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Councils need to commit to best practice

3 December 2013

Councils need to commit to best practice

Media Release


The report released today from the Office of the Auditor-General on Kaipara District Council’s wastewater project at Managawhai highlights the need to improve governance throughout the sector according to the Institute of Directors (IoD).

IoD Chief Executive, Dr William Whittaker said “In this case it was clear that councillors failed to ask management the right questions or to effectively monitor the project. Both tasks are fundamental functions of a governance body. When you combine the ineffectiveness of the Council with management’s lack of expertise in key areas it was clear the project was going to be fraught.”

“In all sectors there are good boards and councils and those that have significant room for improvement. Effective local governance is vital for the success and prosperity of our regions, and our country. Every councillor needs to take responsibility to ensure they fully understand their governance role and respond to ratepayers’ expectations just as a director must to shareholder expectations. They must recognise that their role as councillors is to act in the best interest of their community and as a director they must deliver shareholder value. This means making well-informed decisions, quality investments and wise use of the resources they are the guardians of,” Dr Whittaker said.

“Ratepayers also need to take a more active role in ensuring that individuals with the right skills are elected to their Councils. These are large complex organisations that have substantial assets and responsibilities which makes the need for effective governance even greater. It is vital that councils and councillors are held to account and that as ratepayers we do not accept governance failures in local government and that we demand best practice from our officials.”

Dr Whittaker concluded, “The IoD is committed to raising governance standards and improving performance in all areas of New Zealand business and society. We have pledged our support to Local Government New Zealand (LGNZ) and have a formal agreement in place to further develop governance capability of local authorities with a series of programmes to be launched in the new year. We are looking forward to being a part of improving governance in this sector.”

ENDS


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