South Australian Current Acts South Australian Current ActsSchedule 2—Provisions applicable to subsidiaries
Part
1—Subsidiaries established by one council
1—Application for Ministerial approval
(1) A council
proposing to establish a subsidiary of the council under this Act must apply
to the Minister under this Part.
(2) An application by
a council for the approval of the Minister to establish a subsidiary
must—
(a) be
in a form approved by the Minister; and
(b) be
accompanied by information required by the Minister; and
(c) be
accompanied by a copy of the proposed charter for the subsidiary (see
clause 3).
(3) A subsidiary comes
into existence if or when the Minister, by notice in the Gazette, signifies
his or her approval of the establishment of the subsidiary.
(4) The council must,
in conjunction with the publication of a notice under subclause (3),
ensure that a copy of the charter of the subsidiary is published in the
Gazette.
A subsidiary established under this Part—
(a) is a
body corporate; and
(b) has
the name assigned to it by its charter; and
(c) has
the powers, functions and duties specified in its charter; and
(d)
holds its property on behalf of the council.
3—Charter of subsidiary
(1) A charter must be
prepared for a subsidiary by the council.
(2) The charter must
address—
(a) the
purpose for which the subsidiary is established;
(b) the
constitution of a board of management as the subsidiary's governing body;
(c)
whether board members will be required to submit returns under Chapter 5 Part
4 Division 1 Subdivision 2;
(d) the
powers, functions and duties of the subsidiary;
(e) the
nature and scope of any activities that will be undertaken outside the area of
the council;
(f)
staffing issues, including whether the subsidiary may employ staff and, if so,
the process by which conditions of employment will be determined;
(g)
whether the subsidiary is intended to be partially or fully self-funding, and
other relevant arrangements relating to costs and funding;
(h) any
special accounting, internal auditing or financial systems or practices to be
established or observed by the subsidiary;
(i)
the acquisition or disposal of assets;
(j) the
manner in which surplus revenue is to be dealt with by the subsidiary;
(k) the
nature and scope of any investment which may be undertaken by the subsidiary;
(l) the
subsidiary's obligations to report on its operations, financial position and
other relevant issues;
(m)
other matters contemplated by this Part or prescribed by the regulations.
(3) The council may
include in the charter other matters that it considers to be appropriate.
(4) The charter may be
reviewed by the council at any time and must be reviewed by the council
whenever it is relevant to do so because of a review of the council's
strategic management plans.
(5) The council must,
if it amends a charter—
(a)
furnish a copy of the charter, as amended, to the Minister; and
(b)
ensure that a copy of the charter, as amended, is published on a website
determined by the chief executive officer; and
(c)
ensure that notice of the fact of the amendment and a website address at which
the charter is available for inspection is published in the Gazette.
4—Appointment of board of management
(1) Subject to the
charter of the subsidiary, the membership of a board of management of a
subsidiary will be determined by the council and may consist of, or include,
persons who are not members of the council.
(2) A board member
will be appointed by the council for a term, not exceeding 4 years, specified
in the instrument of appointment and, at the expiration of a term of office,
is eligible for reappointment.
(3) The office of
board member becomes vacant if the board member—
(a)
dies; or
(b)
completes a term of office and is not reappointed; or
(c)
resigns by written notice to the council; or
(d)
becomes a bankrupt or applies for the benefit of a law for the relief of
insolvent debtors; or
(e)
fails to submit a return for the purposes of a Register of Interests in
accordance with this Act if such returns are required by the charter; or
(f) is
removed from office by the council by written notice.
(4) A board member
must be appointed to chair meetings of the board of management.
(5) On the office of a
board member becoming vacant, a person may be appointed in accordance with
this clause to the vacant office.
(6) The council may
appoint a suitable person to be a deputy of a board member during a period of
absence of the board member and a reference in this Act to a board member will
be taken to include, unless the contrary intention appears, a reference to a
deputy while acting as a board member.
(7) If a member or
employee of the council is appointed as a board member, he or she is not to be
taken to have vacated his or her office as a member of the council, or of the
staff of the council or to have been invalidly appointed to the board of
management because—
(a) the
potential exists for the duties of the two offices to be in conflict; or
(b) the
duties of either office require, by implication, the person's full time
attention.
(8) The council may
give directions in relation to an actual or potential conflict of duty and
duty between offices held concurrently, or in relation to some other
incompatibility between offices held concurrently and, if the person concerned
complies with those directions, he or she is excused from any breach that
would otherwise have occurred.
