CCOs are business units run at arm's length from councils with their own board of directors.
They allow councils to make use of commercial skills and specialist expertise that might not be available within councils.
Examples of CCOs include Metrowater and Manukau Water, which provide water services in Auckland City and Manukau. Manukau also uses a CCO to run its swimming pools and leisure services. Councils' large property holdings and economic development are run by CCOs.
Councils appoint CCO directors, set the objectives and receive regular reports on their performance.
CCOs are not transparent and accountable to ratepayers in the way councils are. They do not have to release agendas or minutes of their meetings, which take place behind closed doors. They are, however, subject to the Official Information Act.
Until the Super City came along, councils decided what services would by run by CCOs following public consultation.
The Government has unilaterally decided on three CCOs for the Super City - transport, water and waterfront development. Four others have been proposed - council investments; economic development, tourism and events; major regional facilities and property holdings.
The Super City legislation provides mechanisms on how CCOs will work with the Auckland Council but little in the way of interaction with local boards.
Local Government Minister and Act leader Rodney Hide and Transport Minister Steven Joyce will appoint the initial directors without input from Auckland's elected leaders.