Wembley Matters recently drew attention to the Brent Council Internal Audit that found a possible conflict of interest in the directorships of Brent's housing companies First Wave Housing and i4B Holdings. See LINK. Wembley Matters drew attention to the role of the councillor director Saqib Butt, who is the brother of the Leader of Brent Council as well as Brent Council officers.
Brent Council responded to the Audit: Management Response: We will review job descriptions to identify and mitigate conflicts of interest.
The Internal Audit found 5 medium risks the first of which said:
Responsibilities for Council employees working for the companies: The management and two of the five directors of the companies are employed by the Council and line managed within the Council. This may create a conflict of interest as management may feel they need to represent the interests of the Council rather than the companies. These responsibilities need to be clarified to ensure that these conflicts are effectively managed, and the companies are robustly represented in disputes with the Council.
Proposed changes to the Board membership and governance arrangements for both companies are tabled for Cabinet on September 12th. The officer's report makes no mention of resolving the potential conflict of interest and merely substitutes one Brent Council officer, Phil Porter, Corporate Director for Adult Social Care, for another, Gail Tolley, who steps down from the boards following her retirement as Strategic Director for Children and Young People.
The Independent Chair, Martin Smith's and Independent Non-executive Director. Akimntoye's terms of office are recommended to be extended for another 3 years.
As Peter Gadson, Corporate Director, Residents Srrvices stays on the board, it means that three of the five directors are either Brent employees or a Brent councillor.
No mention is made of the Council's promise to review job descriptions and mitigate conflicts of interest. Instead the Cabinet's overall control of both companies is emphasised:
As sole Shareholder for i4B and the sole Guarantor for FWH, the Council has an important role in providing strategic direction for the companies and retains control of key decisions. Cabinet is the strategic supervisory body with ultimate responsibility for ensuring governance of the companies and the power to appoint and dismiss Directors and the Company Secretary are reserved to Cabinet. Cabinet therefore has the power to agree the Recommendations contained in this report
Fiduciary responsibility is a serious matter. The question must be asked as to why Brent is using corporate shells to hold council assets. It is less transparent and creates opportunities for mismanagement and secret agendas
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