- Title page
- State sector reform legislation
- The Crown entity system
- About this guidance
- What are the monitoring department's functions?
- Appendix 1: Ministers' powers in relation to Crown entities
- Appendix 2: Central agencies' statutory responsibilities
- Appendix 3: Crown entities and accountability to Parliament
- Appendix 4: Glossary of public sector terms
Appendix 1: Ministers' powers in relation to Crown entities
Effective boards and effective working relationships with Ministers and departments are critical to improving the performance of Crown entities. But a range of other instruments are available to Ministers wanting to effect change.
Ministers have specific powers under the Crown Entities Act 2004. These powers can vary depending upon whether the entity is a Crown agent, an ACE or an ICE, or there is an entity-specific exemption. Examples of powers available to Ministers are to:
- participate in the process of setting and monitoring the entity's strategic direction and annual expectations (this will normally start with letters of expectation)
- request information
- review operations and performance
- appoint, reappoint and remove board members
- determine the remuneration of members of Crown agents and ACEs in accordance with the fees framework
- seek court orders restraining or requiring action under relevant legislation
- direct an entity to perform new functions (if its legislation allows)
- direct changes to an entity's SOI or SPE, and
- give statutory directions (Crown agents and ACEs).
Ministers have additional powers e.g. as funders to:
- approve or decline funding or increases in funding for specific outputs
- approve or decline increases in levies (or other sources of funding)
- contract for the supply of performance information
- contract for the supply of additional outputs
- make capital injections
- promote changes in legislation, and
- promulgate regulations or instructions.
Under the Crown Entities Act, board members are obliged to:
- ensure the entity acts consistently with its SOI and SPE
- operate in a financially responsible manner
- perform efficiently and effectively and in collaboration with other public entities
- act with honesty and integrity, and with care, diligence and skill
- act in good faith and not at the expense of the entity's interests
- inform Ministers about acquisitions of subsidiaries and other interests, and
- do other things that are required under the Crown Entities Act or other legislation, e.g.:
- - cooperate with ministerial reviews
- - consult the Minister on the SOI and any SPE
- - comply with any valid directions.
Under the Crown Entities Act, the Ministers of Finance and State Services may jointly issue directions to support a whole of government approach to whole categories or types of entity or to smaller aggregations of entities in order to improve public services. The Minister of State Services may request information from three or more Crown entities (s. 133 (2A) - (2C)) required for assessing the performance and capability of the State services overall. The Minister of Finance may also:
- request specific information under Part 4
- regulate or agree to, borrowing, guarantees and indemnities and use of derivatives by Crown entities, and to variations from standard banking or investment arrangements, and
- require the payment of a capital charge, or payments of surpluses.
Under the State Sector Act:
- Crown entities must comply with any applicable code of conduct issued by the State Services Commissioner ("the Commissioner")
- Government Workforce Policy Statements relating to the negotiation of collective and individual employment agreements and to the development of a workforce strategy can be applied to Crown agents and ACEs
- Crown entities are directly subject to other aspects of the Commissioner's mandate, and
- the Prime Minister and responsible Minister can direct the Commissioner to carry out some functions in relation to Crown entities (e.g. undertake reviews).