Controlled Entities

Controlled Entities

SUMMARY

The Controlled Entities Policy establishes the University’s governance framework for Controlled Entities in order to ensure effective systems of control and accountability.

 POLICY

Purpose

To establish a Controlled Entities governance framework that:
  • provides effective systems of control and accountability for Controlled Entities
  • is consistent with the University’s strategic goals, governance and risk management practices, and
  • assists Council to discharge its responsibilities effectively in relation to Controlled Entities.

Overview

The Macquarie University Act 1989 (NSW) provides for the University Council to establish Controlled Entities (Section 16A.) Such entities must not exercise any function or engage in any activity which the University is not authorised to undertake. This Policy establishes the governance framework and reporting requirements relating to the University’s Controlled Entities.

The University has a number of Controlled Entities. Each is a separate legal entity, governed by its own Board of Directors, but each is also connected to the University legally, financially and operationally.

DEFINITIONS
Board: the Board of the Controlled Entity.

Company: a Controlled Entity

Constitution:  the Constitution of the Controlled Entity

Control: where the University dominates the company’s decision-making, either directly or indirectly through controlling the composition of the Board, control of more than 50% of voting rights or controlling more than 50% of the share capital.

Controlled Entity: a person, group of persons or body of which the University or the Council has control within the meaning of Section 39 (IA) or 45A (IA) of the Public Finance and Audit Act 1983 (NSW)

External: in relation to Board members of a Controlled Entity means a member not being a staff member or student of the University or a member of the University Council.

Scope

This policy applies to staff of the University and its Controlled Entities.

Policy

 UNIVERSITY COUNCIL
The University Council will:
  • establish, acquire, or authorise the participation by the University in a Controlled Entity
  • ensure that a Controlled Entity acts within the scope of the University’s rights, powers and obligations pursuant to the Macquarie University Act 1989 (NSW) and applicable legislation
  • structure and organise a Controlled Entity to maximise its ability to achieve the purposes for which it was created
  • ensure that the Board of the Controlled Entity possesses the corporate and commercial ability and experience necessary for proper stewardship and control
  • ensure that a Board comprises an adequate range of skills to meet the individual requirements of each Controlled Entity
  • seek the recommendation of the Facilities and Finance Committee on the appropriate skills and experience required for Board positions, when Council is required to nominate persons for appointment to the Board
  • seek External Board members where possible on the recommendation of the Finance and Facilities Committee
  • provide a Board with training programs in the duties and responsibilities of directors and any other training in corporate governance which Council or the Board requires
  • ensure that Controlled Entities work with the University Counsel to adopt, promote and regularly evaluate their own Governance Principles
  • establish and document clear reporting requirements and processes for Controlled Entities
  • ensure Controlled Entities use appropriate financial prudence
  • monitor and oversee the activities of Controlled Entities
ESTABLISHMENT

Only Council can approve the establishment of, acquisition of, or participation in a Controlled Entity.

Council must consider, and approve as appropriate, the Vice-Chancellor’s preliminary proposal, full proposal and recommendation on the potential establishment or acquisition of a Controlled Entity.

GOVERNANCE PRINCIPLES

A Board must provide Council with a statement of, and any subsequent amendments to, its Governance Principles.

A Controlled Entity Board will annually review and, where necessary, amend its statement of Governance Principles.

CONSTITUTION

The Constitution of a Controlled Entity must require University Council approval for the Constitution and any subsequent amendments.

A Controlled Entity’s Constitution can only be amended in accordance with the requirements of the Constitution.

STRATEGIC PLAN AND BUSINESS PLAN

A Controlled Entity must document and keep updated a Strategic Plan, containing achievable and measurable performance targets, and including a Business Plan.

Council must approve a Controlled Entity’s initial Business Plan prior to the establishment of, acquisition of, or participation in the entity.

A Controlled Entity must seek approval from Council in advance of any proposed amendments to, or replacement of, its Business Plan.

A Controlled Entity will review its Business Plan and performance against the Business Plan, as required by Council, and report to Council on the outcomes of those reviews.

CONTROLLED ENTITYA Controlled Entity will:
  • operate in accordance with a standard of governance which meets the relevant legal requirements and community expectations, and which satisfies the requirements of its Governance Principles
  • adopt the policies of the University, unless otherwise determined by Council
  • make appointments to the Board in accordance with the Controlled Entity’s Constitution
  • only be wound up, and its assets distributed, in accordance with the provisions of its Constitution.
A Board will, in addition to the duties of directors of a company under the law:
  • approve the Business Plan, Annual Budget, Strategic Plan and operational plans of the company
  • monitor performance against the Annual Budget and Strategic Plan
  • ensure adequate control and accountability systems are in place including frameworks for delegations, risk management and legislative compliance
  • oversee internal and external audit plans including monitoring of matters arising from the audits
  • approve the entry into agreements, including with the University
  • approve policies and procedures for the Controlled Entity, consistent with the objects and functions of the University and the Controlled Entity
  • ensure policies and procedures are in place to govern disclosures of interest by directors and disclosures and management of conflicts of interest, including in relation to directors who are University staff, students or members of the University Council
  • establish, in conjunction with Council, a program of induction and training for Board members
  • regularly review its own performance in relation to the objects in the company’s Constitution, Business Plan, Strategic Plan, operational plans and budget
  • ensure that the Controlled Entity complies with Council reporting requirements
  • ensure that any uses of the University name, logo and brand are in accordance with relevant University consents and policies
  • ensure that insurances, whether through University insurance policies or the Controlled Entity’s own insurances or through a combination of the two, provide adequate coverage, at a level acceptable to the University.
REPORTING

The General Counsel will advise the Board of Council’s reporting requirements.

Reporting will be in accordance with applicable accounting and other standards.

The Directors will ensure that Annual Financial Statements are prepared in accordance with the requirements of the Authorities and Companies Act 1997 (Cwlth) and the Department of Education, Employment and Workplace Relations.

The Directors will facilitate an audit of these Annual Financial Statements by the Auditor-General of New South Wales.

The Controlled Entity will comply with Council reporting requirements, including but not limited to:
  • preparation of monthly management financial statements for presentation to the Office of Financial Services
  • reports on performance against its approved Business Strategy and performance targets

The Controlled Entity will immediately advise the Vice-Chancellor or General Counsel of any threatened or potential legal action involving the Entity.

Where the University is the sole shareholder or sole voting member of a Controlled Entity, the Council is the body which acts as the shareholder or member for the purpose of annual or general meetings of the Entity. Council may appoint the Vice-Chancellor or other senior University Officer as its corporate representative at any or all of those meetings.

Where the University is a shareholder or a voting member of a Controlled Entity, and there is more than one shareholder or voting member respectively, Council will appoint its corporate representative to represent the University at meetings of the shareholders or members.

COMPLIANCE AND BREACHES The University may commence applicable disciplinary procedures if a person to whom this policy applies breaches this policy (or any of its related procedures).

Policy Information

Contact OfficerChief Financial Officer
Date Approved1 October 2010
Approval AuthorityDeputy Vice-Chancellor and Chief Operating Officer
Date of Commencement1 October 2010
Amendment HistoryNovember 2011 – Compliance and Breaches statement added
August 2011 – policy reviewed and Date for Next Review extended to 3 years
Date for Next ReviewOctober 2013
Related DocumentsAuthorities and Companies Act 1997 (Cwlth)
Macquarie University Act 1989 (NSW)
Public Finance and Audit Act 1983 (NSW)
Policies / Rules Superseded by this PolicyNil
KeywordsControlled, Entity, Board, Director, Reporting, Governance, Constitution, Business Plan, Strategic Plan
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