5—Proceedings of board of management
(1) A quorum of a
board of management will be determined by the charter of the subsidiary.
(2) The board member
appointed to chair the board of management will preside at meetings of the
board of management at which he or she is present and, if that board member is
absent from a meeting, another board member chosen by the board members
present at the meeting will preside.
(3) A decision carried
by a majority of the votes cast by board members at a meeting is a decision of
the board of management.
(4) Each board member
present at a meeting of the board of management has one vote on a question
arising for decision and, if the votes are equal, the board member presiding
at the meeting may exercise a casting vote.
(5) A telephone or
video conference between board members will, for the purposes of this clause,
be taken to be a meeting of the board of management at which the participating
board members are present if—
(a)
notice of the conference is given to all board members in the manner
determined by the board of management for that purpose; and
(b) each
participating board member is capable of communicating with every other
participating board member during the conference.
(6) A proposed
resolution of the board of management becomes a valid decision of the board of
management despite the fact that it is not voted on at a meeting if—
(a)
notice of the proposed resolution is given to all board members in accordance
with procedures determined by the board of management; and
(b) a
majority of the board members express their concurrence in the proposed
resolution by letter, email or other written communication setting out the
terms of the resolution.
(7) Unless otherwise
determined by the charter of the subsidiary, Chapter 6 Part 3 extends to a
subsidiary as if—
(a) a
subsidiary were a council; and
(b) the
board members of the subsidiary were members of the council.
(8) A person
authorised in writing by the council for the purposes of this clause may
attend (but not participate in) a meeting of the board of management and may
have access to papers provided to board members for the purpose of the
meeting.
(9) If a board of
management considers that a matter dealt with at a meeting attended by a
representative of the council should be treated as confidential, the board of
management may advise the council of that opinion, giving the reason for the
opinion, and the council may, subject to subclause (10), act on that
advice as the council thinks fit.
(10) If the council is
satisfied on the basis of the board of management's advice under
subclause (9) that the subsidiary owes a duty of confidence in respect of
a matter, the council must ensure the observance of that duty in respect of
the matter, but this subclause does not prevent a disclosure as required in
the proper performance of the functions or duties of the council.
(11) The board of
management must cause accurate minutes to be kept of its proceedings.
(12) Subject to this
clause, and to a direction of the council, the board of management may
determine its own procedures.
6—Specific functions of board of management
(1) The board of
management of a subsidiary is responsible for the administration of the
affairs of the subsidiary.
(2) The board of
management of a subsidiary must ensure as far as practicable—
(a) that
the subsidiary observes all plans, targets, structures, systems and practices
required or applied to the subsidiary by the council; and
(b) that
all information furnished to the council is accurate; and
(c) that
the council is advised, as soon as practicable, of any material development
that affects the financial or operating capacity of the subsidiary or gives
rise to the expectation that the subsidiary may not be able to meet its debts
as and when they fall due.
(3) Anything done by
the board of management in the administration of the affairs of the subsidiary
is binding on the subsidiary.
7—Board members' duty of care etc
(1) A board member
must at all times act with reasonable care and diligence in the performance
and discharge of official functions and duties, and (without limiting the
effect of the foregoing) for that purpose—
(a) must
take reasonable steps to inform himself or herself about the subsidiary and
relevant aspects of the operations and activities of the council; and
(b) must
take reasonable steps through the processes of the board of management to
obtain sufficient information and advice about matters to be decided by the
board of management or pursuant to a delegation to enable him or her to make
conscientious and informed decisions; and
(c) must
exercise an active discretion with respect to all matters to be decided by the
board of management or pursuant to a delegation.
(2) A board member is
not bound to give continuous attention to the affairs of the subsidiary but is
required to exercise reasonable diligence in attendance at and preparation for
meetings of the board of management.
(3) In determining the
degree of care and diligence required to be exercised by a board member,
regard must be had to the skills, knowledge or acumen possessed by the
board member and the degree of risk involved in a particular circumstance.
(4) A board member
does not commit a breach of duty under this clause by acting in accordance
with a direction from the council.
(1) A subsidiary must,
in consultation with the council, prepare and adopt a business plan consistent
with its charter.
(2) A subsidiary and
the council must ensure that the first business plan of the subsidiary is
prepared within six months after the subsidiary is established.
