URL: https://rother.moderngov.co.uk/ieDecisionDetails.aspx?ID=1847

Decision Maker: Cabinet

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: To agree to create an Executive Sub-Committee to represent the Council as shareholder

Content: Consideration was given to the report of the Chief Executive on the establishment of an Executive Sub-Committee known as the Shareholder Executive Committee (SEC) to oversee the Council’s company(ies) in the interests of accountability and transparency.   On 22 October 2022, Rother DC Housing Company (RDCHC) was established and formally registered, with the Council as the sole Shareholder.  The Chief Executive was appointed as the Shareholder Representative, who created a Shareholder Representative Oversight Group (SROG) to ensure that RDCHC was governed effectively by the Shareholder, supported by business case updates to Cabinet and annual governance reviews to the Council’s Audit Committee (AC).  Membership of SROG included the Senior Leadership Team (SLT), as well as key officers within the authority.  The SROG had no formal decision-making powers, was not required to hold public meetings and not subject to formal scrutiny.   Establishment of the SEC would ensure better development of mutual expectations of roles and responsibilities, reporting content, and robust monitoring of matters expressly agreed to be reserved to the Shareholder (in the Company Articles; there were currently no reserved matters for the Shareholder).  Appendix B to the report proposed several significant Shareholder Reserved Matters which would be for the SEC to consider in due course.   As per current regulations, responsibility to represent the Council as a Shareholder of a company was an Executive (Cabinet) function, plus the Executive could establish formal sub-committees, delegate functions, set Terms of Reference (ToR), durations and memberships.  It was noted that the governance arrangements would continue to be overseen by the AC.   The current SROG would be disbanded and replaced by the SEC, with Executive functions and membership from all Cabinet Members; the Monitoring Officer would be asked to clarify whether Members who sat on the Corporate Programme Board would have a conflict of interest if they sat on the SEC; this would be confirmed.  Other non-Cabinet Members could be appointed, but they would not have voting rights.  The SEC would act as a decision-making body in the functions delegated to it and would receive support and advice from SLT, together with relevant service directors.  As SEC decisions were executive decisions, they would be subject to the formal call-in scrutiny procedures.       Meetings would be chaired by the Leader, with a Vice-Chair selected from Cabinet Members, open to the public and non-executive Members (without voting rights) could attend and take part in discussion, when specifically invited.  SEC Members must not be on the Board of the Company.  Meetings, along with agendas, would be published on the Council’s website and subject to the rules and procedures relating to exemptions.  The SEC ToR was detailed at Appendix A to the report.   Constitutional amendments would be required and the AC’s recommendation to full Council that amendments be made to the Council’s Constitution in consultation with the Chief Executive and Monitoring Officer had been agreed by full Council on 14 July 2025.   Cabinet was pleased to see the introduction of the SEC which would improve performance monitoring in respect of the company’s financial matters and delivery of its business plan and approved the ToR as submitted.  Councillor Thomas, Chair of RDCHC, welcomed the establishment of the SEC which would improve communications between RDCHC and the Council, as well as raising the profile of RDCHC.    RESOLVED: That:   1)     a Shareholder Executive Committee be established;   2)     the Terms of Reference for the new Shareholder Executive Committee, at Appendix A to the report be approved; and   3)     the Audit Committee’s recommendation to full Council for all necessary related amendments to the Council’s Constitution to be carried out in consultation with the Council’s Chief Executive and Monitoring Officer be noted.  

Date of Decision: July 28, 2025