Part 6: Involvement of the CPIT Council

• Council consideration of the COOL programme and the Joint Venture
• Awareness and consideration of conflicts of interest

6.1
Even though the demand for the COOL programme ultimately exceeded CPIT’s expectations, ambitious targets were set quite early for the COOL programme. Therefore, we would have expected the CPIT Council to have a strong interest in, and an appropriate level of oversight of, the COOL programme and the Joint Venture.

Council consideration of the COOL programme and the Joint Venture

6.2
Mr Scott reported to the CPIT Council about the COOL programme and the proposed Joint Venture in August, September, and November 2003. The BSL information technology platform was demonstrated to the Council in September 2003.

6.3
The focus of the CPIT Council’s discussion was on the general risks of entering into a joint venture relationship with BSL when information technology is such a rapidly changing area, particularly since CPIT had recently had a negative experience with another of its joint ventures. Ms Buck’s dual involvement in BSL and CPIT was not a focus of discussion.

6.4
We obtained a disparate set of views from councillors as to whether, at its September 2003 meeting, the CPIT Council:

• endorsed CPIT management establishing an unincorporated joint venture entity; and
• was clear in relation to what the next stages were in the development of the BSL/CPIT Joint Venture, and the “trial” of a new course using the BSL information technology platform.

6.5
The resolutions from that September meeting read:

That Council approve in principle the establishment of the proposed CPIT Brylton Company/Joint Venture structure.

That Council authorise Management to proceed to prepare all relevant documentation for the incorporation of the proposed entities.

That the Council Executive meet to consider the documentation with time being allocated at the October workshop, if necessary, for further discussion prior to the Council authorising the CPIT seal being used to establish the companies required.

6.6
Some councillors considered that this meant the COOL programme and the Joint Venture were to go ahead immediately. Others thought that the basis for any relationship between BSL and CPIT would be “worked through” and brought back to the CPIT Council before any courses were delivered, and before the Joint Venture was established.

6.7
The CPIT Council had little other involvement in these matters until after the COOL programme had finished.

6.8
No corporate entities have yet been established. We understand that the CPIT Council and management are continuing to deliberate on matters regarding the management and governance framework for joint ventures, and the BSL/CPIT Joint Venture in particular.

6.9
We anticipate that the experience of the past 18 months will lead CPIT to more clearly articulate the roles and responsibilities of management and governance in joint venture business relationships. This will help to ensure that clear and transparent decision-making can occur, and that any risks (including reputation risks) of such arrangements are clearly identified, effectively mitigated, and routinely monitored.

Awareness and consideration of conflicts of interest

6.10
Generally speaking, Ms Buck’s role did not involve reporting to or advising the CPIT Council, although councillors told us that they were generally aware that she was an independent contractor to CPIT.

6.11
It has been difficult to determine the extent of the CPIT Council’s awareness of Ms Buck’s interests in BSL in 2003. The recollections of councillors differ. To some degree, this is understandable. Given the level of subsequent media coverage, it has been difficult for some councillors to disregard what they know now and to recall accurately what they did or did not know at a particular time more than a year ago. Yet this lack of clarity also suggests that the disclosures that were made in 2003 by Ms Buck about her connections with BSL may not have been well promulgated at the Council level.

6.12
Having considered all the evidence and recollections that we obtained, on balance we consider that some, albeit brief, mention was made to the CPIT Council about Ms Buck:

• We are satisfied that Mr Scott informed the Council in August or September 2003 that Ms Buck was a director of BSL. This is supported by the recollections of most – although not all – councillors. In addition, her proposed appointment to the Joint Venture Committee, as a BSL director, is recorded in the minutes of the September 2003 Council meeting.²⁶ Mr Scott told us that he would have made a point of mentioning Ms Buck’s connection because he considered it was likely to impress councillors about the quality and viability of BSL.
• There are differences in recollection among councillors about whether or not they were informed in 2003 of Ms Buck’s or Mr Belton’s shareholding. We have concluded that they were not informed. Mr Scott does not recall mentioning this information.

6.13
Any mention to the CPIT Council about Ms Buck seems to have been made somewhat “in passing”, and certainly not in the context of any announcement or discussion about a conflict of interest. No real attention seems to have been drawn to her conflict of interest.

6.14
In particular, no express advice was given to the CPIT Council about whether her connections represented a risk for CPIT; nor about how her conflict of interest was being managed. As a result, Ms Buck’s connections and involvement were not the subject of any discussion by councillors. The Council certainly took an interest in the Joint Venture agenda item, but it focused its attention on other matters.

6.15
Mr Scott told us that he sees nothing wrong with this situation. His view is that, since he is the employer of staff and contractors, issues such as conflicts of interest for personnel are for him – not the CPIT Council – to manage. He does not feel obliged to advise Council at all about matters regarding staff and contractors. Any information he does give the Council about such matters is offered as a matter of courtesy.

6.16
However, we consider that conflicts of interest can present political or reputation risks for an organisation. Strategic risk management is a legitimate matter of concern for the governing body of an organisation.

6.17
This situation involved a joint venture and a programme that were hoped to become significant activities, and a conflict of interest for a high-profile individual who was to represent CPIT in “selling” the COOL programme to outside organisations and the public. It could be expected that Ms Buck would be identified as part of the public “face” of CPIT for the COOL programme. It would therefore have been within the CPIT Council’s proper role²⁷ to have sought positive assurance, or issued directions, as to how her conflict of interest was to be managed.

6.18
We consider that it would have been prudent for CPIT management to have told the Council more about Ms Buck’s connections with BSL, her involvement with the business relationship and the COOL programme, and how this situation was being managed.

6.19
Having said that, we also consider that the little information that the CPIT Council was given was still sufficient to put it on notice that a potential risk existed for the organisation. Councillors were aware – in general terms – of Ms Buck’s role at CPIT, and they would have been aware of her high profile in the community.

6.20
In our view, it would have been prudent for the CPIT Council to have asked CPIT management more questions about Ms Buck’s connections with BSL, her involvement with the Joint Venture and the COOL programme, and how this situation was being managed.

26: The reference in the minutes is not entirely free from ambiguity. It says: “The proposed directorship of the Joint Venture is three directors from Brylton – Adrian McGrath, David Stock and Vicki Buck, and three directors from CPIT – John Scott, [Director of Finance] and [Dean of Commerce].” This wording doesn’t clearly state that Ms Buck is a company director of BSL, because the word “directors” has been used to describe the governors of the Joint Venture. However, at the least, the wording does clearly depict Ms Buck as one of the BSL representatives. Her position on the Joint Venture Committee is undoubtedly portrayed as being on behalf of BSL.

27: The legal duties of a Council of a Tertiary Education Institution include ensuring that the institution operates in a financially responsible manner; and ensuring that proper standards of integrity, conduct, and concern for the public interest are maintained (see section 181, Education Act 1989). We also note that, although CPIT policies are not usually presented to the CPIT Council for approval, the “Disclosure and Conflicts of Interest” policy was presented in July 2003.