Shareholder Executive Sub-Committee

Overview   1.1.The Shareholder Executive Sub-Committee (“SESC”) forms part of the overall governance arrangements for Somerset Council (the Council ) in relation to companies and other legal entities which are wholly or partly owned or controlled by the Council (including where such control comes about indirectly, such as via a loan agreement) (each a Company and together the Companies ).    1.2.The SESC is a sub-committee of the Executive and will exercise the Council’s role as shareholder in any company, whether wholly or partly owned by the Council (including joint ventures) for the purposes of service provision and/or trading activities.  The SESC acts with the delegated authority of the Executive to ensure the performance of any such company is satisfactory.   1.3.For the purpose of companies where the council is a part owner, the SESC will determine how the Council’s representative on the shareholder board of that company will vote. This is particularly important in any matter where the Monitoring Officer and/or the Section 151 Officer have advised that the matter to be voted has significant legal and/or financial implications for the Council.   1.4.Any decisions required to comply with the Council’s Standing Orders will be taken by Executive and not delegated to the to the SESC. However, the SESC may make recommendations to the Executive as to the decision to be made.   1.5.Any reference to “Companyin these terms of reference is to a company where the Council is a sole or part owner of that company (a capacity which is generically defined as Shareholder" for convenience).   1.6.The Leader of the Council shall appoint five members from the Executive to be members of the SESC:   Membership   ·       Leader of the Council (Chair). ·       Executive Lead Member for Finance, Procurement and Performance (Vice-Chair). ·       Executive Lead Member for Economic Development, Planning & Assets. ·       Executive Lead Member for Adult Services, Housing and Homelessness. ·       Executive Lead Member for Communities, Housing Revenue Account, Culture and Equalities & Diversity  

Advisors

Chief Executive The Monitoring Officer Section 151 Officer Head of Legal Services and Deputy Monitoring Officer Any nominee(s) of the above-named officers. Such other officers and persons as may be required including an officer/Member from the service, the company or suitably experienced non-Executive Director. Clerk from Democratic Services

Where there is a conflict of interest, the Leader may select an alternative Executive Member to sit on the SESC, subject to the maximum number of five Members including the Leader.   1.7.The officers and/or the appointed representatives will be advisors to the SESC to provide open and strong technical advice.  Additional advisors may be invited to attend the SESC as required.   Purpose   1.8.In so far as any action does not conflict with the budget and policy framework, as approved by Council from time to time, the SESC will:   a.    exercise all the powers of the Council as Shareholder contained in the Companies’ Shareholder Agreements, including the Reserved Matters, and any powers reserved to the Council as Shareholder in the Companies' Articles of Association.   b.    make decisions on behalf of the Council as Shareholder in line with delegations agreed by Executive.   c.     have the power to appoint and remove directors on the boards of the Companies.   d.    monitor delivery of Company Business Plans and recommend revised Business Plans to Executive for approval on an annual basis.   e.    endorse any other amendments to Company Business Plans, so long as the proposed amendments do not constitute a substantial alteration to the Business Plan(s) then in force, such as the acquisition of a new business, the closure of an existing one, or a change of greater than 20% to the forecast revenue, expenditure or profit of the Company.   f.      periodically evaluate financial and service performance of a Company.   g.    Subject to the recommendation of the board, to determine the distribution of any surplus or the issue of any dividends from a Company.   h.    consider any recommendation from Company Directors to cease trading (although other than Company insolvency, such a decision would require Executive approval).   i.      report to Executive annually or as required on the activities of the Company.   j.      review the risks associated with trading activities.   k.     receive and approve the Companies’ annual report and receive the Companies’ annual accounts.   l.      consider and approve any proposed changes to the Company's Articles of Association.   m.   provide Companies with clear strategic direction and support in its role as Shareholder.   n.    evaluate board effectiveness, governance and processes.   o.    oversee compliance and provide assurance.   p.    consider and advise on the duties and if any, the training needs of potential Directors to allow them to competently assume this role.   q.    In the case of forming a new Company, the committee will first scrutinise the business case for forming the Company to clarify the service components to be delivered, outcomes sought and options for how these may be delivered and undergo an effective comparison of alternative delivery models to ensure that the objectives, timescales, and drivers of forming the Company is the optimum approach and; An advisory paper will be submitted to Executive for a decision.   1.9.The SESC will not have operational control over Companies.   All decisions regarding the day-to-day operation of each Company, its business developments and commercial opportunities, staff terms and conditions and the development and implementation of its internal procedures, rest with the Directors of each Company, consistent with the memorandum and articles of association, and its approvedbusiness plans.   For further details, please see the Constitution or email Democratic Services on democratic@somerset.gov.uk