Report on Eke Panuku Board practices

The press release this week noting the response of the Auckland Mayor into a consultant’s report into the management of conflicts of interest at Eke Panuku (the urban regeneration and property management CCO for Auckland Council) may raise one or two eyebrows. 

Specifically, the comments that:

• the report highlights that there is still work to be done to ensure the Council-controlled organisation has good processes in place; and
• this is a matter of concern that requires attention,

led me to go searching for a copy of the report itself.

The Mayor continued by saying that conflicts of interest will arise given the need for boards to have directors with experience and expertise in the relevant industry.  In the case of Eke Panuku, the property industry.  However, the recommendations in the report needed careful review, including those that the Council consider appointing a minimum number of independent directors and an independent chair.

Whilst the report is specific to Eke Panuku (and pleasingly found no clear evidence of unmitigated conflicts of interest or private benefits arising from a conflict of interest) it highlights:

• That controls to identify and manage conflicts of interest can be made more robust to safeguard the interests of Eke Panuku and protect the board and staff.
• Eke Panuku and the Council should consider the board appointment settings to ensure there is an appropriate balance between the necessary commercial expertise – while ensuring public trust.  The report proposes ways to achieve this and identified where management controls are not solely sufficient to mitigate conflicts of interest risks.  The proposals included:
  • setting a minimum number of independent directors and an independent chair; and
  • limits on the extent of the business relationships that board members may have with Eke Panuku.
• Training and guidance can be improved to support effective management of conflicts of interest.

Comments

The review process for Eke Panuku is ongoing and will not be complete until next year.

Actual or potential conflicts of interest can be perceived or actually arise where and interested board or staff member can either influence or approve decisions or obtain information that may give an unfair advantage if exploited.  Whilst these issues are very important in the context of a publicly-owned entity such as a CCO, they can arise in a wide variety of contexts.  

Consequently, embedding good policies and practices, coupled with effective training and guidance to support the effective management of those policies and practices, is an integral part of good governance.

For a copy of the Eke Panuku report, please see: Eke Panuku – Conflicts of Interest Controls Assessment.