The government has moved to address accountability concerns by enshrining in the Auckland legislation additional accountability arrangements for Auckland’s council-controlled organisations (CCOs), in particular public meetings. But what is the overall effect of the existing and new requirements?
Statement of Intent and Reporting Requirements
The statement of intent is a critical component of accountability, further enhanced by an account-giving public forum to focus on the statement of intent contents. However, the requirement for a CCO to hold a public meeting that will include a focus on performance targets (and ultimately a public meeting to report on performance against those targets), may encourage the CCO to sign up for targets that they already know are achievable. This may negate some of the gains that are expected from entities designed to operate within a strong commercial framework and perform against bold targets. In reality, the desire to avoid failure and damage to professional reputation is likely to drive that behaviour regardless of public meetings.
The reporting requirements appear to provide sufficient accountability, ensuring council has adequate information. There is also an appropriate account-giving forum enabled by the public meeting requirement. Best practice suggests that Auckland Council should also put in place quarterly reporting which will provide an additional means to not only hold the CCO to account but to adjust their behaviour in the right direction before there are any significant impacts on the long-term goals of the council.
Public Meetings
While public meetings are intrinsically positive, care needs to be taken that these do not become overly formulaic and focused on complying with the legislation rather than genuinely engaging with the community. It will be important to encourage CCOs to take the opportunity that the meetings provide but this will require cultural change and bring challenges of its own. For example, how will the CCO respond if the wishes of the community are in conflict with the council? Will that result in perverse outcomes with the 
CCO trying to please the vocal community rather than the council?
During the mayoral campaign for the 2010 local government elections, leading candidates John Banks and Len Brown both stated that they wanted to go further than the government’s public meeting requirements in strengthening their accountability and openness. Electioneering included promises to require CCOs to publish their agendas and make all meetings open to the public. There is no reason why they should not “operate under the public glare”.[1]
There is real potential that the issues that arise in the meetings will slow down the decision making process. The CCO will be obliged to consider the public comments which may result in some deferral of decisions. It may also be obliged to justify a decision that appears to go against the mood of the public meeting. This process represents a very real challenge for CCOs that are charged with operating in a commercial environment including the ability to take decisive action as appropriate. Further analysis should be undertaken therefore to identify the potential impacts on a CCO’s ability to meet its objectives if all meetings are open to the public.
Sanctions
Of all the criteria that Bovens uses in his accountability framework, sanctions or consequences do not appear to be provided for to any
great degree in the three accountability arrangements. The only sanctions appear to be the ability for the council to remove CCO directors at any time, and in a slightly more tenuous way, the ability for the public to speak at CCO meetings without reprisal. These sanctions are weak given Auckland Council has not appointed the initial CCO directors and while that does not prevent the council from removing them, it is unlikely it would want to jeopardise relationships in the very early stages of this new governance arrangement by taking such a radical step. For future appointments, the council will have the opportunity to question prospective directors on their intentions and make it clear what is expected of them. It is important to remember, however, that it is not possible to legislate for relationships – if there is a will to make it work, it will work.
Unelected Board Members
CCOs are set up to apply commercial disciplines to the delivery of council activities. The assumption in setting up a CCO is that it can deliver those activities more efficiently and effectively than the council, but it is the council that is ultimately accountable for the performance of the CCO. With the focus on accountability arrangements such as public meetings, this may constrain the CCO’s ability to deliver on its objectives and act as a disincentive to an appropriately skilled person taking a directorship on a CCO.
[1] Orsman, http://www.nzherald.co.nz/news/print.cfm?objectid=10671594