would be reported to the Cabinet and the Governance and Audit Committee. The Cabinet Member for Growth and Communications stated that this could then also be reported to the Growth Overview and Scrutiny Committee to enable open scrutiny.

Further discussion about the situation with the Advisory Committee and whether or not it needed to stay in place followed.  Members felt that this committee should remain in place and should have three Members and act as a proper committee between the Council and the Private Company InvestSK.

The recommendation asked that the Growth Overview and Scrutiny Committee considered the Articles of Association and the Memorandum of Understanding for InvestSK as appended to the report and make comments. The Cabinet Member for Growth and Communications had delegated authority to approve them on behalf of the Cabinet and to lodge the Articles of Association with Companies House.

Members expressed concern about the situation with the Advisory Committee and wanted minutes from that meeting to come back to the Growth Overview and Scrutiny Committee together with minutes from the Board meetings. The Cabinet Member for Growth and Communications described what she felt was the best route for reports to go through to be scrutinised.  Any report which went through Cabinet could be scrutinised by the Growth Overview and Scrutiny Committee.  The Committee agreed that the word ‘provisional’ should be removed from appendix 5a, it was proposed, seconded and agreed that the documents as appended to the report be adopted having regard to the concerns raised by Members around the Advisory Committee and the performance reporting mechanisms.

Recommendation:

That the Articles of Association and the Memorandum of Understanding and its associated Performance Management Framework are agreed to be adopted and that the Cabinet Member for Growth and Communications lodge the Articles of Association at Companies House as delegated for by Cabinet having regard to the comments raised by Members around the Advisory Committee and that the mechanisms referred to in the Memorandum of Understanding are put in place for reporting back to the Growth Overview and Scrutiny Committee in relation to InvestSK.