Part 2: Local government’s response to the code requirement

Local authority codes of conduct.

2.1
In this Part, we describe how councils responded to the new requirement to have a code of conduct. Our discussion is based partly on our analysis of codes, and partly on our interviews with councils. We look at councils’ overall views of the code and its usefulness, how they wrote and implemented their codes, and the level of availability of codes. We also discuss the application of codes to community boards.

Adoption of a code

2.2
Although the requirement to have a code of conduct came into force on 1 July 2003, councils had until 31 December 2003 to adopt their code.1 We found that all 85 councils have adopted a code, and the majority of councils met the 31 December 2003 deadline.

The concept of a code

2.3
Overall, the concept of a code is not particularly contentious. Of the people we spoke to, a few dislike the idea of having a code imposed on them, because they fear it may restrict individual freedom, or because they are sceptical about whether matters like behaviour and relationships can usefully be subject to regulation. However, those views are not widespread. Most people regard their code as a positive development, or do not have strong views about it either way. Most accept that it is better to have a code than not to have one.

2.4
Councils consider codes to be most useful as:

  • a prompt, to require members periodically to turn their minds to, and agree on, what constitutes acceptable standards;
  • a documented reference, so it is always clear what those acceptable standards are;
  • a tool for educating new members, who may have varying levels of understanding of local government (especially practices and expectations about decision-making, use of confidential information, and the distinction between governance and management); and
  • a risk management tool, to reduce the risk of conduct that may lead to personal grievances by staff.

2.5
Councils acknowledge that formal enforcement is difficult, but that the other benefits of codes makes them worthwhile. Although a code can ultimately be used as a disciplinary mechanism, many councils try to encourage their code to be regarded instead as promoting the harmonious functioning of councils.

2.6
In practice, many councils and members do not often refer to their code, but consider that this is not a bad sign. They consider it is meant to be a document that sits in the background. Its existence gives them some comfort.

2.7
We received a fairly strong message from elected members (endorsed by staff) that a code should not be used to interfere with robust debate, and that a code is not required for conduct issues that arise at meetings as these can be dealt with at the time by the chair of the meeting using standing orders (see paragraph 5.50).

Codes can protect council staff and reduce legal risk

2.8
We were interested to see if we got a different view of codes from council staff than elected members.

2.9
We found that staff tend to be more supportive of their code than members. Staffperhaps see it as a protection for themselves. This is a significant point and highlights the importance of codes as a governance mechanism – a code can explain the distinction between governance and management and set out the rules applying to elected members in relation to their interaction with the chief executive and staff. This may be particularly useful for newly elected members, who we are told sometimes find it surprising that there are limits on what they can say publicly about staff members.

2.10
Where an elected member criticises a chief executive or staff member publicly, that action may create a legal risk for the council if a staff member raises the issue as an employment dispute. The chief executive is employed by the council, so there is a direct employment relationship between the council and its chief executive. Individual members need to be aware that their actions in relation to the chief executive can create a legal risk for the council if they do not comply with good employer requirements or otherwise act in breach of the employment agreement. For example, if a member publicly criticises the chief executive, this is likely to breach those requirements. We were told that a code is a useful mechanism for reminding members of the rules in this area.

2.11
In the case of staff members, they are employed by the chief executive rather than the council. However, a member could also expose a council to legal risk by criticising a staffmember. If the staff member were to complain about the elected member’s behaviour under the code, the chief executive would need to take appropriate action to address the complaint. The council may face the risk of a personal grievance (against the chief executive) if the staff member had a legitimate complaint under the code and was not satisfied with the way the complaint was addressed.

Application to community boards

2.12
Those we spoke to frequently raised the issue of whether community boards should be subject to a code of conduct. Councils approach this in different ways. Some state that the council’s code applies to community boards, some encourage community boards to adopt the council’s code (or the board’s own code) voluntarily, and some are silent on the matter.

2.13
The Act does not automatically apply the requirement for a code of conduct to community boards.

2.14
We could not find any discussion of the issue in policy papers on codes of conduct and it does not appear to have been raised by submitters at the select committee stage of the Local Government Bill in 2002. Guidance material on the Act issued in 2003 states that, as community boards have no powers to employ council staff, the good employer obligations that apply to councils are not applicable to community boards.2 The guidance also says that the role of community board members is different, so different types of behaviour might be required from members, but it does encourage community boards to adopt their council’s code.

