The minute reference from the Legal & Democratic Services Advisory Committee was tabled. The Portfolio Holder for Legal & Democratic Services presented the report which provided information on how the new Trading Company Quercus 7 Limited would work operationally and requested Cabinet to approve the current working and further proposed arrangements. The Legal & Democratic Services Advisory Committee had considered the same report and had agreed to recommend it to Cabinet.

The Portfolio Holder for Legal & Democratic Services introduced Louis Sebastien from Trowers & Hamlins who gave a brief background to the report and ran through the anticipated workings of the Trading Company.  All Members present had the opportunity to ask questions of clarification concerning the report and proposals.

In response to questions Mr Sebastien and the Chief Officer Legal & Governance agreed to investigate and report back to Members with regards to whether the Trading Board could be ‘classed’ as shadow directors.  It was noted that the Chief Officer Legal & Governance hoped to have completed the Shareholder Agreement before leaving the Council, and had completed the first draft which would be circulated to relevant Portfolio Holders.  With regards to dividends and loan repayments, the facility agreement would specify the terms of the loan and the Articles of Association set out the process for payment of dividends. With regards to the business plan, the Executive Board would draft it and it would be reviewed by the Trading Board.

It was clarified that it was only intended that the Trading Company would be used as a last resort, and that any property to be or already acquired by the Council would preferably be managed by the Council. State aid rules were also explained.  The Non Executive Directors of the Company would only be involved in Company matters and could not get involved in looking after the Council’s property investment portfolio.

With reference to the queries raised at the meeting of the Legal & Democratic Services Advisory Committee, it was clarified that since the Companies Act 2008 there had no longer been a requirement to have a Company Secretary.  However, for the operational activities of the Trading Company the position of Company Secretary had been written into the articles of association as there was no advantage gained in not having one.  It was anticipated that this role would be carried out by an officer from within the Council’s legal team.

Public Sector Equality Duty

Members noted that consideration had been given to impacts under the Public Sector Equality Duty.

Resolved:  That the following working arrangements be approved

a)     the appointment of Chief Officers initially put forward as Directors on incorporation;

b)     the composition of The Trading Board, established to oversee the trading activities of the Company, to comprise the Cabinet with a quorum of three Members to be chaired by the Leader of the Council;

c)     the job description and specification required to recruit the 2 Non-Executive Directors as set out at Appendix B and such recruitment to be either using internal resources or through a firm of specialist Management & Recruitment Consultants with an approved budget of up to £6,000 in this respect;

d)     remuneration to be paid to the Non-Executive Directors up to £5,000 each; and

e)     the Chief Officer Legal and Governance in conjunction with the Chief Finance Officer be authorised to finalise a Shareholder Agreement and Loan Arrangements for the Company in conjunction with relevant Portfolio Holders.

(Cllr Fleming arrived towards the end of debate of this item, was seated in the public gallery and did not take part in the remainder of the debate or voting thereon.  Once the recommendations had been agreed he took his seat as Chairman)