21.1. This chapter examines organisations that are subsidiaries of, or associated with, existing Auckland councils. There are over 40 council organisations (“COs”) and council-controlled organisations (“CCOs”) covered by statutory monitoring and reporting provisions.1 A list of both the for-profit and not-for-profit CCOs and COs in the Auckland region, and those council entities exempted from being CCOs, is set out in Appendix 21.1 to this chapter. The chapter also discusses other council financial arrangements with private sector organisations which are not covered by any formal monitoring or reporting requirements.
21.2. The chapter commences with a description of CCOs and COs and a summary of submissions made to the Commission regarding CCOs and COs. It then considers the appropriate place of such organisations in the new Auckland Council structure to which they will all be transferred, and the appropriate governance arrangements for them. The analysis includes discussion of their relationship with the Auckland Council, the appointment and role of CCO and CO directors, and proposed performance monitoring and reporting arrangements.
21.3. The Commission considers that the Establishment Board should undertake a full “stock-take” of such organisations and their financial position prior to the establishment of the Auckland Council, so that the council can make a decision on their future at an early date.2
21.4. Part 5 of the Local Government Act 2002 (“LGA 2002”) addresses the governance and public accountability arrangements of such council-owned entities. These include both profit-making and not-for-profit organisations operating as charitable trusts, incorporated societies, bodies corporate, or companies. Setting up these entities enables councils to access specialist expertise through external directors and to separate those activities from the council, which may benefit from additional operating autonomy.
21.5. A council organisation constitutes an entity in which a council holds or controls any proportion of voting rights or rights to appoint directors.3 COs may be companies, joint ventures, partnerships, trusts, unions of interest, and profit-sharing arrangements. The scope of COs is thus very wide. For example, Auckland International Airport Limited is a CO of both Manukau City Council and Auckland City Council, both of which have investments in that company. Another example is the film studio Prime West Limited, in which Waitakere City Council holds a minority interest, with the majority of shares being held by private interests. Watercare Services Limited (“Watercare”) which is a company owned by six Auckland councils, is also a CO, but is governed by additional legislative provisions. Ports of Auckland Limited is a company with one shareholder, Auckland Regional Holdings (“ARH”). It is a CO governed by special legislative provisions.4
21.6. A council-controlled organisation (“CCO”) is an entity in which one or more local authorities control 50% or more of the voting rights, or have the right to appoint 50% or more of the organisation’s directors.5 There are defined procedural steps required to be taken before a CCO can be set up, including a special consultative procedure.
21.7. Examples of CCOs include the Auckland Regional Transport Authority (“ARTA”) and ARH (both of which are subsidiary organisations of Auckland Regional Council), as well as Metrowater and Manukau Water Limited, which are companies wholly owned by Auckland City and Manukau City Councils respectively. Other Manukau City Council CCOs include Manukau Leisure Services Limited (which operates sport and recreational facilities) and Manukau Building Consultants Limited (which undertakes building inspections). CCOs may trade for profit, in which case they are termed a council-controlled trading organisation (“CCTO”).6 Examples of CCTOs are Tomorrow’s Manukau Properties Limited and Westhaven Marina Limited.
21.8. The LGA 2002 deems certain council organisations not to be CCOs, including Watercare and port companies, including Ports of Auckland Limited.7 The Act also allows certain council entities to be exempt from being council-controlled organisations, and thus exempt from the monitoring, reporting, and accountability provisions of the LGA 2002 for up to three-year reviewable intervals.8 “Small” entities that do not trade for profit may be exempted from being CCOs by a council resolution. Other organisations require an exemption by Order in Council on the recommendation of the Minister for Local Government.
21.9. There are also additional legislated governance arrangements to meet specific regional needs for a number of CCOs including ARH and ARTA.9
21.10. There are other significant entities that receive levy-based funding from various Auckland councils including the Auckland Museum and the Museum of Transport and Technology, but these are not council-controlled or council-owned organisations, and are therefore not covered in this discussion.
