Public Governance

1
Public Governance

• Directing public companies
• A practical approach

2
De Meerlanden

• Public Limited Company
• Shareholders 7 municipalities
• Waste collecting, composting, sweeping, other
  tasks in public space
• 250 people
• Turnover 45 mln.
• Main objectives
• Activities for 100.000 households
  4.000 companies
• Handling 300.000 tons of waste

- sustainability - profitable -
governmental influence - market driven
3
Directing public companiesa current issue

• Cost effectiveness
• Risk avoiding
• Complication of the specific task
• Internationalisation (waste)

4
PartnershipModel 1 Municipal Settlement
Municipalities
Board with politicians (aldermen)
Municipal settlement
Specifics MS - Legal status - Political
responsibility - Performing public tasks
Executing organisation

• Performing Tasks
• Waste collection
• Green keeping
• Grit icy roads
• Sweeping
• Activities in public space

5
PartnershipModel 2 Public Company
Shareholders Municipalities

• control
• advice

Board of governors

• Specifics Public Company
• - Legal status
• - Equity
• - Entrepreneurial responsibility
• Performing public private
• tasks

Executive board
Executing organization

• Performing Tasks
• Waste collection
• Green keeping
• Grit icy roads
• Sweeping
• Activities in public space

6
Governance Public Company (1)
Governance Two tier model
Shareholders

• Profit rights
• Merger/ cooperations
• Reorganizations
• Investment

Legal rights concerning the company
Company

• Company can follow a strategy
• Which has to be approved by shareholders
• Shareholders
• In general all decision which influence the
  character and identity of company are
  shareholders decisions

7
Governance Public Company (2)
Board of governors

• Governors
• advisory control
• has a status towards ceo and shareholders
• are appointed by shareholders
• have dominating influence on strategy and
  management

Company
8
ROLE of Management-Governors-Shareholders

• Management
• develops strategy
• prepares investments or
• makes annual report
• Governors
• influences strategy
• investments or
• annual report (dividend)
• Shareholders
• approve or disapprove
• strategy, investments or
• annual report

Advice control
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Directing a public companyTwo angles

• Influence on strategy and identity
• Influence on the performance through SLA
• Ad 1) - Highly regulated
• - Has a legal basis
• - Is a carrousel of meetings,
  responsibilities and reports
• Ad 2) - Entirely the opposite. Little is
  regulated.
• No long solid experience.

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Influence on performances SLA
A
B
D
E
Municipality
C
SLA
SLA
SLA
SLA
SLA
De Meerlanden nv
SLA contains agreements on
- Quality - Results
- Quantity -
Responsibility risks
- Tariff/prices - Contract
period
- Future policies - Reporting (!) -
Complaints Mostly 5 year period. Can also be
indefinite. All municipalities have different
SLAs. Not Anyone is the same !

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To handle a SLA (1)

• Two-sided issue
• 1 Principal
• 2 Public
• 3 perspectives
• A) Strategic
• B) Organizational
• C) Operational

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To handle a SLA (2)

• 1) Principal
• A) Basic assumption
• - how much influence
• - quality
• - costs
• Has to described carefully and from a long term
  perspective
• B) Set targets (not only on quality costs)
• Also - innovation
• - substainibility
• - customer satisfaction
• - policy
• - flexible set of instruments
• C) Contract manager is key-function
• Has too have content, legal financial
  knowledge,
• entrepreneurial empathy, practical, broad
  view.
• Also strong internal position. Access to
  specialists
• and aldermen. Persuasive qualities.
  Authorative.

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To handle a SLA (2)

• 2) Public company
• A) Set your targets regarding to your function
• B) Organize the work according to requirements in
  SLA
• - cost effectiveness
• - quality
• - complaint handling
• - extra work
• - be flexible
• - be aware of political environment
• C) Contract manager
• Contract manager is key function
• Qualities Content, legal financial
  knowledge,
• entrepreneurship, communicative abilities,
  practical, broad
• view. Access to operation management.
• Persuasive. Spokesman. Authorative.

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Waste policy

• Issue who has the initiative to develop new
  policy.
• Policy stays within municipality direct
  responsibility- lack of knowledge- public
  company pure executing, not gaining expertise
• Policy at public company
• expertise
• interaction between different municipalities
• - indirect
• - no counterpart at municipality, communication
• Conclusion both parties need policy makers.
• embed it in contract management
• operate closely together.

15
Some tips (1)
Employees
Bankers
Lobby groups
Company
Customers
Financial constraints
Shareholders
Politics
Company
Politics
Legal issues
Voters
The rest of the world
Lobbyists
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Some tips (2)

• And
• - Be sharp flexible
• - No long term contract without challenges
• - Organize mutual trust
• - Give public company room to act to achieve
  targets
• - It is a partnership