(3) A business plan of
a subsidiary continues in force for the period specified in the plan or until
the earlier adoption by the subsidiary of a new business plan.
(4) A subsidiary must,
in consultation with the council, review its business plan on an annual basis.
(5) A subsidiary may,
after consultation with the council, amend its business plan at any time.
(6) A business plan
must set out or include—
(a) the
performance targets that the subsidiary is to pursue; and
(b) a
statement of the financial and other resources, and internal processes, that
will be required to achieve the subsidiary's performance targets; and
(c) the
performance measures that are to be used to monitor and assess performance
against targets.
(1) A subsidiary must
have a budget for each financial year.
(2) Each budget of a
subsidiary—
(a) must
deal with each principal activity of the subsidiary on a separate basis; and
(b) must
be consistent with its business plan and the council's strategic
management plans; and
(c) must
comply with standards and principles prescribed by the regulations; and
(d) must
be adopted after 31 May for the ensuing financial year, and before a date
fixed by the council; and
(e) must
be provided to the council in accordance with the regulations.
(3) A subsidiary may,
with the approval of the council, amend its adopted budget for a financial
year at any time before the year ends.
(4) A subsidiary may
incur, for a purpose of genuine emergency or hardship, spending that is not
authorised by its budget.
(5) A subsidiary may,
in a financial year, after consultation with the council, incur spending
before adoption of its budget for the year, but the spending must be provided
for in the appropriate budget for the year.
10—Subsidiary subject to direction by council
(1) A subsidiary is
subject to the direction and control of the council.
(2) A direction given
by the council under this clause must be in writing, and a copy of any
direction must be available at the principal office of the council.
(1) A subsidiary must,
at the request of the council, furnish to the council information or records
in the possession or control of the subsidiary as the council may require in
such manner and form as the council may require.
(2) If the board of
management of the subsidiary considers that information or a record furnished
under this clause contains matters that should be treated as confidential, the
board of management may advise the council of that opinion giving the reason
for the opinion and the council may, subject to subclause (3), act on
that advice as the council thinks fit.
(3) If the council is
satisfied on the basis of the board of management's advice that the subsidiary
owes duty of confidence in respect of a matter, the council must ensure the
observance of that duty in respect of the matter, but this subclause does not
prevent a disclosure as required in the proper performance of the functions or
duties of the council.
(1) A subsidiary must,
at the request of the council, report to the council on any matter, and on any
basis, specified by the council.
(2) A subsidiary must,
on or before a day determined by the council, furnish to the council a report
on the work and operations of the subsidiary for the preceding financial year.
(3) A report under
subclause (2) must—
(a)
incorporate the audited financial statements of the subsidiary for the
relevant financial year; and
(b)
contain any other information or report required by the council or prescribed
by the regulations.
(4) A report under
subclause (2) must be incorporated into the annual report of the council.
(1) A subsidiary must
establish and maintain effective auditing of its operations.
(2) A subsidiary must
establish an audit committee.
(3) Subject to the
regulations, an audit committee will comprise persons determined or approved
by the council (and may include persons who are members of the
relevant audit and risk committee).
(4) The functions of
an audit committee include—
(a)
reviewing annual financial statements to ensure that they provide a timely and
fair view of the state of affairs of the subsidiary; and
(b)
liaising with external auditors; and
(c)
reviewing the adequacy of the accounting, internal auditing, reporting and
other financial management systems and practices of the subsidiary on a
regular basis.
(1) Liabilities
incurred or assumed by a subsidiary are guaranteed by the council.
(2) A borrowing of a
subsidiary requires the approval of the council (which may be absolute or
conditional).
15—Principles of competitive neutrality
If a subsidiary is declared by its charter to be involved in a significant
business activity, the charter must also specify the extent to which the
principles of competitive neutrality 1 are to be applied to the activities of
the subsidiary and, to the extent that may be relevant, the reasons for any
non-application of these principles.
Note—
1 See Part 4 of the
Government Business Enterprises (Competition) Act 1996 .
(1) A subsidiary may
be wound up—
(a) by
the Minister acting at the request of the council; or
(b) by
the Minister on the ground that there has been a failure to comply with a
requirement of the Minister under section 275 and that the circumstances
are, in the opinion of the Minister, sufficiently serious to justify the
taking of action to wind up the subsidiary.
(2) A subsidiary is
wound up by the Minister publishing a notice in the Gazette.
(3) Any assets or
liabilities of the subsidiary at the time of winding-up vest in or attach to
the council on the winding-up.
