Appendix 2: Legislative requirements for statements of corporate intent and statements of intent

Statements of corporate intent: Legislative compliance and performance reporting.

CCOs and CCTOs* Crown Research Institutes Energy companies Port companies SOEs**
Statement of intent •



Statement of corporate intent
• • • •
Coverage over three financial years and updated annually • • • • •
Content to be covered for the parent entity and its subsidiaries ("the group")
Objectives of the group • • • • •
A statement of the board's approach to governance •



Key background information about the organisation and its operating environment
•


Nature and scope of the activities to be undertaken • • • • •
Ratio of consolidated shareholders' funds to total assets, and the definitions of those termsa • • • • •
Accounting policies • • • • •
Performance targets and other measures by which the performance of the group may be judged in relation to its objectives • • • • •
An estimate of the amount or proportion of accumulated profits and capital reserves that is intended to be distributed to the shareholdersa •
• •
Statement of the principles adopted in determining the annual dividend (if any) together with an estimate of the amount or proportion of annual tax-paid earnings that is intended to be distributed to the Crown
•

•
The kind of information to be provided to the shareholders/ shareholding Ministers by the organisation during the course of the next three financial years •
(Shareholders)		 •
(Ministers)		 •
(Shareholders)		 •
(Shareholders)		 •
(Ministers)
Procedures to be followed before any member or the group subscribes for, purchases, or otherwise acquires shares in any company or other organisation • • • • •
Any activities for which the board seeks compensation from any local authority, Harbour Board, or the Crown (whether or not the relevant entity has agreed to provide the compensation)b •
(Local authority)		 •
(Crown)
•
(Harbour Boardc)		 •
(Crown)
The board's estimate of the commercial value of the Crown/shareholders' investment in the group and the manner in which, and the times at which, that value is to be reassesseda •
(Shareholders)		 •
(Crown)
•
(Shareholders)		 •
(Crown)
The details of all transactions intended to be entered into between any member of the group and related parties as set out in the Energy Companies Act 1992

•

Other matters that are agreed by the shareholders/ shareholding Ministers and the boardb •
(Shareholders)		 •
(Ministers)		 •
(Shareholders)		 •
(Shareholders)		 •
(Ministers)
Reporting against intended performance
Annual report should contain information that is necessary to enable an informed assessment of the operations of the parent entity and its subsidiaries, including a comparison of performance with the relevant statement of intent or statement of corporate intent •
(Plus explanation of material variances)		 •
• •
Relevant legislation

Local Government Act 2002 Crown Research Institutes Act 1992 Energy Companies Act 1992 Port Companies Act 1988 State-Owned Enterprises Act 1986

Notes

* Council-controlled organisations and council-controlled trading organisations.

** State-owned enterprises.

a: We did not assess whether the council-controlled organisations in our report complied with these items.

b: We did not include these items in our assessment of content compliance for all applicable entity types because they are a conditional requirement.

c: Harbour Boards are still referred to in the Port Companies Act 1988. However, many of their functions have been transferred to local authorities. In practice, any compensation sought by a port company would be from relevant local authorities.

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