Agenda item

Report of the Town Clerk

The Committee considered a report of the Town Clerk presenting a resolution of the Bridge House Estates Board at its meeting on 4 May 2021. The Town Clerk introduced the item and gave Members some further context in respect of the resolution to Investment Committee.

The Managing Director of Bridge House Estates (BHE) then advised that the BHE Board had agreed as a priority to proactively seek advice and draw on the expertise of other Committees, with a healthy dialogue on important matters, in order to facilitate business as usual and inform the Board’s decision-making, pending further deliberations regarding the BHE Board’s governance.

A Member noted that the resolution could be more specific in distinguishing between advice in respect of investment strategy and advice in respect of specific investments, and suggested that the Committee delegate advisory roles relating to property and non-property investments to the Property Investment Board and Financial Investment Board respectively, as they met more frequently than the Grand Committee. The Chair endorsed the proposal to delegate to the Boards, adding that it was difficult to justify setting up new or parallel bodies at this time.

A Member commented that the Committee, in conjunction with the Investment and BHE Boards, should begin to consider the longer-term arrangements for managing investments, particularly BHE investments, and suggested that the BHE Board be encouraged to make recommendations with a view to reaching a consensus on what should happen. The Member added that the likelihood that a Pensions Committee would need to be established in due course would also need to be taken into account as part of the longer-term arrangements.

Members further commented that the resolution was an appropriate first step and should be agreed, and that strategic and management matters could be separated out if necessary. A Member noted that the Boards could not advise on the weightings between property and non-property investments. The Chair added that the Committee had an advisory role on this under the existing arrangements, as decisions on asset allocation were reserved to the Resource Allocation Sub Committee, although this function had not been exercised for some time.

A Member advised that the wider review of BHE pre-dated the Lisvane Review, and that this was a measure that would contribute towards the outcome of both pieces of work, which should be supported. The Member added that with the Lisvane Review still in progress, Members should keep options open for the longer-term arrangements as there were a number of matters still to be resolved as part of the Lisvane Review which may have an impact on them.

A Member suggested that the appointment of a Chief Investment Officer be kept under consideration, adding that he could not recall any major decisions being made on asset allocation in recent years, and that perhaps it was an area that might benefit from increased officer support, as even a small uplift in returns would generate significant funds that could be used for the benefit of the City. Another Member queried whether the BHE review would set precedents from a governance perspective, particularly for other charities, as there was a longer-term strategic question around running various composite parts of the organisation independently.

In response to comments from Members regarding governance matters, the Chamberlain advised that similar discussions had taken place elsewhere and the points raised were under consideration. The Chamberlain added that the point regarding the potential appointment of a Chief Investment Officer would be worked through as part of the Target Operating Model work, noting that currently there was more of Chamberlain’s Department presence at Financial Investment Board, and City Surveyor’s Department at Property Investment Board.

In response to the point raised on wider governance implications, the Managing Director of BHE advised that some aspects of the work undertaken as part of the BHE Review could be rolled over towards work on other charity matters. The Managing Director of BHE added that with some matters reserved to the Court of Common Council, all functions relating to BHE were now under the BHE Board. However, whilst positive links had already been made, work was ongoing on fleshing out practical arrangements, and on a Supplemental Royal Charter which would hopefully enable the charity to do more in areas such as social investment.

The Chair thanked Members and officers for their contributions to the discussion and suggested that a meeting be set up between the leadership of the Committee, BHE Board, and Investment Boards with a view to discussing any further detail required regarding practical and longer-term arrangements for investments.

RESOLVED – That the resolution of the Bridge House Estates Board on 4^th May 2021 as set out in the appendix to the report be approved, and that responsibility for advising on matters relating to property and non-property investments be delegated to the Property Investment Board and Financial Investment Board respectively.