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Welcome to Wellington’s award winning waterfront!
The more commercial activities of local authorities now are routinely delivered at “arms length” through companies, now referred to under the Local Government Act as Council Owned Organisations (CCOs). One long standing CCO in Wellington is Wellington Waterfront Ltd (WWL). In this article, Fran Wilde, the company Chair, and also a former Mayor of Wellington and MP for Wellington Central, describes the relationship between the company and its shareholders.
Wellington Waterfront Ltd is mandated to implement the city’s vision for its waterfront – a development zone encompassing the historic port area, defined through its own act of Parliament, which was passed in the 1980s.
The Wellington City Council appoints the board of WWL – currently six directors, all external – through a rigorous process that it applies to all its trusts and companies.
Because it is a limited liability company, the directors and officers of WWL have the same duties and liabilities as those of any other company under the Companies Act. However, as a council–controlled organisation (CCO), we also have a legal requirement for an annual Statement of Intent to be agreed with the Council and ranking with the company’s constitution as a guiding document.
The Local Government Act requires a CCO to achieve the commercial and non-commercial objectives of its owner, be a good employer, exhibit a sense of social and environmental responsibility and, if it is a trading organisation, conduct its affairs in accordance with sound business practice.
Clearly these requirements are broader than those imposed on private
sector companies by the Companies Act. This provides both the interest
and the challenge
of working in the local government context.
In the case of Wellington Waterfront Ltd, we understand that our stewardship
of the waterfront will be a critical factor in ensuring a high quality of
life for Wellingtonians. The waterfront is a very special place for residents
and
visitors alike; decisions taken now will have a major impact for many years
to come.
This means that, while we need to conduct our commercial affairs in a
prudent way to optimise profit from deals with developers, we are also
obliged to deliver
high quality public space and to look forward to what the needs of our community
are likely to be in the future. This juggling act is not always easy.
The Wellington City Council has developed a comprehensive, high-level plan
for the waterfront, called the Waterfront Framework. This outlines the city’s
aspirations for the area and for each of the discrete precincts within it.
The Framework provides guides on preferred uses, heritage preservation, cultural
celebration and many other aspects, and is the basis for all decisions made
by WWL.
The company has a long-term strategy and each year works through its annual business plan, which is then presented to the Council for approval. The annual Statement of Intent is in effect a summary of the principal objectives that the city wants the company to achieve that year.
In addition to the shareholding Council, there is a larger group of stakeholders who scrutinise and comment on our work. They are the citizens of Wellington, the ultimate beneficiaries of our actions. We have a duty to keep them informed and to consult with them on proposals. This adds to both the cost and complexity of our work, but is an essential part of life as a CCO.
Overall, there is no doubt that the community and political elements superimposed on CCOs result in a completely different environment from that in which other companies work. This demands a commitment to transparency, allowing the public airing of information that in other cases (for example, relevant to WWL, other private development companies) would not be necessary.
Yes, it can be frustrating – but, on the other hand, community input can be very helpful. The key to its effectiveness is to ensure that the process is not captured by small, unrepresentative interest groups and that decisions are made for the wider good. This is, of course, the essence of successful democracy and applies to both elected organisations and companies in the public sector.
