Final CEDA Director Appointment Policy 2023.pdf

Central Economic Development Agency Limited

Appointment of Directors Policy

Adopted:
Manawatū District Council 2 March 2023
Palmerston North City Council 1 March 2023

W    pncc.govt.nz    l    E  [Palmerston North City Council request email]  l    P  +64 6 356 8199   l   Private Bag 11034, The Square, Palmerston North, New Zealand

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4.
REMUNERATION AND OTHER BENEFITS OF DIRECTORS .................................. 9
4.1
Fee Setting ..................................................................................................................... 9

1.
INTRODUCTION
This Policy applies to the appointment of Directors to the Central Economic Development
Agency (CEDA) (four to six directors appointed by the Councils).  CEDA is a Council controlled
Organisation (CCO) jointly-owned by Manawatū District Council and Palmerston North City
Council (the Councils).
A CCO is an organisation which Council (alone or with other councils) controls more than
50% of the voting rights or appoints more than 50% of directors.

1.1  Purpose of Policy

This policy sets out an objective and transparent process for:

a)
The identification and consideration of the skills, knowledge, and experience
required of directors of the Central Economic Development Agency Limited (CEDA);
b)
The appointment of directors of the CEDA Board; and
c)
The remuneration of directors of the CEDA Board.
1.2  Definitions

Councils
Means the Manawatū District Council and
Palmerston North City Council.
Electoral College
A group of six elected members responsible
for recommending appointments of CEDA
directors to the Councils.

The College consists of the two Mayors, two
elected members from MDC and two elected
members from PNCC.
MDC
Means the Manawatū District Council
PNCC
Means the Palmerston North City Council

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1.3  Amendment or Replacement of Policy

The Manawatu District Council and Palmerston North City Council may, from time to time,
amend or replace this policy. In doing so, the Councils will consult with CEDA.

1.4  Exceptions of Policy

There may be circumstances in which adherence to this policy is not appropriate. Should the
Councils decide not to comply with any provision, the decision should be recorded by way of
resolution (which should also include the reason for deviation from the policy).
2.  DIRECTOR SKILLS
2.1  Range and Quality Skills

In appointing directors, the Councils will be seeking persons with relevant skills and an ability
to  make  a  significant  contribution  to  the  successful  operation  of  CEDA.  Directors  must  be
located  in  New  Zealand.    The  need  for  balance  between  new  and  existing  directors,  who
have  first-hand  knowledge  of  and  experience  in  the  activities  of  CEDA,  will  also  be
considered.

The range and quality of skills will vary from one position to another. The appropriate skills
will be determined by the members of the Electoral College in consultation with CEDA so as
to meet the performance needs of CEDA.

2.2
General Skills

The  Councils  in appointing any person to be  a director of CEDA will consider the  following
skills existing in that director or elsewhere on the CEDA board:

•
Proven track record in economic development;
•
Major event, tourism, visitor or destination marketing experience;
•
Experience conducting business internationally;
•
Strong financial knowledge;
•
Communication and marketing skills;
•
Proven track record conducting business;
•
People and talent skills
•
The ability to interface between the private sector, iwi and local government;
•
Understanding of tikanga Māori and Māori business and
•
Any other skills that the Councils consider appropriate to the business of CEDA.

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Successful board members will include:

•
Impeccable ethics and integrity;
•
Strong communicators;
•
Natural leaders with the ability to take people with them; and
•
Clear and creative thinkers.
3.  APPOINTMENT AND REMOVAL OF DIRECTORS
3.1  Number of Directors

The CEDA Board shall consist of a minimum of four (4) and a maximum of six (6) directors.
3.2  Appointment

