Appointing the Right Board for Your LATCO: Key Considerations for Sustainable Success
- truthaboutlocalgov
- 7 hours ago
- 3 min read
Local Authority Trading Companies (LATCOs) are increasingly used by councils across the UK to deliver services more efficiently, generate income, and innovate beyond traditional public sector models. However, the success of a LATCO hinges not only on its operational model but critically on the composition and effectiveness of its board.
Appointing the right individuals to the board is one of the most important decisions a local authority can make. These appointments are not merely procedural—they are strategic. The board sets the tone, culture, and direction of the company. Therefore, getting these appointments right is essential for governance, performance, and public accountability.
Understanding the Role of the Board
The board of a LATCO is responsible for overseeing the company’s strategic direction, ensuring financial sustainability, managing risk, and holding the executive team to account. It must balance commercial acumen with public service values.
“A LATCO board must be commercially sharp but socially grounded. That’s a rare but essential combination.”— Sarah Linton, Governance Consultant
This dual purpose requires a board that is not only competent but also diverse in experience and perspective.
2. Councillors Can Be Valuable—But Don’t Assume They Always Will Be
Councillors can bring valuable insight into local priorities, democratic accountability, and community needs. Some councillors make excellent board members—particularly those with relevant professional experience, strategic thinking skills, and a willingness to challenge constructively.
“We’ve had councillors on our board who’ve been outstanding—because they understood the difference between their political role and their director responsibilities.”— Chair of a LATCO Board
However, it is a mistake to assume that a good councillor will automatically make a good board member. The skill sets required are different.
“Being a great ward councillor doesn’t mean you’ll be a great company director. The roles demand different mindsets.”— Dr. James Rowe, Public Sector Leadership Advisor
The Importance of Independence and Objectivity
Whether appointing councillors, officers, or external professionals, the key criterion should be the ability to act independently and objectively.
Board members must be able to:
Challenge constructively
Focus on the company’s success
Manage conflicts of interest
“You need people who can take off their council hat and put on their NED hat. That objectivity is non-negotiable.”— Helen McGrath, LATCO Governance Specialist
The Role of Non-Executive Directors (NEDs)
Non-Executive Directors bring independence, objectivity, and a wealth of experience. A well-chosen NED can provide strategic insight, challenge groupthink, and mentor executive leaders.
“NEDs are the conscience of the board. They ask the hard questions and keep the company honest.”— Mark Ellis, Experienced NED and Audit Chair
Creating a Balanced and Effective Board
An effective LATCO board is one that is balanced in terms of skills, experience, and perspectives. This includes:
Executive Directors
Non-Executive Directors
Local Authority Representatives
“A board that’s too politically weighted can lose commercial focus. A board that’s too corporate can lose sight of public value. You need both.”
Key Skills and Attributes to Look For
When appointing board members, consider:
Strategic Thinking
Financial Acumen
Risk Management
Leadership and Influence
Sector Knowledge
Ethical Judgement
“We did a skills audit and realised we had no one with digital transformation experience. That changed our recruitment priorities overnight.”— LATCO Managing Director
The Recruitment Process: Best Practice
To ensure the best appointments:
Define the role
Advertise widely
Use independent assessors
Conduct due diligence
Provide induction and training
“Transparency in recruitment builds trust—with the public and within the board itself.”— Recruitment Partner for Public Sector Boards
Ongoing Development and Evaluation
Board effectiveness requires ongoing attention:
Regular evaluations
Continuous development
Periodic composition reviews
A culture of openness
“We treat board development like staff development—because it’s just as important.”— Company Secretary, LATCO
Governance Structures and Clarity of Roles
Clear governance structures are essential:
Scheme of delegation
Shareholder agreement
Robust policies
“Without clarity on roles, you get confusion, duplication, and sometimes conflict. Governance is your safety net.”— Legal Advisor to Local Authorities
The Role of the Shareholder
The local authority, as shareholder, must hold the LATCO to account while respecting its independence.
“The council is the shareholder, not the manager. That distinction is vital for good governance.”— Senior Council Officer
Conclusion: Appointing for Success
The board of a LATCO is not just a governance requirement—it is a strategic asset. Appointing the right people, with the right skills and mindset, is fundamental to the company’s success.
Some councillors can be excellent board members—but only if they are selected on merit, not assumption. The same applies to officers or others with existing roles. Everyone on the board must be able to take off their other hats and wear the NED hat with clarity and commitment.
“These are key appointments. Treat them with the seriousness they deserve.”— Governance Lead, Local Authority
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