21.11. With the exception of Watercare and the Ports of Auckland Limited, the objectives of COs are not usually statutorily prescribed. Watercare has a legislative requirement to “manage its business efficiently with a view to maintaining prices for water and wastewater services at the minimum levels consistent with the effective conduct of that business and the maintenance of the long-term integrity of its assets”. It is also required to have a statement of intent and to this extent it operates similarly to a CCO.10 Ports of Auckland Limited is subject to the Port Companies Act 1988, which provides that the principal objective of every port company is “to operate as a successful business”.11
21.12. Council organisations are typically established by constitution (if the CO is a company), or by trust deed (if the CO is a trust). COs’ financial obligations can be underwritten by local authorities. For example, the six council shareholders of Watercare, a CO, have recently guaranteed its borrowings, thus reducing its financial operating costs.
21.13. The principal objectives of a CCO are to
21.14. The reasons councils give when placing activities into separate entities include
21.15. ARH is both a statutory body and a council-controlled organisation.13 Its function is to act as the investment manager of a pool of Auckland Regional Council funds to generate returns that are invested back into the region’s transport and other infrastructure. ARH’s major asset is its 100% ownership of Ports of Auckland Limited, but it also owns harbourfront development property in the central business district and other cash and liquid investments.
21.16. ARTA is a CCO whose primary role is to give effect to the regional land transport strategy and to provide public transport (bus, train, and ferry) services throughout the region.
21.17. CCOs are subject to the Local Government Official Information and Meetings Act 1987 and the Ombudsmen Act 1975.14 Their performance must be monitored by the local authority through a statement of corporate intent, and they are audited annually by the Auditor-General.15 Those CCOs and COs that are incorporated as companies are also subject to Commerce Commission scrutiny under the Fair Trading Act 1986 and the Commerce Act 1986.
21.18. Local authorities cannot guarantee a CCTO’s obligations and there are restrictions on councils lending to CCTOs so that they operate on a “level playing field” with private enterprises, without subsidies from shareholding councils.16
21.19. The non-profit CCOs tend to be mainly trusts that provide community facilities such as museums, libraries, swimming pools, theatres, and sports grounds. They are not intended to operate at a profit and are characterised as charitable trusts for tax purposes.
21.20. Some councils use holding companies to provide monitoring oversight for some or all of their CCOs, whereas some councils have direct council committee oversight of CCOs. Waitakere City Council uses a holding company whose board comprises two professional directors and the chief executive of the council. ARH has five directors, two of whom are current Auckland Regional Council councillors. Council committees of the Auckland City Council and Manukau City Council directly oversee the CCTOs that manage water and wastewater services.
21.21. A number of Auckland councils hold other investments in property or through CCO holding companies, and have interests in joint ventures with the private sector. Auckland City Council and Manukau City Council hold shares in Auckland International Airport Limited, a publicly listed company. North Shore City Council, Waitakere City Council, Rodney District Council and Infratil Limited formed a joint venture company to advance a case to government for the purchase of Whenuapai airport from central government, and its subsequent development for commercial use. Waitakere City Council holds a minority interest in a joint venture with private interests in a film studio. Manukau City Council operates a landfill and transfer station in an unincorporated joint venture with Transpacific Industries Group (NZ) Limited.
21.22. Auckland City Council has invested $71 million in the development of Vector Arena on land leased from Ngāti Whātua o Ōrākei. A private sector company, Quay Park Arena Management Limited, owns and operates the arena for 40 years under a so-called “BOOT” scheme.17 Manukau City Council has financial arrangements with Counties Manukau Pacific Trust, the operator of the Telstra Pacific Events Centre (which is a council organisation). Councils generally use these arrangements to access private funding and expertise and to provide facilities which councils would find difficult to finance directly. Disclosure of the Vector Arena and Telstra Pacific Events Centre financial arrangements are not covered by the provisions of the LGA 2002, and as discussed later, there are no clear reporting requirements on the financial operations of these facilities or the level of council financial liability. Likewise there is lack of transparency in arrangements relating to the development of Flatbush, which is being undertaken by Manukau City Council in a joint venture with the private sector through the CCO Tomorrow’s Manukau Properties Limited and its subsidiary TMPL (Flat Bush) Limited.
