Decision details

Reading Transport Limited Shareholder Report

Decision status: For Determination

Is Key decision?: No

Is subject to call in?: No

Decisions:

The Deputy Chief Executive submitted a report to the Committee, acting as shareholder of Reading Transport Limited (RTL), setting out the proposed actions and next steps arising from an independent review of RTL’s governance arrangements.  Attached to the report at Appendix 1 was a Draft job description and proposed timeline for the recruitment of new Non-executive Directors.

 

The report explained that, in light of RTL’s trading position and the significant financial impact of Covid 19 on all passenger transport operators, it had been agreed that the Council should commission an independent review into the governance and operating arrangements of the Company with a view to improving its financial viability.  Systra, a leading engineering and consulting firm specialising in public transport had been commissioned in September 2020 to undertake the review and the report set out the key findings and recommendations made by Systra relating to the governance of RTL.  A further report on their review of RTL’s operating arrangements would be considered in closed session (see Minute 14 below).

 

The report summarised the findings and recommendations of the review covering a Framework for Future Board Appointments, Skills Audit, Board Composition and Size, Financial Scrutiny and Reporting, and Audit & Remunerations Committees.  It was recommended that the Council exercised its right under the Company’s Articles of Association to serve notice on RTL’s current Non-Executive Directors effective from 1 January 2022 and begin a formal recruitment process for new Non-Executive Directors.  It was also recommended that the Council as Shareholder review RTL’s Articles of Association and amend them to limit the number or terms a Non-Executive Director could serve to two (eight years in total).

 

At the meeting an additional resolution was moved and agreed regarding the composition of the new Board of Non-Executive Directors and the eligibility of current Non-Executive Directors to re-apply for membership of the Board, as set out in (7)-(9) below.

 

Resolved –

 

(1)      That Systra’s recommendations in respect of their Part 1 report commissioned by the Council be noted;

 

(2)      That the recruitment of a new board of Non-executive Directors to take effect from 1 January 2022 be agreed;

 

(3)      That the Assistant Director for Legal and Democratic Services formally write to RTL’s current Non-Executive Directors serving them with notice and advising them of the recruitment process, once finalised, should they wish to apply;

 

(4)      That the Assistant Director for Legal and Democratic Services prepare a revised set of Articles of Association in line with the recommendations in Systra’s Part 1 report for consideration at a future meeting of the Policy Committee;

 

(5)      That the Assistant Director for Legal and Democratic Services prepare a draft Shareholder Agreement to give effect to the operational recommendations in Systra’s Part 1 report for consideration at a future meeting of the Policy Committee;

 

(6)      That Shareholder representatives sit on the interview panel;

 

(7)      That the current number of eight Non-Executive Board members be maintained;

 

(8)      That the composition of the new Non-Executive Board members include (a) an employee-nominated representative, (b) two reserved places for elected members, and (c) up to a further five Non-Executive Directors with an industry-related specialism;

 

(9)      That all current Non-Executive Board members be eligible to re-apply for membership of the Board.

 

(Councillor Stanford-Beale declared a prejudicial interest in the above item, on the grounds that she was a Council-appointed Non-Executive Director of RTL. She left the meeting and took no part in the debate or discussion.)

Publication date: 15/07/2021

Date of decision: 14/06/2021

Decided at meeting: 14/06/2021 - Policy Committee

Accompanying Documents: