Agenda item

The Streetscene Project Manager’s report updated the Committee on activities relating to governance of the Company and sought agreement to key elements, specifically for controlling the LATCo through updating the Articles of Association and approving the Shareholder Agreement.

East Devon Environmental Services Ltd (the LATCo) was formally registered as a company in November 2025 and was starting operations to prepare for the handover of service delivery in July 2026. It was currently governed by model Articles of Association, and the Council controlled the company through its Shareholder Committee, which was a sub-committee of Cabinet.  Extensive legal support had been provided by Bevan Brittan to support creation of the company and ensure effective governance and operating arrangements.  The proposed Shareholder Agreement and the updated Articles had been produced by Bevan Brittan, working in conjunction with officers and members of the Shareholder Committee.

The Shareholder Agreement was a key document for governance and control of the company.  It set out the framework for how the Council would exert its control as the sole owner of the company and strategic arrangements for how the company would operate.  The document reflected the governance arrangements agreed by Cabinet in July 2025 and feedback from the review process had been incorporated into the final version.  It was noted that the Shareholder Committee had authority to approve the Shareholder Agreement and to agree future changes.  It was a key function of the Shareholder Committee to monitor the Company’s performance and the Shareholder Agreement set out the framework for this to happen.

The Articles of Association set out the basic structure and governance arrangements for the Company, which were built on the Shareholder Agreement.  This included the structure of the Board, the role of Director and the issuing of shares.  The Company was registered using template Articles of Association, which enabled its formal creation but must be updated to reflect requirements in the Shareholder Agreement and wider governance needs. Bevan Brittan had developed fully formed Articles which had been reviewed by the Monitoring Officer and officers within the Place Directorate.

Bevan Brittan had been instructed to produce proposals for the terms of reference for the Committee. These set out its purpose, functions and operating arrangements, to ensure it undertook the Council’s role as owner of the Company in an effective manner.  The Director – Governance updated the Committee that advice from the Company Secretary was that she be granted delegated responsibility to sign a written resolution on behalf of the Company to adopt the Articles of Association.

The Vice Chair had submitted a number of questions related to the reports in advance of the meeting.  Full responses had been developed by the LATCo Project Team and reviewed by the Council’s Monitoring Officer.  These were attached as Appendix A to the minutes.

The Vice Chair requested clarification on the definition of days in section 9.3 of the Articles of Association, which he felt should be consistent and specific.  It was agreed to replace ‘seven calendar days’ with ‘five business days’.

The LATCo Shareholder Committee agreed that the definition of Observer in section 1.1 of the Shareholder Agreement should be amended to include ‘observers have speaking rights at Board meetings but cannot vote on proposals’. 

Following discussion of the Terms of Reference it was agreed that wording be amended under the competency heading to read that ‘All members of the Shareholder Committee and Cabinet members attending as reserves must: (a) undertake mandatory training in the relevant law and procedures which relate to the Committee’s work’.  This replaced the previous wording which stated that members must ‘have undertaken’ training.

RESOLVED:

1. that the Shareholder Committee (SHC) review and agree:
   1. the updated Articles of Association
   2. the Shareholder Agreement
2. that the Shareholder Committee to review the proposed Terms of Reference and
   1. endorse them and propose their consideration by the Constitutional Working Group as changes to the Council’s Constitution.
   2. agrees to operate within the Terms of Reference until such time as the Constitution is amended to regularise the activities of the Committee.
3. that the Shareholder Committee delegates authority to the Director – Governance to sign a written resolution on behalf of the Company to adopt the Articles of Association.