21.23. Incorporation of a council entity as a company provides an additional layer of accountability under the Companies Act 1993. A company has a board of directors that must operate at arm’s length from the shareholder – in this case the council. The Companies Act 1993 sets out the legal duties of company directors, including the duty to act in good faith and in the best interest of the company.18 A director’s relationship with a company is a fiduciary one and the obligations on directors are strict.
21.24. The LGA 2002 requires that objective and transparent processes must be adopted by a local authority in appointing directors of COs and CCOs, including CCTOs.19 The processes cover
A local authority has an obligation to appoint directors who have the skills, knowledge, and experience to guide the organisation, given the nature of its activities, and to contribute to the achievement of the organisation’s objectives.
21.25. Apart from this, the procedures used by councils to appoint directors and monitor board performance are not generally available to the public. There is no statutory prescription for the term of director appointments, although most company constitutions allow for three-year terms.
21.26. There is a special provision for ARTA, whose directors are appointed by an appointments panel established under the Local Government (Auckland) Amendment Act 2004 (“LGAAA”) comprising the chairperson of the Auckland Regional Council, seven persons appointed by the Auckland Regional Council, and one person appointed by each of the seven Auckland territorial local authorities.20
21.27. The LGA 2002 contains certain monitoring and reporting obligations. There is an obligation on all councils to undertake performance monitoring of every council organisation of which they are shareholders (even though the council may hold a very small minority of the organisation’s shares).21 COs are not required to produce a statement of intent.22 There are no specific statutory reporting requirements for COs. The obligations of a CO will depend on its status, for example whether it is a publicly listed or private company, charitable trust, or joint venture.
21.28. For a CCO, the LGA 2002 requires that all decisions relating to its operation must be made in accordance with a statement of intent (“SOI”) and its constitution. SOIs are very important public accountability documents negotiated between the board and the local authority as shareholder.23 They are designed to ensure CCOs give full and accurate reporting of their activities to the shareholders and to the public.
21.29. Under the LGA 2002, CCOs are required to produce and publish an SOI each year. The SOI is required to specify the CCO’s objectives, and the nature and scope of the activities to be undertaken to achieve them. This includes setting tangible financial and non-financial targets which are intended to provide a clear framework within which performance can be measured.
21.30. CCOs are required to prepare a six-monthly report, and an annual report and financial statements within three months of the end of the financial year.24 The annual report must include a statement of service performance which compares actual performance with the SOI. The performance information and the financial statements are audited by the Auditor-General. CCOs’ financial statements are required to be consolidated into the annual financial statements of the council. It is optional whether the proposed expenditures of CCOs are included in a council’s LTCCP. Most councils exercise the option to exclude them.
21.31. A major concern to the Commission is, in some cases, a lack of financial performance targets and the existence of a number of financial arrangements between councils and the private sector, about which there is limited or no financial transparency as discussed in paragraph 21.22. The Commission considers that financial performance targets should be used and financial arrangements and their implications for councils should be transparent to the public and be fully disclosed by the Auckland Council. The Commission notes the recommendations of the 2007 Local Government Rates Inquiry (“Rates Inquiry”) in this regard.25
21.32. Submitters commented on the operations of council organisations, as summarised in Volume 3, Chapters 3 and 4. Many submitters supported the use of CCOs by councils. A common theme was that the large infrastructure areas such as the three waters, public transport, and roading should be managed by experienced board members and staff with business skills. It was also suggested that other sectors such as planning, parks, and economic development were better managed by CCOs.
21.33. Submitters who supported the use of CCOs also saw the potential to streamline bureaucracy. Some expressed the view that regional CCOs could achieve economies of scale and benefits to the whole region.
