Local authority companies ” should not have many council board members” – so why run the company?

Owl says: If councillors and officers are no good at running commercial companies – why are they being created?

“Local authority-run companies should avoid having too many council members on executive boards to ensure commercial success, CIPFA’s annual conference was told.

The advice on governance was issued today by Mike Britch, chief executive of Norse Group, a firm with a £300m turnover wholly owned by Norfolk County Council, at a workshop on councils and commercialism.

He told delegates the presence of too many members on executive boards could hamper the agility that a small and focused board needed to efficiently deliver services in a commercial environment.

Britch said: “You can’t run a commercial service as a department of a local authority, that means you have to get yourself from under the shackles of a 151 [financial] officer, the monitoring officer and everybody else who wants to reduce what they perceive as the risk to their shareholders.

“You need to have commercial and operational freedom to trade and to make the decisions you need to make.” …”