Future of local governance

Good governance in local authorities is essential to the delivery of effective services and outcomes that benefit all New Zealanders. The Future for Local Government draft report acknowledges the critical role local government plays in New Zealand’s governance and in building strong, healthy and prosperous communities.

In our submission we reinforced four key elements of local governance:

1. The critical roles council-controlled organisations and non-elected directors play in local governance
2. System agility is facilitated by board/governance agility
3. Support for enhanced capability and professional development of elected members as well as independent members and directors appointed by local authorities
4. Support for a four-year electoral term (consistent with central government proposal)

Dame Kerry Prendergast, former Mayor of Wellington and an experienced director and board member for many high-profile organisations which have included the Environmental Protection Agency, Tourism New Zealand, The Conservation Authority, and the New Zealand Film Commission, and now chairs others, provided her views.

For Kerry, governance is a journey combining experience, training and mentoring. Her own journey started when her children were young, first joining the local Plunket committee. After gaining “a huge amount of governance experience on a range of community organisations” she stood for Tawa Borough Council in 1986. Now, in her view, some people arrive with minimal governance experience.

After the 1989 amalgamation of Tawa and Wellington she became a Wellington City councillor, and then deputy mayor from 1995 to 2001. She continued working as a midwife and volunteer grief counsellor while raising a family and being on council. That was until 2001, when she became Wellington’s mayor, serving for three terms until 2010.

Critical roles council-controlled organisations and non-elected directors play in local governance

Kerry says, influenced by her considerable governance experience, during her time as mayor she set up a lot of council-controlled organisations (CCOs). “I didn’t believe that we, as elected officials, had the necessary skills to run specialist areas such as a zoo, art gallery, museum, airport, or port.”

Her two main reasons for setting up CCOs were:

• To ensure you had the right governance skill set.
• To provide access to additional funding.

“Local government is less likely to get financial support than a charitable trust, so it opened doors to funding that we wouldn’t otherwise get. But the key objective was being able to get the right people with the right skills sitting around the board table.”

Most local authorities use holding companies, subsidiary companies or other entities such as trusts to conduct commercial and non-commercial activities on their behalf.

Wellington City Council used a mixed governance model with at least one elected member sitting on each CCO providing a conduit to council’s vision and strategic objectives, while also providing councillors with further governance experience.

System agility is facilitated by board/governance agility

Good governance, whether of a CCO or any other organisation, is reliant on many factors. Among the most important are an organisation’s purpose (so a board can put in place a relevant strategic plan), the character of the directors (ethical, intelligent, diverse and collaborative directors positively influence the best boards), and the quality of the relationships between board and management; and board and stakeholders or shareholders (for CCOs that is the local authority/ies and their communities).

Kerry used these same principles around the council table – agreeing on a shared vision, setting the strategy, and determining the objectives to deliver on the strategy. She says that strategic direction can be missing as councils focus on the Local Government Act that required deliverables such as the long-term plan; but these are budget focused and frequently lack an overarching strategic direction.

“Once you’ve set your vision and strategy, you can then look at what infrastructure and services you need to deliver on it. But elected members need to be agile and flexible. The world changes so your vision needs to be reviewed and possibly changed also.”

Support for enhanced capability and professional development of elected members as well as independent members and directors appointed by local authorities

The Future for Local Government draft report raises the question of mandatory professional development for elected members as has been adopted in most states in Australia. Currently, a large proportion of councils have limited or no training budget for elected members. Accordingly, induction (and ongoing) training is often provided by staff and/or related solely to local government processes, project updates, and legislative requirements.

“It’s essential that elected members are given governance training,” says Kerry. “Governance is a skill. While local government is attracting a more diverse group of politicians, they don’t necessarily have the depth of governance knowledge and experience that the role demands.”

Support for a four-year electoral term

The first year someone is elected is very much about learning, the second year is focused on delivering, but with elections every three years, Kerry says that elected members’ focus can quickly turn to elections and electioneering.

Consequently, she has continued to lobby for a four-year election cycle.

“Councils would achieve so much more with four year terms. Sometimes they barely get to dip their toes in, and are in a position to make courageous decisions, when it is time for another election.”

It is likely central government will make this change only when it changes its own term to four years. 

Dame Kerry Prendergast

Dame Kerry Prendergast is the former Mayor of Wellington and former Vice-President of Local Government New Zealand and holds an MBA from Victoria University. She is a distinguished alumnus of Victoria University of Wellington and a Chartered Member of the Institute of Directors.

Kerry is currently Chair of Wellington Free Ambulance, Wellington Opera, The Victoria University Foundation, and the Royal New Zealand Ballet. 

She is a Director of Oceania Healthcare, Fish Serve and a Trustee of the Wellington International Arts Foundation, Capital Kiwi, and the New Zealand Community Trust. 

In January 2019 Kerry became a Dame Companion (DNZM) for services to governance and the community, after being awarded a CNZM in 2011 for her services to local government. In July 2016 Kerry was also awarded a Lifetime Excellence Award for Outstanding Contribution to Local Government.