Part 2—Regional subsidiaries established by two or more councils
17—Application for Ministerial approval
(1) Two or more
councils proposing to establish a regional subsidiary under this Act must
apply to the Minister under this Part.
(2) An application by
two or more councils for the approval of the Minister to establish a
regional subsidiary must—
(a) be
in a form approved by the Minister; and
(b) be
accompanied by information required by the Minister; and
(c) be
accompanied by a copy of the proposed charter for the subsidiary (see
clause 19).
(3) A subsidiary comes
into existence if or when the Minister, by notice in the Gazette, signifies
his or her approval of the establishment of the subsidiary.
(4) The
constituent councils must, in conjunction with the publication of a notice
under subclause (3), ensure that a copy of the charter of the subsidiary
is published in the Gazette.
A regional subsidiary established under this Part—
(a) is a
body corporate; and
(b) has
the name assigned to it by its charter; and
(c) has
the powers, functions and duties specified in its charter; and
(d)
holds its property on behalf of the constituent councils.
(1) A charter must be
prepared for a regional subsidiary by the constituent councils.
(2) The charter must
address—
(a) the
purpose for which the subsidiary is established;
(b) the
constitution of a board of management as the subsidiary's governing body and,
in respect of the board of management—
(i)
the method by which board members will be appointed, and
their terms of office determined;
(ii)
the conditions of appointment, or the method by which
those conditions will be determined;
(iii)
the appointment of a board member to chair meetings;
(iv)
the appointment of deputies to board members;
(c)
whether board members will be required to submit returns under Chapter 5 Part
4 Division 1 Subdivision 2;
(d) the
powers, functions and duties of the subsidiary;
(e) the
nature and scope of any activities that will be undertaken outside the area of
the constituent councils;
(f)
staffing issues, including whether the subsidiary may employ staff and, if so,
the process by which conditions of employment will be determined;
(g)
whether the subsidiary is intended to be partially or fully self-funding, or
to have the ability to raise revenue, and other relevant arrangements relating
to costs and funding, including the financial contributions to be made by the
constituent councils;
(h) any
special accounting, internal auditing or financial systems or practices to be
established or observed by the subsidiary;
(i)
the acquisition or disposal of assets;
(j) the
manner in which surplus revenue is to be dealt with by the subsidiary;
(k) the
nature and scope of any investment which may be undertaken by the subsidiary;
(l) the
subsidiary's obligations to report on its operations, financial position and
other relevant issues, and processes for other forms of reporting to the
constituent councils;
(m) the
process or mechanism by which the subsidiary will be subject to direction by
the constituent councils;
(n) the
manner in which disputes between the constituent councils relating to the
subsidiary will be resolved;
(o)
issues surrounding a council becoming a constituent council, or ceasing to be
a constituent council;
(p) the
manner in which the property of the subsidiary is to be distributed in the
event of a winding up;
(q) the
proportions in which the constituent councils are to be responsible for the
liabilities of the subsidiary in the event of its insolvency;
(r)
other matters contemplated by this Part or prescribed by the regulations.
(3) The
constituent councils may include in the charter other matters that the
councils consider to be appropriate.
(4) The charter may be
reviewed by the constituent councils at any time but must in any event be
reviewed at least once in every 4 years.
(5) The
constituent councils must, if they amend a charter—
(a)
furnish a copy of the charter, as amended, to the Minister; and
(b)
ensure that a copy of the charter, as amended, is published on a website (or
websites) determined by the chief executive officers of the
constituent councils; and
(c)
ensure that a notice of the fact of the amendment and a website address at
which the charter is available for inspection is published in the Gazette.
20—Appointment of board of management
(1) Subject to the
charter of the subsidiary, the membership of a board of management of a
regional subsidiary will be determined by the constituent councils and may
consist of, or include, persons who are not members of a council.
(2) A board member is,
at the expiration of a term of office, eligible for reappointment.
(3) The office of
board member becomes vacant if the board member—
(a)
dies; or
(b)
completes a term of office and is not reappointed; or
(c)
resigns by written notice addressed to the constituent councils and served on
any of them; or
(d)
becomes a bankrupt or applies for the benefit of a law for the relief of
insolvent debtors; or
(e)
fails to submit a return for the purposes of a Register of Interests in
accordance with this Act if such returns are required by the charter; or
(f) is
removed from office by the constituent councils by written notice, or in any
other manner specified by the charter.
