Meeting documents
Executive (I)
Friday, 28th March, 2014
| REPORT TO: | 10 |
| DECISION NUMBER: | PH/36/2014 |
| EARLIEST DATE FOR DECISION: | 28th March 2014 |
ARTICLES OF ASSOCIATION AND MEMORANDUM OF AGREEMENT FOR BLACKPOOL OPERATING COMPANY LIMITED | |
| Matter for Consideration: To consider the adoption of an updated set of Articles of Association for Blackpool Operating Company Limited and to seek the Council’s agreement to the proposed Memorandum of Agreement between the Council and Blackpool Operating Company Limited. | |
| Information: The Memorandum and Articles of Association for Blackpool Operating Company Limited have not been updated since the 1980s and since that time there have been numerous changes, including but not limited to, the Companies Act 2006. The Council’s Executive also agreed a ‘Governance Code of Practice’ for all of its wholly owned companies in October 2012, which was shared with the Blackpool Operating Company Limited in December 2012. Since then, some of the principles contained within the Code of Practice have been implemented. These include a councillor being appointed as Chairman, the commencement of Shareholders Panel meetings (including a greater sharing of information) and the appointment of the Council’s Monitoring Officer to the position of Company Secretary. The amended Articles of Association (the Memorandum document which accompanied the articles is no longer relevant under company law and the term has therefore been dropped) and the new Memorandum of Agreement formalise those principles and set out updated governance arrangements and a framework for co-operation between the Council and Blackpool Operating Company Limited. A scrutiny panel of the Council was asked to consider the principal changes to the amended Articles of Association and the proposed Memorandum of Agreement and that panel, chaired by Councillor Williams, endorsed all the proposals within the documents which were are being put forward. The Blackpool Operating Company Limited Board approved the updated Articles of Association for formal submission to the Council at its meeting on 20th March 2014. The Council now has to consider the Articles of Association through its Executive decision making process, within 28 days (this Cabinet Member decision is effecting that proposal). Following this decision, the revised Articles of Association will have to be lodged with Companies House within 15 days of the decision. There has never been a document in place setting down the working relationship between the Council and Blackpool Operating Company Limited. A draft Memorandum of Agreement was also considered which would provide an effective mechanism setting down key principles and using the Shareholders Panel (a meeting between shareholder representatives and company representatives) to discuss more strategic issues with regular scheduled (operational) meetings taking place in between the Panel meetings. The draft Memorandum of Agreement was approved by the Blackpool Operating Company Limited Board on 20th March and this now requires agreement by the Council (again by way of this Cabinet Member decision). The proposed Articles of Association and the Memorandum of Agreement are based on a model produced for adoption between the Council’s wholly owned companies. The Board of Blackpool Transport Services Ltd adopted similar documents in January 2014 and the Board of Blackpool Coastal Housing Ltd is due to consider similar documents at its meeting in April 2014. This will help ensure consistency of operation and governance across the companies. | |
| Does the information submitted include any exempt information? | NO |
| Legal Considerations: The current Articles do not reflect current company legislation and need to be updated to take into account legal requirements introduced by the Companies Act 2006 and other relevant legislation. The Companies (Tables A to F) Regulations 1985 (more commonly known as Table A), which have since been amended in line with the Companies Act 2006 and the Companies (Model Articles) Regulations 2008, set out standardised model articles which companies can use as the basis for their own articles. These have been used in updating these articles of association. The Memorandum of Agreement deals with the strategic objectives of the Council which it would like the company to support and matters such as liaison between the organisations and how the Council should exercise its statutory controls. | |
| Personnel Considerations: With regards to publication of information relating to the affairs of the company, this is to ensure consistency and transparency for all wholly owned Council companies. The Council shall have regard to the commercial interests of the company and the personal privacy of the company directors when determining what information is to be published. | |
| Financial Considerations: There are no financial implications connected with this report. | |
| Performance Management Considerations: The proposed Memorandum of Agreement and the Shareholder’s Panel will enable the Board to be held to account by the Council and ensure clear two way communication. | |
| Risk Management Considerations: An updated set of articles of association protects the company with regard to its governance arrangements. A Memorandum of Agreement between the Council and the Company reduces the risk of each party not being aware of the expectations of the other. | |
| Relevant Officer: Neil Jack, Chief Executive | |
| Relevant Cabinet Member: Councillor S. Blackburn | |
| Consultation Undertaken: Prior to the Board considering the final documents, informal consultation was undertaken with the members of the Board and the Managing Director of the company on the draft documents and feedback was received. | |
| Background Papers: | |
| Is this a key decision? | NO |
| Is the decision required in less than 5 days? | NO |
| Recommendations: To approve the recommendation of the Blackpool Operating Company Limited Board as set out in the written resolution of the Board (attached at Appendix A) to adopt the Articles of Association (attached at Appendix B). To endorse the Memorandum of Agreement (attached at Appendix C) between the Council and Blackpool Operating Company Limited and to authorise the Leader of the Council to sign the Memorandum of Agreement on the Council’s behalf. | |
| Reasons for Recommendations: To bring the Articles of Association up to date, in order to comply with legislation and be consistent with the Articles of Association and Memorandum of Agreements proposed for the other Council companies. The two documents also implement the wishes of the Council expressed in the Governance Code of Practice agreed by the Executive in October 2012. | |
| Is the recommendation contrary to a plan or strategy adopted or approved by the Council? | NO |
| Is the recommendation in accordance with the Council’s approved Budget? | YES |
| Other alternative options to be considered: • To not agree to the proposed Articles of Association (although a version does need to be approved as the current set is out of date) or to the proposed Memorandum of Agreement. To refer the proposed Articles of Association and Memorandum of Agreement back to the Blackpool Operating Company Limited Board with proposed changes | |
| Policy, Overview, and Scrutiny Committee Chairman (where appropriate) Date Informed: N/A Date Approved: N/A | |
| DECLARATION(S) OF INTEREST (if applicable) None | |
| Decision: The Leader of the Council agreed the recommendation as outlined above namely: 1. To approve the recommendation of the Blackpool Operating Company Limited Board as set out in the written resolution of the Board (attached at Appendix A) to adopt the Articles of Association (attached at Appendix B). 2. To endorse the Memorandum of Agreement (attached at Appendix C) between the Council and Blackpool Operating Company Limited and to authorise the Leader of the Council to sign the Memorandum of Agreement on the Council’s behalf. | |
| Date: | 28th March 2014 |
| Reason for Decision: To bring the Articles of Association up to date, in order to comply with legislation and be consistent with the Articles of Association and Memorandum of Agreements proposed for the other Council companies. The two documents also implement the wishes of the Council expressed in the Governance Code of Practice agreed by the Executive in October 2012. | |
Date of Publication: | 28th March 2014 |
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