Inquiry into how Christchurch City Council managed conflicts of interest when it made decisions about insurance cover
19 April 2012
Tim Carter
Councillor
Christchurch City Council
PO Box 73016
Christchurch 8154
Peter Mitchell
General Manager, Regulation and Democracy Services Group
Christchurch City Council
PO Box 73016
Christchurch 8154
Dear Mr Carter and Mr Mitchell
Inquiry into how Christchurch City Council managed conflicts of interest when it made decisions about insurance cover
In November 2011, we received a request from each of you to look into the potential for Mr Tony Marryatt to have a conflict of interest as a result of his two roles as a director of Civic Assurance and as chief executive of Christchurch City Council (CCC). We have therefore been inquiring into:
- whether Mr Marryatt was involved in any decisions about CCC’s insurance after he became a director of Civic Assurance; and
- whether Mr Marryatt’s roles as a director of Civic Assurance and as chief executive of CCC are compatible.
I attach a copy of our final report. For your information, we will be publishing this letter and the attached report on our website.
On the first question – Mr Marryatt’s involvement in decisions on insurance matters – we have concluded that:
- Mr Marryatt appropriately excluded himself from decisions about placement of CCC’s insurance cover after he became a director of Civic Assurance in March 2008.
- However, nobody identified that the consequence of this exclusion was that the delegation was not being complied with and so the decisions were not properly authorised.
- Mr Marryatt and CCC should have identified the risk of a conflict of interest arising when he was first appointed as a director of Civic Assurance and at that time changed the delegations to exclude him from decisions about insurance cover.
- Having missed that opportunity, the delegation problem should have been identified and addressed to ensure that decisions were properly authorised when insurance cover was next arranged.
In our view, CCC needs to take better care to ensure that staff understand that delegations are important and that decisions made without delegated authority expose the organisation to legal risk.
On the second question – whether Mr Marryatt’s two roles are compatible – we have concluded that there are few areas of overlap between his roles as chief executive of CCC and director of Civic Assurance. The potential conflict of duties is not so pervasive that the two roles are incompatible. In our view, there is no reason for him not to continue in both roles, if CCC puts in place better arrangements to manage his involvement in decisions about insurance matters.
I would like to thank the staff of CCC and Civic Assurance for their cooperation as we carried out this inquiry.
Yours sincerely
Nicola White
Assistant Auditor-General Legal