(4) On the office of a
board member becoming vacant, a person may be appointed in accordance with the
charter to the vacant office.
(5) A reference in
this Act to a board member will be taken to include, unless the contrary
intention appears, a reference to a deputy while acting as a board member.
(6) If a member or
employee of a constituent council is appointed as a board member, he or she is
not taken to have vacated his or her office as a member of the council, or of
the staff of the council, or to have been invalidly appointed to the board of
management because—
(a) the
potential exists for the duties of the two offices to conflict; or
(b) the
duties of either office require, by implication, the person's full time
attention.
(7) A council may give
directions in relation to an actual or potential conflict of duty and duty
between offices held concurrently, or in relation to some other
incompatibility and, if the person concerned complies with those directions,
he or she is excused from any breach that would otherwise have occurred.
21—Proceedings of board of management
(1) A quorum of a
board of management will be determined by the charter of the subsidiary.
(2) The board member
appointed to chair the board of management will preside at meetings of the
board of management at which he or she is present and, if that board member is
absent from a meeting, another board member chosen by the board members
present at the meeting will preside.
(3) A decision carried
by a majority of the votes cast by board members at a meeting is a decision of
the board of management.
(4) Each board member
present at a meeting of the board of management has one vote on a question
arising for decision and, if the votes are equal, the board member presiding
at the meeting does not have a second or casting vote.
(5) A telephone or
video conference between board members will, for the purposes of this clause,
be taken to be a meeting of the board of management at which the participating
board members are present if—
(a)
notice of the conference is given to all board members in the manner
determined by the board of management for that purpose; and
(b) each
participating board member is capable of communicating with every other
participating board member during the conference.
(6) A proposed
resolution of the board of management becomes a valid decision of the board of
management despite the fact that it is not voted on at a meeting if—
(a)
notice of the proposed resolution is given to all board members in accordance
with procedures determined by the board of management; and
(b) a
majority of the board members express their concurrence in the proposed
resolution by letter, email or other written communication setting out the
terms of the resolution.
(7) Unless otherwise
determined by the charter of the subsidiary, Chapter 6 Part 3 extends to a
subsidiary as if—
(a) a
subsidiary were a council; and
(b) the
board members of the subsidiary were members of the council.
(8) A person
authorised in writing by a constituent council for the purposes of this clause
may attend (but not participate in) a meeting of the board of management and
may have access to papers provided to board members for the purpose of the
meeting.
(9) If a board of
management considers that a matter dealt with at a meeting attended by a
representative of a constituent council should be treated as confidential, the
board of management may advise the council of that opinion, giving the reason
for the opinion, and the council may, subject to subclause (10), act on
that advice as the council thinks fit.
(10) If a council is
satisfied on the basis of the board of management's advice under
subclause (9) that the subsidiary owes a duty of confidence in respect of
a matter, the council must ensure the observance of that duty in respect of
the matter, but this subclause does not prevent a disclosure as required in
the proper performance of the functions or duties of the council.
(11) The board of
management must cause accurate minutes to be kept of its proceedings.
(12) Subject to this
clause, and to a direction of the constituent councils, the board of
management may determine its own procedures.
22—Specific functions of board of management
(1) The board of
management of a regional subsidiary is responsible for the administration of
the affairs of the subsidiary.
(2) The board of
management of a regional subsidiary must ensure as far as practicable—
(a) that
the subsidiary observes all plans, targets, structures, systems and practices
required or applied to the subsidiary by the constituent councils; and
(b) that
all information furnished to a constituent council is accurate; and
(c) that
the constituent councils are advised, as soon as practicable, of any material
development that affects the financial or operating capacity of the subsidiary
or gives rise to the expectation that the subsidiary may not be able to meet
its debts as and when they fall due.
(3) Anything done by
the board of management in the administration of the affairs of the subsidiary
is binding on the subsidiary.
23—Board members' duty of care etc
(1) A board member
must at all times act with reasonable care and diligence in the performance
and discharge of official functions and duties, and (without limiting the
effect of the foregoing) for that purpose—
(a) must
take reasonable steps to inform himself or herself about the subsidiary and
relevant aspects of the operations and activities of the constituent councils;
and
(b) must
take reasonable steps through the processes of the board of management to
obtain sufficient information and advice about matters to be decided by the
board of management or pursuant to a delegation to enable him or her to make
conscientious and informed decisions; and
(c) must
exercise an active discretion with respect to all matters to be decided by the
board of management or pursuant to a delegation.