21.34. Many submitters reinforced the need for robust governance frameworks to ensure the actions of CCOs were transparent and accountable. One submitter called for accountability provisions “consistent with good corporate governance” and emphasised the need for CCOs to have a clear mandate.26 Another submitter called for regional enterprises to operate as “public good” businesses.27
21.35. Opponents of the use of CCOs suggested that councillors should not be allowed to devolve their jobs to independent CCO boards as this was undemocratic. It was said that CCOs work behind closed doors and that their decisions and operations lack transparency. It was considered that they are too independent, with the public being powerless to influence them. A few who argued for discontinuance of CCOs suggested that all services should be provided by employees directly answerable to elected councils. The Auckland Regional Public Health Service was concerned about the “arms length” aspect of CCOs, having reviewed water suppliers’ practices in 2007.28 The submission called for stronger scrutiny mechanisms and relevant non-financial performance measures, where a CCO’s performance has impacts on health.
21.36. Some submitters said that councils should establish trading entities only where there is a benefit to the ratepayers. It was suggested by others that CCOs should operate on a cost-recovery basis and thus should not be profit making. There was also some criticism of profits being used to pay a dividend to the council shareholder, as has been the case with the “charitable contribution” paid by Metrowater to Auckland City Council. As discussed below, the Commission considers that the infrastructure CCOs should not pay a dividend to the council shareholder.
21.37. The Auckland Chamber of Commerce said that members of governance bodies should be appointed through due process and on the basis of “fit for purpose”.29
21.38. A number of submitters were concerned about the prospect of asset sales and saw the creation of a CCO as a possible first step towards privatisation or sale of assets. Several argued that any new governance arrangements should provide for continuing public ownership and control of public assets and services. On the other hand, some submitters suggested that particular enterprises and assets should be sold.
21.39. Unlike State-owned enterprises (“SOEs”) in central government, there is no formal, independent monitoring agency oversight for CCOs.30 Responsibility for governance support and monitoring performance is the responsibility of each local authority, with the exception of Watercare where monitoring is carried out by a joint council shareholder representative group through a formal agreement.31
21.40. The obligation for CCTOs to operate using “sound business practice” may be appropriate for the smaller trading organisations, but it can be argued that the obligation for the larger CCTOs or CCOs which rely on public funding sources should be strengthened. Alignment with the stronger operating obligations of SOEs, which are required to “operate as successful businesses” and be as (profitable and) efficient as comparable businesses not owned by the Crown, should be adopted for larger CCOs.32 This stronger obligation should result in more stringent targets set out in the SOI. The Rates Inquiry recommended that business enterprises owned or controlled by a local authority should be required to operate as a business in the same way as SOEs.33 The Rates Inquiry also recommended that councils establish clear financial targets for investments in CCOs.34
21.41. While in principle the statement of intent provisions provide a sound basis for performance accountability, in practice SOIs may not be adequately formulated. In 2007 the Office of the Auditor-General undertook a performance audit of compliance with the legislative requirements for SOIs across the local government and State sectors in New Zealand.35 Twenty-two of the 54 entities audited were CCOs. The Auditor-General commented,
Although our performance audit found broad compliance with legislative requirements for the statements, the exceptions to this compliance were disappointing. We also found mixed results with the quality of performance targets used by some public entities to measure their performance and later report on that performance to shareholders and the public in annual reports.36
21.42. Ten out of the 22 CCOs did not comply with the statutory obligation to provide the three-year forecast of financial objectives. The audit report noted that it might be appropriate for some statements to span more than three years, “particularly entities which hold significant infrastructural assets”.37
21.43. The Auditor-General reported considerable variation in the clarity and “measurability” of performance targets and their linkage with the organisation’s objectives. Many targets were not easily understood. Fifty percent of the CCOs sampled
21.44. did not have performance targets that addressed all of the entities’ stated objectives. The CCOs in the audit sample were particularly weak on linking their statutory obligations to be good employers and exhibit a sense of social responsibility with specific performance targets or measurements. The audit found that statements of service performance, which are part of a council’s annual report and where performance against targets are documented and published, are not uniformly used. This finding is significant because, without a robust annual performance measurement framework, objective assessment of the performance of the board of directors and the chief executive of the CCO in question may be compromised.