Directors shall be appointed by the Councils for terms of up to three (3) years, and for a
maximum period of nine (9) consecutive years.
3.3  Electoral College

a)
The  Electoral  College  shall  comprise  of  six  (6)  members,  three  (3)  appointed  by
PNCC, one of which should be the Mayor, and three (3) appointed by  MDC, one of
which should be the Mayor.
b)
PNCC and MDC may remove and replace their appointees to the Electoral College at
any  time  by  giving  notice  in  writing  to  the  appointee  in  question  and  notice  in
writing to the Joint Committee.
c)
PNCC and MDC agree to appoint persons to the Electoral College in a timely manner
to ensure that at all times an operative Electoral College is in place and provide all
necessary  assistance  including  administrative  assistance  and  facilities  in  order  to
ensure the Electoral College can effectively undertake its role.
d)
The voting of the Electoral College shall be by way of majority and  decisions of the
Electoral College may not be made unless all members of the Electoral College are
present at a meeting either in person or electronically (sight or sound).
e)
The  Electoral  College’s  role  is  to  make  recommendations  to  the  Shareholders
concerning  the  appointment  of Directors to  the  CEDA  board.  The  Electoral  College
may  also  be  used  as  the  conduit  between  the  Shareholders  and  the  Directors  in
circumstances  when  it  is  necessary  or  desirable  to  formulate  a  co-ordinated
approach for matters affecting the Company.
3.4  Appointment of Directors

a)
The  Councils  will  appoint  directors  jointly  on the  recommendation  of  the  Electoral
College  (including  any  reconsidered  recommendation,  and  taking  into  account  the
CEDA board skills sets).
b)
Where a recommendation has been received from the Electoral College with respect
to the appointment of directors, and that recommendation is not accepted by one
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or  both  of  the  Councils,  the  Councils  may  ask  the  Electoral  College  to  provide  a
further recommendation.
3.5  Staggering Appointments

Appointments will be staggered so that approximately one-third of the board is rotated each
year.  Staggering  appointments  to  the  board  ensures  there  is  an  appropriate  level  of
institutional knowledge  retained on  the  board, which in turn provides for continuity in the
management of CEDA.

3.6  Administration of Appointments

PNCC and MDC shall administer appointments alternatively on a three yearly basis in line
with the council term.
3.7  Appointments

Once  a  vacancy  has  been  established,  the  Council  responsible  for  administering  an
appointment will work with a director recruitment consultant to manage the advertising and
administration  for  seeking  applications  and  arranging  Electoral  College  meetings  and  any
relevant administration work around this.
The  Electoral  College  will  identify  the  skills,  knowledge  and  experience  required  for  the
position  with  the  assistance  of  a  director  recruitment  consultant.  This  may  involve
discussions  with  the  Chair  and  consideration  of  the  results  of  board  performance  reviews
and composition on the board.
Applicants  may  be  sought  through  a  combination  of  the  following  search  methods:
advertising of the position, nominations from the mayor, councillors. In addition, a director
recruitment  search  and  checking  the  availability  of  candidates,  will  form  part  of  the
appointment process.
A  complete  list  of  applicants  will  be  compiled,  usually  with  the  assistance  of  a  director
recruitment consultant.
The  Electoral College, with assistance  from a recruitment consultant, will  screen the list to
ensure that the candidates / applicants have the required core competencies as well as the
specific  skills  and  expertise  required  for  the  position.    The  screening  will  prepare  a
recommended short list of applicants for consideration.
The Electoral College will select the candidates for interview from the recommended short-
list and interviews will be undertaken by the full Electoral College.
The  Electoral  College  will  assess  candidates  against  the  required  skills,  knowledge  and
experience and may take into account other factors such as:
• the demographic and geographic diversity of the board
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• board dynamics and stakeholder relationships
•  the  capacity  of  applicants  to  attend  regular  board  meetings  and  fulfil  the  other
requirements of the directorship
• succession planning.
The Electoral College will recommend its preferred candidates to each Council for approval.
3.8  Reappointment
CEDA will advise the Mayors and Chief Executives of the Councils of the impending expiry of
a director's term. Such advice  shall be  provided no later than three  (3) months before the
date of expiry of a director’s term in office.
The  Chief Executive  of  the  Council  responsible  for  the  administration  of  appointments  will
seek  applications  to  fill  the  vacancy  unless  exceptional  circumstances  apply.  Exceptional
circumstances  include  such  things  as  when  CEDA  is  in  the  midst  of  a  major  project  where
continuity of  the  existing directors  is  accepted  by  the  J  Councils  as  a  critical  factor  for  the
success of the project.
All director vacancies for CEDA are to be advertised unless exceptional circumstances apply.
a)
In the event that a retiring director is available to be considered for reappointment,
in  addition  to  receiving  that  director's  application,  the  Chief  Executive  will  seek
advice from CEDA as to whether the following criteria are being met:
i.
That an appropriate contribution has been made by the retiring director to
the effective governance of CEDA;
ii.
That  the  relevant  skills  of  the  retiring  director  fit  the  skill-set  required  by
CEDA; and
iii.
That  the  organisation  is  meeting  the  agreed  requirements  of  the  current
Shareholders Agreement.
b)
In obtaining information on these criteria, the Chief Executive will seek advice from
the  Chairperson  of  CEDA,  or  if  the  Chairperson  is  the  person  being  considered  for
reappointment, from the Deputy Chairperson of CEDA or other person appointed by
the governing body of CEDA.
c)
The Chief Executive shall report to the Electoral College on these criteria in relation
to a retiring director.
d)
The  Councils  may  reappoint  a  person  without  following  the  full  appointment
procedure if the term of reappointment to CEDA is for six months or less.
Board members should not be given any expectation that they will be offered a subsequent
term of office.
3.9  Removal

