17 June 2010
When standing for election as Treasury Minister, Senator Philip Ozouf promised to undertake a comprehensive review of the management of States-owned utility companies, which represent millions of pounds worth of public assets. He commissioned Deloitte to do the work and is now publishing the results of that review.
Deloitte’s report sets out a number of recommendations to strengthen the Treasury’s oversight of the 4 utility companies, to improve governance and to enhance communication between the Treasury and the companies. It also advises on setting up an appropriate shareholder model which meets international best practice.
Senator Ozouf said “This review sets out a number of recommendations for improving the oversight of these valuable public assets. I will be implementing some of the recommendations immediately and will set out a timetable for considering and carrying out the remaining suggestions.”
The review recommends that the Treasury Minister strengthen oversight by engaging a dedicated, experienced professional to oversee engagement with all companies which are wholly or part-owned by the States.
It proposes that a formal and transparent framework should be set up for this engagement, with a clear demarcation of respective roles and responsibilities. It makes clear the necessity to retain the accountability and independence of the utility boards.
While these new Shareholder Executive arrangements will ensure the role of Chairman is not undermined, they put in place stronger oversight to maximise the benefits of public ownership.
The review makes a number of other recommendations. For instance, it proposes that:
- the boards should adopt the governance standard for UK listed companies and the Treasury should consider and challenge any non-compliance with the code
- the Treasury should have a role in appointing the chairman of each board and in overseeing the board’s composition
- the Treasury should set and agree the objectives and strategies for Jersey Telecom and Jersey Post
- the Treasury should engage with Jersey Water and Jersey Electricity to communicate its objectives as shareholder
Senator Ozouf added “If the proposal to set up a States of Jersey Development Company is approved by the Assembly, all the provisions in this report will apply to the newly formed company. That includes the annual approval of all directors’ remuneration and Treasury involvement in appointing directors.”
States of Jersey Owned Utilities Governance Review
gov.je