(2) A board member is
not bound to give continuous attention to the affairs of the subsidiary but is
required to exercise reasonable diligence in attendance at and preparation for
meetings of the board of management.
(3) In determining the
degree of care and diligence required to be exercised by a board member,
regard must be had to the skills, knowledge or acumen possessed by the
board member and the degree of risk involved in a particular circumstance.
(4) A board member
does not commit a breach of duty under this clause by acting in accordance
with a direction from the constituent councils.
(1) A
regional subsidiary must, in consultation with the constituent councils,
prepare and adopt a business plan.
(2) A subsidiary and
the constituent councils must ensure that the first business plan of the
subsidiary is prepared within six months after the subsidiary is established.
(3) A business plan of
a subsidiary continues in force for the period specified in the plan or until
the earlier adoption by the subsidiary of a new business plan.
(4) A subsidiary must,
in consultation with the constituent councils, review its business plan on an
annual basis.
(5) A subsidiary may,
after consultation with the constituent councils, amend its business plan at
any time.
(6) A business plan
must set out or include—
(a) the
performance targets that the subsidiary is to pursue; and
(b) a
statement of the financial and other resources, and internal processes, that
will be required to achieve the subsidiary's performance targets; and
(c) the
performance measures that are to be used to monitor and assess performance
against targets.
(1) A
regional subsidiary must have a budget for each financial year.
(2) Each budget of a
subsidiary—
(a) must
deal with each principal activity of the subsidiary on a separate basis; and
(b) must
be consistent with its business plan; and
(c) must
comply with standards and principles prescribed by the regulations; and
(d) must
be adopted after 31 May for the ensuing financial year, and before a date
fixed by the constituent councils; and
(e) must
be provided to the constituent councils in accordance with the regulations.
(3) A subsidiary may,
with the approval of the constituent councils, amend its adopted budget for a
financial year at any time before the year ends.
(4) A subsidiary may
incur, for a purpose of genuine emergency or hardship, spending that is not
authorised by its budget.
(5) A subsidiary may,
in a financial year, after consultation with the constituent councils, incur
spending before adoption of its budget for the year, but the spending must be
provided for in the appropriate budget for the year.
26—Subsidiary subject to direction by councils
A regional subsidiary is subject to the joint direction and control of the
constituent councils.
(1) A
regional subsidiary must, at the written request of a constituent council,
furnish to the council information or records in the possession or control of
the subsidiary as the council may require in such manner and form as the
council may require.
(2) If the board of
management of the subsidiary considers that information or a record furnished
under this clause contains matters that should be treated as confidential, the
board of management may advise the council of that opinion giving the reason
for the opinion and the council may, subject to subclause (3), act on
that advice as the council thinks fit.
(3) If the council is
satisfied on the basis of the board of management's advice that the subsidiary
owes a duty of confidence in respect of a matter, the council must ensure the
observance of that duty in respect of the matter, but this subclause does not
prevent a disclosure as required in the proper performance of the functions or
duties of the council.
(1) A regional
subsidiary must, on or before a day determined by the constituent councils,
furnish to the constituent councils a report on the work and operations of the
subsidiary for the preceding financial year.
(2) A report under
subclause (1) must—
(a)
incorporate the audited financial statements of the subsidiary for the
relevant financial year; and
(b)
contain any other information or report required by the council or prescribed
by the regulations.
(3) A report under
subclause (1) must be incorporated into the annual report of each
constituent council.
29—Council becoming or ceasing as a constituent council
A council may, in accordance with the charter of the subsidiary and with the
approval of the Minister—
(a)
become a constituent council of a regional subsidiary;
(b)
cease to be a constituent council of a regional subsidiary.
(1) A
regional subsidiary must establish and maintain effective auditing of its
operations.
(2) A
regional subsidiary must, unless exempted by regulation, establish an audit
committee.
(3) Subject to the
regulations, an audit committee will comprise persons determined or approved
by the constituent councils (and may include persons who are members of a
regional audit and risk committee established by any of the
constituent councils (with 1 or more other councils, whether constituent
councils or otherwise) or a council audit and risk committee established by
any of the constituent councils).
(4) The functions of
an audit committee include—
(a)
reviewing annual financial statements to ensure that they provide a timely and
fair view of the state of affairs of the subsidiary; and
(b)
liaising with external auditors; and
(c)
reviewing the adequacy of the accounting, internal auditing, reporting and
other financial management systems and practices of the subsidiary on a
regular basis.