A director of CEDA may be removed from office by notice from the Councils at any time.
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3.10  Local Government Act

Any  appointment  or  removal  of  a  director  must,  at  all  times,  comply  with  the  Local
Government Act 2002.
3.11  Vacation of Office

A Director vacates office if any of the following occurs:
a)
The Director resigns by notice in writing to the Mayors of the Councils. The notice is
to be effective when it is received by the relevant parties or at a later time specified
in the notice;
b)
The director is removed from office in accordance with clause 3.7;
c)
The director becomes disqualified from being a Director pursuant to section 151 of
the Companies Act 1993;
d)
The director dies;
e)
The  director  fails  to  attend  three  (3)  consecutive  meetings  of  the  board  without
leave of the other directors.
3.12  Appointment of Directors by the Board

Where a  director vacates office, the continuing  directors may, with the written consent of
the J Councils appoint any other qualified person to hold office as a director in that director’s
place until a replacement director is appointed by the Councils.
3.13  Chairperson

The  Chairperson  of  the  board  shall  be  appointed  from  the  members  of  the  board  by  the
Councils.  If  the  Councils’  appointed  Chairperson  is  not  present  at  any  meetings,  then  the
members present can appoint a Chairperson for that meeting.
3.14  Eligibility for Appointment

Appointment of Councillors
Under this policy, no councillors may be appointed to the board.

Appointment of Council Officers
Under this policy, council officers are ineligible to serve as a director on the board.
Any  board  member  applying  for  employment  with  either  council  should  resign  from  the
board immediately following an offer of appointment.

Appointment of CEDA Executives to CEDA board
Board  members  should  be  independent  from  management  and  should  not  hold  executive
positions in CEDA.
In the event that that a board decides that one of its members should fill a vacancy in the
executive team, the board member must first resign from their position on the board.

Other Exclusions
Immediate family members, of elected members, of the chief executive, and of second tier
managers of either Council are also prohibited from serving as board members of CEDA.
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4.  REMUNERATION AND OTHER BENEFITS OF DIRECTORS
Board members’ fees will compensate board members fully for their normal contribution to
the  board,  including  attending  board  and  Committee  meetings,  meeting  preparation,
stakeholder management and any other agreed tasks.

Board members’ fees will reflect the element of public service in serving on the board of a
CCO and will accordingly be set at level for comparable public sector entities.

To ensure transparency, fees will be set by the Councils for the board members and Chair,
rather than allocating a pool to be distributed by the board. Fees are to be met from CEDA’s
own resources.
4.1  Fee Setting

Board members’ remuneration will be reviewed once per triennium following council
elections. A full review will be conducted and will include benchmarking against comparative
entities. The review will consider market movement and the final decision on board
members’ remuneration will be made by a resolution of the Councils. Fees will be set taking
into consideration the following:
a)  the size and scale of CEDA (e.g. turnover, value of assets, number of employees)
b)  complexity and scope of operations (e.g. complexity of issues, level of guidance for
decision-making, relationship management responsibilities)
c)  accountability (e.g. scale of market risk, public interest and profile, potential risk to
director reputation, and other key risks)
d)  skills - the type of expertise and specialisation needed.

Special considerations may also be included in setting fees, such as a temporary increase in
workload for the board, or difficulties in recruiting particular skills.

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