21.45. Failure to fully disclose accounting policies was a common omission identified in statements of intent. In addition, there is no current obligation on CCOs to provide estimates of commercial value of the shareholder’s investment in CCTOs, nor is there a statutory obligation to disclose the methodology used to assess value.
21.46. The Commission anticipates that in future the Auckland Council’s major commercial trading and infrastructure activities as set out below will be undertaken through CCOs.
21.47. For the Auckland Council to plan and deliver the infrastructure and services to meet its requirements, it will need access to the best commercial and engineering expertise and resources. CCO structures and boards of directors can bring these required skills and expertise.
21.48. The Auckland Council must ensure its CCOs are effective and accountable as they will be very large companies by New Zealand standards. Their size requires the very highest standards of governance practice and commercial directors of the highest quality.
21.48. The Commission anticipates that there will be six major commercial infrastructure CCOs to manage:
21.50. The Commission considers that councillors or council staff should not be able to be appointed to CCO boards. Accordingly, the new ARH board should comprise only independent commercial directors.
21.51. The Commission considers that the larger CCOs referred to in paragraph 21.48 should be required to operate as a successful business, and have a clear set of objectives, including financial targets. Statutory changes should be made to ensure these requirements are met.
21.52. The Commission considers that the financial targets of the CCOs listed in paragraph 21.48 should not include the payment of any dividend to the council. In the case of Watercare, the Commission is of the view that it would be inappropriate to build a dividend to the council shareholder into the financial targets, for the reasons discussed in Chapter 26.
21.53. The Commission anticipates that the Regional Transport Authority, Watercare, and ARH will be in place from the establishment of Auckland Council. The CCOs managing urban development, city centre and waterfront development, solid waste, and major event facilities will be established as appropriate and will not necessarily be operative on the establishment date.
21.54. The Commission expects that these new corporate structures will
21.55. The directors will oversee the operations of the organisation in light of the objectives set out in the SOI and any statutory requirements currently applying to CCOs. As currently applies to CCOs and SOEs, the board will appoint the CCO’s chief executive, who will then appoint the CCO’s staff.
21.56. The board of directors will be responsible for monitoring the performance of the organisation and management. The directors will make major decisions, including decisions on prices, major capital investment, and major business initiatives in line with those objectives, but will be subject to the overall policies and funding priorities determined by the Auckland Council, as set out in its LTCCP and reflected in the CCO’s statement of intent.
21.57. Subsequent amendments to reflect the new arrangements may need to be made to the statutes governing the operation and status of Watercare, ARH, and ARTA.
21.58. The entities will need a robust monitoring and performance management framework so that the organisations are accountable for delivering their performance targets. There will need to be adequate public disclosure of
21.59. The governance protocols and reporting processes to be adopted by the Auckland Council need to be first class. Adopting SOE appointment, monitoring and performance management frameworks will ensure Auckland Council’s reporting practices are best practice which is necessary to ensure public trust in the use of arms-length entities.38 These features include
21.60. Chapter 26 sets out in more detail the envisaged content of the SOI for the restructured Watercare (see paragraph 26.194).
21.61. The Commission is of the view that the statutory provisions governing CCOs and SOIs are adequate. What is needed is strong implementation of these provisions so that the deficiencies identified in the Auditor-General’s report are addressed.
21.62. The Commission considers that SOIs should be agreed three yearly (matching the electoral cycle) between the boards of the larger CCOs and the Auckland Council, and be subject to quarterly reporting and annual performance review.40 The SOI should, among other things, clearly set out the policy objectives, strategies, operating requirements, major capital expenditures, performance measures and targets (including financial targets), debt and equity structure, human resource management, and environmental policies.
21.63. To avoid conflict of interest concerns, the Commission considers that Auckland Council and Auckland Council CO and CCO employees, and Auckland Council councillors should be prohibited from appointment to Auckland Council CO and CCO boards.41
21.64. The directors and the chairs of boards would be appointed by the Auckland Council on the recommendation of the appropriate council committee, with advice from the independent appointments advisory panel. The selection process should thus be closely modelled on that used by the Crown Company Monitoring Advisory Unit for the appointment of SOE directors.
