Transcript Induction Programme Structure

Information for New
Members of Crown
Entity Boards
Crown copyright: State Services
Commission, March 2008
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Outline of content
1 What are Crown entities and where do they fit in the
State services environment?
2 How do Ministers influence Crown entities?
3 Accountability and scrutiny of Crown entities
4 Developing effective relationships
5 Governing a Crown entity
6 Expectations of board members
7 Applying public sector values
8 Additional resources
Crown copyright: State Services
Commission, March 2008
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1 What are Crown entities and
where do they fit into the State
services environment…?
Crown copyright: State Services
Commission, March 2008
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Elements of New
Zealand’s System of
Government
Constitutional
Monarchy
(represented by
Gov-General)
Legislative Branch
Parliament
Executive Branch
Government
Judicial Branch
Courts, Tribunals
Makes
law
Develops and
administers law
Interprets and
applies law
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Components of New Zealand’s System of
Government include…
Cabinet




Established by convention, with no constitutional basis. Powers
are held by individual Ministers in their own right.
An important forum for Ministers to work together to determine
Government policy and processes
Has a strongly enforced convention of collective responsibility
Supported by Cabinet Committees, eg APH
Caucus



Each party in Parliament has a caucus comprising all its MPs
Can be very influential, eg when the governing party has to
depend on the vote of every MP within its sphere of influence
Government caucus often consulted on board appointments
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Public Sector
City & District Councils
Regional Councils
State Sector
State Services
Legislative
branch
non-Public
Service
departments
Executive
branch
non-Public
Service
departments
Office of Clerk
Parl. Service
Police; NZDF
NZSIS; PCO
Public Service
Departments on 1st Schedule of
State Sector Act
Crown Entities (except TEIs)
-
Reserve
Bank
State-owned
enterprises
Statutory Crown entities (Agent, ACE, ICE)
Crown entity companies
Crown entity subsidiaries
School boards of trustees
Agencies on
4th Schedule
of Public
Finance Act
Offices of
Parliament
Crown Entities: Tertiary Education Institutions (TEIs)
Other agencies ‘associated with a Ministerial Portfolio’ e.g. NZ Council of Legal Education; QE II National Trust
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‘Crown entities’ are a key part of the
Public Sector
They constitute a wide variety of public organisations
delivering many public services
They are often the 'face of government‘ delivering:


Almost all public health, education, transport and housing
services
Key regulatory functions
Crown entities are collectively responsible for:



more than 50% of the Crown’s operating expenditure
The management of approximately 2/3 of the Crown's physical
assets
over half the workforce employed in the State services
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On one hand they are ‘stand-alone’ but,
on the other…
Crown entities are separate from the Crown - legal
entities in their own right
Because of their functions and the nature of their work
they are designed to operate at 'arms length’ from
Ministers because, for example:



Decisions on individual cases should not be influenced by
Ministers
Ministers should be distanced from operations
Entities require access to a broad range of skills
However, Ministers are still answerable to Parliament
for the entities’ performance
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The legislative framework for Crown
entities consists of…
The Crown Entities Act 2004



provides a consistent framework for the establishment, governance and
operation of Crown entities;
clarifies accountability relationships between Crown entities, boards,
responsible Ministers and Parliament; and
clarifies powers and duties of board members.
The entity’s own statute
Each Crown entity is established under and shaped by its own statute
which can negate or modify any provisions of the Crown Entities Act.
And other legislation including:
State Sector Act 1988. Public Finance Act 1989
Companies Act 1993. Official Information Act 1982
Ombudsmen Act 1975. Public Audit Act 2001.
Various Acts relating to employment and human rights
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There are 3 basic categories of
statutory Crown entities …
Crown Agents
Autonomous Crown Entities (ACEs)
Independent Crown Entities (ICEs)
The differences between the categories include the
nature of the work they do, the provisions for board
member appointments, and ministerial powers ot
direction.
There are also other types of Crown entity (Crown entity
companies, Crown entity subsidiaries, School Boards of
Trustees, and Tertiary Education Institutions)
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Differences between statutory entities
Crown Agent
Autonomous
Crown Entity
Yes
Power for
Minister to
appoint Board
Members?
Power to remove
Board Members?
Yes
Yes, at Ministers’
discretion
Yes, by Minister
for justifiable
reason in
Minister’s opinion
Power to direct
on Government
Policy of the
Day?
Whole of
Government
Direction?
Must ‘give effect
to’ policy if
directed by
Minister
Must ‘give effect
to’ if directed by
Ministers of State
Services and
Finance
Must ‘have regard
to ’policy if
directed by
Minister
Must ‘give effect
to’ if directed by
Ministers of State
Services and
Finance
Crown copyright: State Services
Commission, March 2008
Independent
Crown Entity
No, Gov-Gen
appoints on
recommendation
of Minister
No, by Gov-Gen,
for just cause , on
Minister’s advice.
Attorney General
consulted
No, unless
specifically
provided for in
another Act
Must ‘give effect
to’ if directed by
Ministers of State
Services and
Finance
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Each Crown entity has a
‘responsible Minister’ who …
Oversees and manages the Crown's interests in and
relationships with the entities that are within their portfolio
Represents the public interest in the entity (and, in private
sector terms, is the de facto ‘shareholder’)
Ensures an effective board is in place to govern the entity
Influences the entity’s strategic direction
Monitors and reviews Crown entity performance and results
Manages risks on behalf of the Crown
Carries out any statutory responsibilities
Note: The Ministers of Finance and State Services also have
important roles to play in the Crown entity sector.
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Ministers expect boards to…
be aware of demands on Ministers both Parliament,
taxpayers and other interested parties
accept that the Crown has interests wider than those of
ordinary shareholders in private companies
understand (and embrace) wider Government policy issues
as part of their decision- making
provide assurance of effective organisational performance
(delivery of results) and conformance with statutory functions,
powers, duties, etc
be aware of and keep Ministers informed about the potential
implications of organisation-specific issues on the Crown
ensure their Crown entity behaves prudently and sensitively
and in keeping with public sector values
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‘No surprises’
Boards have authority but Ministers are ultimately answerable
for the actions of their Crown entities to Parliament and the
public.
Ministers expect to be informed as fully and as early as
possible of any entity issues that may impinge on the
Government’s responsibilities or be potentially contentious
Proactivity and timeliness in applying the ethos of 'no
surprises' is essential to the integrity of the relationship and to
mutual trust and confidence.
A 'no surprises' way of working is not intended to interfere with
entities' statutorily independent functions nor with boards'
operational responsibilities.
Note: Crown entities should apply the same principles to their relationships with
monitoring departments Crown copyright: State Services
Commission, March 2008
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Ministers are supported by monitoring
departments
However a Crown entity is funded, a monitoring
department provides the Minister with information,
analysis and advice on its effectiveness and efficiency
A monitoring department is expected to focus on major
opportunities and risks
Monitoring departments support Ministers in the process
of identifying skill needs and appointing board members
A department’s authority to undertake its monitoring role
derives from its position as the Minister’s agent
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