(1) Liabilities
incurred or assumed by a regional subsidiary are guaranteed by the
constituent councils.
32—Principles of competitive neutrality
If a regional subsidiary is declared by its charter to be involved in a
significant business activity, the charter must also specify the extent to
which the principles of competitive neutrality 1 are to be applied to the
activities of the subsidiary and, to the extent that may be relevant, the
reasons for any non-application of these principles.
Note—
1 See Part 4 of the
Government Business Enterprises (Competition) Act 1996 .
(1) A
regional subsidiary may be wound up—
(a) by
the Minister acting at the request of the constituent councils; or
(b) by
the Minister on the ground that there has been a failure to comply with a
requirement of the Minister under section 275 and that the circumstances
are, in the opinion of the Minister, sufficiently serious to justify the
taking of action to wind up the subsidiary.
(2) A subsidiary is
wound up by the Minister publishing a notice in the Gazette.
(3) Any assets or
liabilities of the subsidiary at the time of winding-up vest in or attach to
the constituent councils on the winding-up in accordance with the charter.
Part 3—Common matters
34—Board members' duties of honesty
(1) A board member of
a subsidiary must at all times act honestly in the performance and discharge
of official functions and duties.
(2) A board member or
former board member of a subsidiary must not, whether within or outside the
State, make improper use of information acquired by virtue of his or her
position as a board member to gain, directly or indirectly, an advantage for
himself or herself or for another person or to cause detriment to the
subsidiary or a council.
(3) A board member of
a subsidiary must not, whether within or outside the State, make improper use
of his or her position as a board member to gain, directly or indirectly, an
advantage for himself or herself or for another person or to cause detriment
to the subsidiary or a council.
(1) If a subsidiary
discloses to a person in pursuance of this Schedule a matter in respect of
which the subsidiary owes a duty of confidence, the subsidiary must give
notice of the disclosure to the person to whom the duty is owed.
(2) A member of the
board of management of a subsidiary does not commit a breach of duty by
reporting a matter relating to the affairs of the subsidiary to a council or
otherwise in accordance with the provisions of this Act.
(1) A subsidiary may
delegate a power or function vested or conferred under this or another Act.
(2) A delegation may
be made—
(a) to a
committee; or
(b) to
an employee of the subsidiary or of the council or of a constituent council;
or
(c) to a
person for the time being occupying a particular office or position.
(3) A
delegation—
(a) is
subject to conditions and limitations determined by the subsidiary or
specified by the regulations; and
(b) is
revocable at will and does not prevent the subsidiary from acting in a matter.
(4) This clause does
not limit or affect a power of delegation under another Act.
37—Common seal and execution of documents
(1) The common seal of
a subsidiary must not be affixed to a document except in pursuance of a
decision of the board of management, and the affixing of the seal must be
attested by the signatures of two board members.
(2) The board of
management may, by instrument under the common seal of the subsidiary,
authorise a board member, or other person (whether nominated by name or by
office or title) to execute documents on behalf of the subsidiary subject and
limitations (if any) specified in the instrument of authority.
(3) Without limiting
subclause (2), an authority may be given so as to authorise two or more
persons to execute documents jointly on behalf of the subsidiary.
(4) A document is duly
executed by the subsidiary if—
(a) the
common seal of the subsidiary is affixed to the document in accordance with
this clause; or
(b) the
document is signed on behalf of the subsidiary by a person or persons in
accordance with authority conferred under this clause.
(1) No civil liability
attaches to a board member of a subsidiary for an honest act or omission in
the exercise, performance or discharge, or purported exercise, performance or
discharge, of the member's or subsidiary's powers, functions or duties.
(2) A liability that
would, but for this clause, attach to a board member attaches instead to the
subsidiary.
(1) A subsidiary must
not—
(a)
participate in the formation of a company; or
(b)
acquire shares in a company.
(2) However,
subclause (1) does not limit—
(a) the
investment of money as authorised by the subsidiary's charter; or
(b) the
ability of a regional subsidiary to participate in the formation of, or to
become a member of, a company limited by guarantee established as a national
association to promote and advance the interests of an industry in which local
government has an interest.
No act or proceeding of a subsidiary is invalid by reason of—
(a) a
vacancy or vacancies in the membership of the board of management; or
(b) a
defect in the appointment of a board member.