21.65. CCOs such as the proposed integrated Watercare and the Regional Transport Authority will be monopoly providers. In Chapter 26, the Commission discusses regulation of Watercare. In Chapter 32, “Achieving a High-Performance Auckland Council”, it recommends the appointment of an external Auckland Services Performance Auditor to provide assurance to the council and the public that all parts of the Auckland Council are providing high-quality services in a cost-effective manner.
21.66. For the larger CCOs that will be part of the Auckland Council, the Services Performance Auditor would review the adequacy and relevance of CCO targets and the accuracy of performance reported against those targets. As discussed in Chapter 32, this would also involve in the case of Watercare and public passenger transport services operated by the Regional Transport Authority
21.67. The relevant committee of the Auckland Council would be responsible for
21.68. The Commission has previously noted that many of Auckland Council’s CCOs will be very large companies by New Zealand standards. Many of the councillors in committee roles will not be experienced in overseeing such large companies. The councillors will need to have the necessary support and capacity to oversee and monitor the CCOs effectively.
21.69. In addition to those capacity-building recommendations made in Chapter 19, “Leadership”, the Commission suggests that the Auckland Council and Local Government New Zealand work together to develop a capacity building toolkit to assist councillors monitor the performance of large infrastructure CCOs.
21.70. It is intended that all existing councils’ interests in CCOs, COs, and exempt organisations will be transferred to the Auckland Council on its establishment date. Statutory provision is to be made for the Auckland Council to assume the assets, liabilities, rights, and obligations in respect of existing companies and entities as part of the reorganisation scheme, as set out in Chapter 31, “Statutory Reform”.
21.71. The Establishment Board for the Auckland Council should review all current CCOs, COs, and exempt organisations in order to position the Auckland Council to make an early decision on which CCOs and COs should be continued. Specific recommendations have also been made by the Commission in relation to Watercare (Chapter 26) and ARTA (Chapter 25), which will need to be implemented.
21.72. The key matters to be addressed by the Establishment Board are
21A All Auckland Council’s major commercial trading and infrastructure activities should be undertaken through CCOs.
21B Larger commercial and infrastructure CCOs of the Auckland Council should have an obligation to operate as a successful business as required under the State-Owned Enterprises Act with a clear set of financial targets and objectives.
21C Statements of intent should be agreed three-yearly (matching the electoral cycle) between the boards of CCOs and the Auckland Council and be subject to quarterly reporting and annual performance review.
21D Auckland Council CCOs and their statements of intent should be subject to performance review by the proposed Auckland Services Performance Auditor.44
21E Auckland Regional Holdings should continue as a CCO managing the Auckland Council’s long-term financial assets, operating to financial targets established by the Auckland Council.
21F Auckland Council, its councillors and employees, employees of COs, CCOs, and local councillors should be prohibited from appointment to Auckland Council CO and CCO boards. Transition
21G The Establishment Board should review all existing CCOs and COs and exempt organisations in order to position the Auckland Council to make an early decision on which CCOs and COs should be continued and, as part of that review, will a) prepare an inventory of CCOs, COs, and exempt organisations, recording their purpose, constitution, assets, liabilities, and legal status b) prepare advice for the Auckland Council on the continuance of these entities c) for continuing entities, define the purpose, objectives, and activities of the entities and the outcomes sought by the council shareholder.
21H The Establishment Board should a) undertake the establishment of the Regional Transport Authority b) oversee the restructuring of Watercare Services Limited into an integrated regional water and wastewater organisation c) provide for the continuation of Auckland Regional Holdings.
