DATE: |
14
April 2008 |
TITLE: |
FNHL
- Questions and Answers
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Why
is the council restructuring FNHL?
The restructuring is driven by the need for clear separation of governance
and management roles within the company, combined with a former director’s
stated intention that he did not wish to renew his contract.
It was timely and some would say, overdue.
Was there dissatisfaction with the performance of FNHL?
The contribution of the former Chair and director is acknowledged and
they have been thanked for their work. The former Chair will remain
with the company in a management role, which can be seen as a sign of
confidence in his ability.
However the company has been dogged by public criticism and negative
publicity about the way in which it has interacted with residents and
ratepayers, the perception that it has often acted behind closed doors,
governance and financial performance.
It is hoped the restructuring will lessen this negativity.
Why will FNHL be any different now?
There is now a Chair and two directors, compared with the former structure
of a Chair, who was also a manager of the company, and one director.
It is considered that this will allow for more robust debate and greater
transparency.
Also, it is expected the company will operate along the lines of an
SOE with the same lines of financial accountability.
In addition, there will be a formal business plan and a requirement
for the company to meet its corporate social responsibility.
Most of these performance measures were not previously in place.
What benefits will be evident to ratepayers?
Improved performance, more informed reporting, increased monitoring
and clear and open lines of communication between the company, the council
and residents and ratepayers.
The new directors are from the west, east and south of the district
so that residents and ratepayers have better geographic representation
than previously existed.
Where to from here?
The new directors will review existing FNHL operations and make their
recommendations to the council. It is expected the company will be run
along the lines of a State Owned Enterprise with requirements to fix
a dividend policy; fix a debt to equity ratio; and provide a return
on investment at least equal to weighted average cost of capital. The
company will also need to develop a business plan and a Statement of
Corporate Social responsibility requiring it to take into the account
the public good.
For further information please
contact:-
Alison Lees
Communications Manager
Far North District Council
0800 920 029
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Page created/updated: 14 April, 2008
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