10.5 The public sector body will need to consider how best to monitor the ongoing activities of the JV. In all cases designated individuals within the public sector body should be responsible for the review of business plans, budgets and financial information regarding the ongoing activities of the JV. These individuals should not be directly involved with the day to day operations of the JV or act as directors of the JV. In addition mechanisms should be put in place so that matters requiring its approval as a participant can be dealt with expeditiously.
10.6 It is important to consider the governance arrangements that should be put in place to provide control and protection, particularly when the JV is at least partly funded or otherwise supported by the public purse. These should be established to minimise the risk of conflict of interest and give reassurance to key public sector stakeholders over the propriety of the JV arrangements. Examples of such arrangements include non-executive steering groups, advisory councils, audit committees, remuneration committees, etc. Reference to the Turnbull Report82 should be made for further guidance on corporate governance.
10.7 Responsibility for the supervision and management of the JV and its business lies with the JV's Board (or partnership equivalent), except for those matters which UK company law requires to be decided by participants or which the JV has reserved for its participants. Limited Liability Partnerships (LLPs) can be created to have similar management/executive structures to the corporate ones described in this Chapter. Limited Partnerships (LPs), with a single managing partner who manages the business, will be structured differently.
10.8 A decision will need to be made as to whether the Board is to be actively involved in the managerial decisions of the JV or operating in a more strategic/supervisory role. The outcome of this decision will influence the composition and structure of the Board. If the Board is to have an active executive role, then it should need to include individuals with the appropriate skills. If however the board is to have a supervisory role, reviewing overall strategy and key decisions, it will consist mainly of representatives of the participants. An executive management committee may need to be established to whom the supervisory Board can delegate conduct for the day-to-day running of the JV.
10.9 Ideally, the chairman should be selected on the basis of executive managerial experience, knowledge of the business and associated market, leadership, and an appreciation of the participants' original motivations for starting the JV. This role is key, as he/she may have to resolve major disputes (i.e. the future direction of the JV), and guide the management team through difficult times.
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82 Combined Code on Corporate Governance. See www.icaew.com/index.cfm/route/149390/icaew_ga/en/Technical_amp_Business_Topics/Topics/Law_and_regulation/FRC_Combined_Code_on_Corporate_Governance.