2.15
Several councils that we spoke to expressed a strong view that community boards should be subject to a statutory requirement to have a code of conduct. They gave examples of community board members making adverse comments about council staff, and said that councils face the same risk issues through comments made about council staff by community board members as by council members. They also said that community board members are also publicly elected, so should be subject to a code.

2.16
While community boards do not employ council staff, some council staff, as part of their employment by the council, have regular contact with community board members. As with elected members of a council, community board members could create employment law problems for a council if they were to publicly criticise a staff member. The positive aspects of codes, as perceived by councils, are also likely to apply to community boards. Community board members are elected by the community, so the community has an interest in boards’ governance practices. There may be merits in having codes for community boards beyond reducing a parent council’s legal risk as an employer.

2.17
We would encourage community boards that have not already done so to consider developing and adopting a code, which could be based on that of the parent council. The DIA may wish to consider whether the Act should be amended to require community boards to adopt their own code.

How councils developed their codes

2.18
In the absence of a clear policy rationale for codes of conduct, we were interested in how councils approached the task of developing them. While the Act requires each council to have a code, and sets out the matters a code must address, it is for each council to determine the approach it wishes to take to the content of its code, having regard to the purpose it wishes to achieve. Each council has discretion about matters such as whether it wishes to agree to a set of principles or aspirations, or a set of rules and obligations (or both), and whether to provide for enforcement and penalties.

2.19
We asked the councils that we spoke to how they developed their codes.

2.20
A few councils had voluntarily adopted a code, or something similar, some years before it became a legal requirement. They used that document as their starting point.

2.21
In most cases, councils used a model code prepared jointly by LGNZ, SOLGM, and the DIA as part of guidance on the new Act, as their starting point (we will refer to it in this report as the model code).3

2.22
Several councils then held one or more workshops of staff and elected members to consider whether the council wished to adopt or amend the model code. We were told that such workshops were very useful, and provided opportunities for members to discuss and debate the standards of behaviour and values that they were prepared to sign up to. Indeed, some people we spoke to said that the process of developing the code was more useful than the code itself. Some described the code as in the nature of a “social contract” between members, of standards and rules that they agreed to be bound by.

2.23
We were told that involvement in developing the code was a very useful experience for those elected members who were reasonably new to local government. Elected members come from a wide range of backgrounds, and some members will be more familiar with some of the principles in codes than others, such as the rules about conflicts of interest and the distinction between governance and management. We were told it is particularly useful for the rules about use of confidential information to be spelled out, and there was no statutory vehicle for doing this before codes existed.

2.24
Some councils had contentious issues when developing codes, including whether the code should require a register of members’ financial and non-financial interests, and enforcement processes and penalties. However, there was usually general agreement on the principles of standards and behaviour set out in codes.

How councils implemented their codes

2.25
The Act requires a council chief executive, at the first council meeting following a triennial general election, to give members a general explanation of laws affecting them, including specified Acts such as the Local Authorities (Members’ Interests) Act 1968 and the Secret Commissions Act 1910. Members must make their declaration of office at that first meeting, under which they must, among other things, undertake to act impartially in the best interests of the region or district.4

2.26
We would expect that the chief executive’s briefing would cover the code of conduct, and were told that the code would usually be covered in induction of new members (either at the first meeting or subsequently) even though it is not specified in the Act as one of the matters that must be covered.

2.27
Given that codes directly relate to members, it may be useful for the Act to specify the council’s code of conduct as one of the matters that must be covered in the briefing to members at the first meeting.

2.28
Some councils told us that they re-adopted their codes after the triennial general election in 2004, to ensure the “buy in” of newly elected members to the code and to give the opportunity for the rules and principles to be reconsidered and debated. We think this is a useful process, and recommend that all councils do this after each triennial election.

2.29
While codes tend to be covered in the induction process, they are not often the subject of significant formal training. We asked councils whether they run ongoing training sessions for members on governance matters. Most do not, but those that do said that members found refresher training in those matters useful. Some councils use an outside facilitator or legal adviser for such sessions.

Availability of codes

2.30
Members are given copies of their code. Accessibility of the code to other people varies.

2.31
There are a range of practices about making codes available to staff. In some cases, we were told that the code is available to senior staff and other staff on request, or that the code was available to all staff on the council’s intranet. Councils do not tend to cover the members’ code of conduct in training for staff members.

