Understanding Director Duties & Managing Conflicts of Interest in Council-Owned Corporations.
Today’s article is the second article of our Council-Owned Corporations series that explores the roles, powers and obligations of Directors and shareholders involved in council-owned corporations.
Council-owned corporations offer councils a powerful way to deliver services and pursue commercial opportunities, but they also bring complex governance challenges. Directors of council-owned corporations must act in the best interests of the company, exercising care, diligence and independence, even when appointed by the council. Meanwhile, the council, as shareholder, must focus on strategic oversight rather than day-to-day management. Maintaining this separation is essential to avoid blurred lines, shadow director risks, and conflicts between corporate and public objectives.
We outline practical steps for managing conflicts of interest, including appointing independent directors, defining clear governance boundaries, formalising conflict management processes, and conducting regular governance reviews. Strong governance and role clarity helps council-owned corporations to operate effectively, uphold transparency, and protect public trust, ensuring they can achieve both commercial success and community benefit.
Our team has extensive experience supporting councils across Australia with governance frameworks, director training and conflict management strategies. Please don’t hesitate to contact us if you have any questions relating to Director Duties, Conflicts of Interest and company and council policy in relation to Council Owed Corporations.
