Introduction

Rail Co is a public sector rail company responsible for delivering passenger rail services within Beeland.

Rail Co is governed by a supreme governing committee known as the Rail Co Trust Board. This board is responsible to theMinistry of Transport for ensuring that the Rail Co board of directors make the best use of public money and maintaineffective and efficient services to the public. Figure 1 below shows the governance structure of Rail Co.

The National Audit Authority (NAA) of Beeland is a national government audit authority with responsibility for evaluatingand reporting to the government of Beeland on public spending, suggesting improvements to and benchmarking againstthe performance of a wide range of publicly funded organisations. The NAA also has a responsibility to advise on the valuefor money (VFM) obtained from publicly owned enterprises and on the performance of the boards of such organisations,including the senior executives of these boards.

Rail Co has in the recent past received negative publicity in the media and from a variety of other sources relating to itspoor services and performance. This has prompted the Minister for Transport of Beeland, to commission the NAA toundertake an urgent investigation of the issues facing Rail Co.

The following exhibits (1–6) provide information relevant to Rail Co.
– Exhibit 1: Website page for Rail Co leadership and governance.
– Exhibit 2: Transport report published in the Beeland Herald newspaper.
– Exhibit 3: Passenger survey results and performance analysis spreadsheet for Rail Co and its competitors (three years data).
– Exhibit 4: Rail Co board meeting minutes.
– Exhibit 5: Outline person specification and summary CVs for two candidates for the new chief executive position
– Exhibit 6: Ticket sales, passenger usage data and fraud analysis at stations in towns within Region 1 – Beeland network – prepared by the financial controller of Rail Co.

Question 1a:

You are a non-executive member and chairman of the nominations and corporate governance (NCG) committee.

The recently appointed chairman of the Rail Co Trust Board has requested that you provide him with information relating to the governance of Rail Co and the roles and responsibilities of the non-executive directors.

Required:
You have been asked to prepare a briefing paper for the Rail Co Trust Board which:

(a) Identifies and explains the agency relationship of the parties involved in Rail Co and discusses the rights and responsibilities of those parties. (8 marks)

Professional skills marks are available for demonstrating communication skills in clarifying the agency relationships involved in Rail Co. (2 marks)