21I The interim Appointments Advisory Panel should be used to assist in the recruitment or reappointment of suitable CCO interim board candidates, as required.45
1 Local Government Act 2002 (hereafter LGA 2002), section 6 (defines CO, CCO, and CCTO).
2 The Establishment Board’s role and functions are set out in Chapter 33, “Managing the Transition”.
3 LGA 2002, section 6.
4 Watercare is governed by Local Government Act 1974 and declared not to be a CCO in LGA 2002 section 6(4). Port companies are declared not to be CCOs in LGA 2002 section 6(4). Current legislation relevant to Ports of Auckland Limited governance is the Port Companies Act 1988, Companies Act 1993, and the Local Government (Auckland) Amendment Act 2004 (hereafter LGAAA). See Ports of Auckland Ltd’s submission to the Commission at page 3–7. (All submissions are available at www.royalcommission.govt.nz.)
5 LGA 2002, section 6.
6 LGA 2002, section 6.
7 LGA 2002, section 6(4).
8 LGA 2002, section 7.
9 LGAAA, sections 7–28.
10 Local Government Act 1974, section 707ZZZS, and further described in Chapter 26, “The Three Waters”.
11 Port Companies Act 1988, section 5.
12 LGA 2002, section 59.
13 LGAAA, sections 18–28 impose numerous special requirements on Auckland Regional Holdings.
14 LGA 2002, section 74.
15 LGA 2002, section 70.
16 LGA 2002, sections 62 and 63.
17 A BOOT scheme is a type of public-private partnership that involves building, owning, operating, and transferring infrastructure to and from joint ventures. For an example, see “Vector Arena” at www.aucklandcity.govt.nz.
18 Companies Act 1993, section 131.
19 LGA 2002, section 57.
20 LGAAA, section 11.
21 LGA 2002, section 65.
22 Unless there are special legislative provisions such as those applying to Watercare under Local Government Act 1974, sections 707ZZZS(1)(m) and (n).
23 LGA 2002, section 64, and Schedule 8, set out the requirements for statements of intent.
24 LGA 2002, sections 66 and 67.
25 Local Government Rates Inquiry Panel, Funding Local Government, Wellington, Auckland 2007, p. 163, (available at www.ratesinquiry.govt.nz, accessed March 2009).
26 Submission to the Royal Commission on Auckland Governance from the Auckland Chamber of Commerce, p. iii.
27 Submission to the Royal Commission on Auckland Governance from the Champions for Auckland, p. 7.
28 Submission to the Royal Commission on Auckland Governance from the Auckland Regional Public Health Service, p. 23.
29 Submission to the Royal Commission on Auckland Governance from the Auckland Chamber of Commerce, p. iii.
30 The Crown Company Monitoring Advisory Unit does monitor and provide governance support for three South Island-based CCOs.
31 The role of the Watercare shareholders representative group is described in Controller and Auditor-General, Local Authority Governance of Subsidiary Entities, 2001, pp. 40–44 (available at www.oag.govt.nz, accessed February 2009).
32 State-Owned Enterprises Act 1986, section 4(1).
33 Local Government Rates Inquiry Panel, Funding Local Government, August 2007, p. 163.
34 Ibid., p. 163.
35 Controller and Auditor-General, Statements of corporate intent: Legislative compliance and performance reporting, 2007 (available at www.oag.govt.nz, accessed February 2009).
36 Ibid., p. 2.
37 Ibid., p. 28.
38 Crown Company Monitoring Advisory Unit, Owner’s Expectations Manual for State Owned Enterprises, October 2007, provides an appropriate governance blueprint (available at www.ccmau.govt.nz, accessed February 2009).
39 Ibid., Chapter 3.
40 Ibid., Chapter 4 sets out a business planning and reporting timetable.
41 This governance protocol would also prohibit from board appointments officers or employees of principal contractors, licensees, or franchise holders to the company.
42 The Commission views the development of a customer charter, a formal customer complaint process, and a best practice annual customer satisfaction survey measuring Watercare and the Regional Transport Authority as mandatory elements of a customer performance management system.
43 It is expected that benchmarking would include international industry comparators, out-of-industry (functional business) comparators, and process and customer satisfaction benchmarking.
44 See Recommendation 32G.
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