2.32
We anticipated that most councils would have their code on their website. However, at the time of our initial search, only just over half of councils’ codes were available online. Where we could not find a council’s code online, we contacted the council directly for a copy. Those councils told us that a copy of the code would be made available to anyone, including a member of the public, upon request. Since we began our study, 4 councils have updated their websites to include their code of conduct, or are in the process of doing so.

2.33
The Act requires each council to prepare and make publicly available a “local governance statement” after the triennial general election. The statement must include information on several governance matters, including “members’ roles and conduct (with specific reference to the applicable statutory requirements and code of conduct)”.5

2.34
We checked each council’s local governance statement6 for reference to the code, and found that all but one statement did mention the council’s code. The majority of councils have their local governance statement on their website, even many of those that do not have their code on the website.

2.35
Ten council websites make no mention of either the code or the local governance statement. There is no explicit requirement to make codes publicly available, so the requirement that the local governance statement (which must be made publicly available7) refer to the code is important, as a way of alerting members of the public to the existence of the code.

Our conclusions

2.36
All councils have a code. Overall, the concept of a code is not particularly contentious. Most councils accept that it is better to have a code than not to have one. Several councils found discussion and debate among members about what should be in the code to be valuable.

2.37
Councils consider codes to be most useful as:

  • a prompt;
  • a documented reference;
  • a tool for educating new members; and
  • a risk management tool.

2.38
Councils acknowledge that formal enforcement is difficult, but that the other benefits of codes make them worthwhile.

2.39
In practice, many councils and members do not refer to their code often. They consider it is meant to be a document that sits in the background.

2.40
Council officers tend to view the code more positively than members. This reinforces the importance of the code as a governance mechanism. Codes can help to explain the distinction between governance and management, and to make clear the requirements about members’ conduct in relation to staff. Codes have an important role in reducing legal risk for councils in the area of employment disputes with their chief executives, as they can be used to remind members of the rules in this area. Employment law risks can also arise for chief executives if they do not take steps to address complaints from staff about elected members’ behaviour. We were pleased to see that the councils we spoke to were very aware of those risks, and the usefulness of codes in managing them.

2.41
The Act does not automatically apply the requirement for a code of conduct to community boards. It is unclear whether this issue was given any detailed consideration in the policy development process.

2.42
Some community boards have agreed to comply with their parent council’s code or have adopted their own. We suggest that councils and community boards that have not considered this approach could usefully do so. We suggest too that the DIA consider whether the Act should be amended to require community boards to adopt their own code.

2.43
The Act requires each council to have a code, and sets out the matters a code must address. However, it is for each council to determine whether it wishes to agree to a set of principles or aspirations, or a set of rules and obligations (or both). Councils also have discretion about whether to provide for enforcement and penalties. When exercising their discretion in these matters, councils should have regard to the purposes they seek to achieve.

2.44
Concerning implementation of codes, we consider that:

  • chief executives should ensure that they cover the code of conduct at the first council meeting after each triennial general election;
  • the DIA should consider whether the Act should be amended to specify a council’s code of conduct as one of the matters that must be covered in the briefing to members at the first meeting after triennial elections; and
  • councils should “re-adopt” their codes after each triennial election, to ensure the “buy in” of newly elected members to the code and to give the opportunity for the rules and principles to be reconsidered and debated.

2.45
We found a range of practices about the availability of codes of conduct. While codes are generally available to members and senior staff, they are less available to other staff and members of the public. Our study has prompted some councils to consider making their codes more widely available. We recommend that all councils consider doing this, in the interests of openness and transparency.

1: See sections 274 and 40 of the Act. Each council had to adopt a local governance statement by 31 December 2003. The statement must refer to the council’s code of conduct.

2: Department of Internal Affairs, New Zealand Society of Local Government Managers, and Local Government New Zealand 2003, The KnowHow Guide to Governance under the Local Government Act 2002, page 59.

3: Ibid, Appendix B, page 101.

4: See clauses 14 and 21, Schedule 7, Local Government Act 2002.

5: Section 40(1)(e), Local Government Act 2002.

6: One council does not have a local governance statement. We have written to that council about this breach of the Act.

7: The Act defines “publicly available” in section 5(3).

page top