Appendix 2: Letter to board chairpersons, 17 December 2004

This letter sets out what the Government expects of Crown entity boards²⁰ in working with responsible Ministers and the Government and draws your attention to some key aspects in the Crown Entities Act.

The Crown Entities Act was passed by Parliament on 16 December 2004. Following Royal Assent, the Act will come into force on 25 January 2005. You should note, however, that some important features of the new legislation will not apply until later, notably:

• the new reporting provisions will not generally apply until the 2006/07 financial year²¹
• the financial powers regime will not apply until 1 April 2005, and the banking provisions until six months after the Act is in force.

Our last letter to you, dated 20 September 2004, advised that the Select Committee had reported back on the Public Finance (State Sector Management) Bill. The governance and accountability provisions that were Parts 3 to 7 of the Bill are now contained in the Crown Entities Act. That letter also set out some broad changes in the State services environment that are important for the Government and Crown entities. There were no significant changes to the Bill as it progressed through its final stages to enactment.

As set out at the end of this letter, the Secretary to the Treasury and the State Services Commissioner will be in contact with you in the New Year about particular matters concerning implementation of the Act.

²⁰ The term 'board' is used generically to include corporations sole.

²¹ Disclosure of certain remuneration in the annual report will apply from 2005/06, however.