Elected members of Swindon Borough Council will, eventually, not be asked, or allowed to sit as directors of the private companies that the council owns.

There are eight such companies that are wholly owned by the council. Three run solar farms around the borough, and three are variations of the authority’s housing development company.

The other two are Public Power Solutions and Steam Museum.

There are councillors who also have responsibilities as directors of two of the three solar farms and all three of the housing companies - none of them are members of cabinet.

But, as a report to the council’s audio committee, which will meet on Tuesday, says, holding a directorship could still put those members in a difficult position

A director of a company owes a fiduciary duty to the company. Essentially, a director must put the interest of the company first.

This may in some circumstances result in a conflict of interest between the best interest for the company and the best interest for the council. For example in the determination of the sale value of council-owned property proposed to be disposed of to a company.

The report states: “In such circumstances, the director cannot choose whether he will make decisions in respect of the council interest or the company interest; he or she must always put the company interest first.

“This has the potential for a conflict of interest for that member director if that member is part of the decision-making at the council, for example, if a member of a cabinet or another decision-making committee.”

The report outlines the differences between having senior council officers sit as directors of the council’s companies, and members.

It continues: “Where officers are engaged as directors there can be dispensation given to them accepting that, when discharging their duties as directors, they may have to make decisions which are not in the best interests of the council but that they are free to make those decisions.

“The same sort of dispensation cannot be given to members. As elected office holders, members are always expected to act in the best interests of the council and the residents of the borough.”

The report recommends that current directors are not replaced immediately, but that there should be a move to appointing officers instead of members as directors of companies in the long term.

The audit committee meets at 6pm on Tuesday  November 26 at the Civic Offices in Euclid Street.

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