Why LATCOs Need the Right Non-Executive Directors: Lessons in Governance, Diversity and Integrity

As local authorities across the UK continue to explore new ways to deliver services and generate income, Local Authority Trading Companies (LATCOs) have become an increasingly popular model. These companies, wholly owned by councils but operating with the flexibility of private sector businesses, offer a unique opportunity to innovate outside the constraints of traditional bureaucracy.

But with opportunity comes responsibility. In a recent episode of The Truth About Local Government podcast, Matthew Masters sat down with Mark Beacom, UK Partner at Page Executive, to discuss why getting the right non-executive directors (NEDs) on LATCO boards is not just important—it’s essential.

The Purpose of LATCOs—and the Risk of Getting It Wrong

LATCOs are designed to give councils the ability to operate more commercially, generate revenue, and ultimately reinvest in local services. However, as Mark Beacom pointed out, the benefits of this model can quickly be undermined if governance is not taken seriously.

“If you don’t go out and seek the best minds with experience in a particular sector,” he explained, “you’re kind of losing the point of having the LATCO in the first place.”

The role of a NED is not ceremonial. Under the Companies Act, all directors—executive or non-executive—carry fiduciary, compliance and fiscal responsibilities. In the case of LATCOs, the shareholder is the local authority, but ultimately, it is the residents who are the true stakeholders.

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Governance: More Than a Tick-Box Exercise

One of the most common pitfalls Mark sees is the failure to treat LATCOs as separate entities. “They’re set up with the right intentions,” he said, “but the governance isn’t followed, and then they find themselves in a world of difficulty 12 to 24 months down the line.”

This is where independent NEDs come in. They bring external expertise, sector-specific knowledge, and—crucially—independence from the day-to-day workings of the council. Without this, there is a real risk of conflicts of interest, groupthink, and missed opportunities.

“Non-execs are there to protect the shareholder,” Mark emphasised. “And in this case, that’s the local authority and, ultimately, the residents.”

Board Dynamics and Skills Audits

As councils consolidate and restructure their LATCOs—sometimes reducing hundreds of companies down to a few dozen—there is a growing need to reassess board composition. This means conducting a proper skills audit to identify what expertise is needed and where the gaps lie.

“You’ve got to figure out what skills you need in the first place,” Mark said. “Then you’ve got to assess whether you have those skills on the board. If the answer is no, then you need to go out and find them.”

This is where strategic recruitment comes into play. Mark’s firm, Page Executive, separates the assessment process from the recruitment process to avoid conflicts of interest. “We don’t check our own homework,” he explained. “We work with independently vetted suppliers to conduct board assessments, and only then do we step in to help fill the gaps.”

Integrity in Recruitment

Integrity is a recurring theme in Mark’s approach. He warns against relying solely on internal networks or public adverts to fill board roles. While advertising is important for transparency, it only reaches those who are actively looking.

“If you’re only taking people from an advert, you’re only getting people that happen to see that advert,” he said. “You’re not necessarily getting the people who are not actively looking, who could be great for the role.”

Equally, relying too heavily on personal networks can lead to a lack of diversity and fresh thinking. “If you’re only appointing people from a small network that you know, there’s a chance of groupthink,” Mark warned. “It’s a big impact on potential diversity within that board.”

Diversity: Beyond the Buzzword

Diversity is not just about ticking boxes. It’s about building boards that reflect the communities they serve and bring a range of perspectives to the table. Mark is passionate about this, drawing on his own experience.

“I was the first person in my family to go to university,” he shared. “I grew up in a council house with a single parent. I haven’t had to face racism or sexism in my career, but I do understand what it means to come from a lower socioeconomic background.”

He also highlighted the importance of understanding the realities of the talent market.

“There are fewer women, fewer people of colour, and fewer people from lower socioeconomic backgrounds in senior roles. That means they’re more in demand, more looked after, and often overcommitted.”

To address this, Mark’s team supports the ENABL Network—Empowerment Network for Asian and Black Leaders—which connects mid-to-senior professionals from underrepresented backgrounds with non-executive opportunities. “All of our NED roles go to that group,” he said. “And we’ve already placed candidates from the network into LATCO board roles.”

Planning Ahead

Recruiting the right NEDs takes time. Once a board assessment is complete, the recruitment process typically takes five to eight weeks. This means councils need to plan ahead, especially if they are restructuring or building new boards from scratch.

“It’s not a quick process because it has to be done right,” Mark said. “If you’ve got responsibility for a LATCO board, you’ve got to give yourself enough time.”

Final Thoughts: Are You Preparing Your Board to Succeed?

As the episode drew to a close, Matthew Masters left listeners with a powerful question: “If you’re sat there and you’re responsible for a LATCO, really ask yourself—am I preparing this board to succeed? Am I looking after the company for our residents?”

The message is clear. LATCOs offer a powerful tool for local government innovation, but only if they are governed well. That starts with the right people around the board table—people with the skills, independence, and integrity to steer the company in the right direction. As Mark Beacom put it, “It’s not a tick-box exercise. It’s incredibly complex. And that’s why you have to work with somebody who really understands that.”

 This blog post was sponsored by Alliance Leisure, the UK's leading leisure development partner, specialising in supporting local authorities to improve and expand their leisure facilities and services. Click the logo above and check out their website and services.