Issue - meetings

To consider a report by the Managing Director seeking approval of Articles of Association and Shareholder Agreement for HDC Ventures Ltd, the Council’s Trading Company.

To approve the Shareholder Agreement for HDC Ventures Limited as set out in Appendix 1.

To approve The Articles of Association for HDC Ventures Limited as set out in Appendix 2.

A report by the Managing Director to which was appended the Shareholder Agreement and Articles of Association relating to HDC Ventures Ltd, (copies of which are appended in the Minute Book), was considered for approval. The Cabinet was reassured that these documents had been verified by the 3C Shared Services Legal team and deemed to be in order. The documents provided for a Corporate framework for a commercial strategy to sit alongside Local Government procedures, as the Trading Company allowed the freedom to trade and provided a variety of opportunities without being constrained by bureaucracy. The Managing Director confirmed that the Trading Company was not covered by the Constitution but that it was a Cabinet function and monitoring arrangements would be in place to protect the District Council from trading partners. Thereby, it would be

RESOLVED

a)  that the Shareholder Agreement for HDC Ventures Limited be approved as set out in Appendix 1 to the report now submitted,

b)  that the Articles of Association for HDC Ventures Limited be approved as set out in Appendix 2 to the report now submitted,

c)  that the Managing Director of the District Council be appointed as the first Company Director, and

d)  that authority be delegated to the Board to appoint additional Directors.

Members are to receive the Council Trading Company - Shareholder Agreement, Articles of Association and Commercialisation Update report.

With the aid of a report by the Managing Director (a copy of which is appended in the Minute Book) the Council Trading Company – Shareholder Agreement, Articles of Association and Commercialisation Update was presented to the Panel.

The Executive Councillor for Commercialisation and Shared Resources was in attendance to inform Members that the commercialisation agenda is progressing and that the business plans for the commercialisation of the Document Centre and the CCTV service will be presented to the Panel in July 2017. The Panel were informed that in order to progress commercialisation the Cabinet have to approve the shareholder agreement and the articles of association.

The Panel were informed that the Executive Councillor, Councillor Mrs S J Conboy, the Managing Director and the Corporate Director (Services) will be non-executive Directors of the company.

In response to a query, the Panel were informed that it is hoped with the right partner the Document Centre revenue will increase ten-fold. There is the potential that the partner could bring new technology into the partnership. It is hoped that the service and the CCTV service will become cost neutral.

A Member asked are the Council planning to recruit new staff or bring in existing staff from partners. In response Members were informed that existing staff will be used although a need for a Commercial Manager has been identified.

Following the question would the commercial partner be offered shares, the Executive Councillor replied yes however it would be on a 50-50 basis but and that would depend on what the partner brings into the partnership.

In response to the question can the Executive Councillor give the Panel assurance that due diligence has been undertaken, Members were informed that due diligence has been done as the documents have been through two solicitors and the 3Cs legal service.

The Executive Councillor stated in response to the question can reassurance be given that there is enough skills amongst the non-executive Directors, that there is enough skills and where there isn’t the Managing Director will be given the authority to appoint additional Directors depending on the requirement of skills.

The Panel welcomed the appointment of Councillor Mrs S J Conboy as a non-executive Director as a good example of cross-party working.

Despite the assurances given by the Executive Councillor, some Members remain concerned about the commercialisation agenda and in particular working with partners. The Panel stated that the Council has to ensure that it gets a fair share of the income generated from commercialisation.

Concern was raised that the authority to appoint additional Directors would be vested in one individual. As such the Panel agreed that two further recommendations will be put to Cabinet, they are:

a)  the Cabinet appoints the Managing Director as the first company Director, and

b)  the Cabinet delegates authority to the Board to appoint additional Directors.

(At 7.24pm, during the discussion of this item, Councillor S Cawley left the meeting and did not return.)