- Title page
- Chapter 1: Introduction
- Chapter 2: Recruitment of Members for Boards and Bodies
- Chapter 3: Appointment of Members for Boards and Bodies
- Chapter 4: Removal from Office
- Chapter 5: Induction for Appointees
- Chapter 6: In Support of Board Performance
- Annex: Background for all statutory Crown entity appointments
Chapter 1: Introduction
Who the guidelines are for
These guidelines are for everyone undertaking a government board appointment process. They are designed to assist departments, other State Services agencies, Ministers and their offices with making effective appointments to the boards of a wide range of agencies and bodies.1
While the guidelines apply to all government board appointments and inductions (with the exception of State-owned Enterprises and Crown-owned companies – see below), judgement and common sense should be used when deciding the sophistication of the process to use in each circumstance.
The agencies and bodies the guidelines cover include:
statutory Crown entities: Crown agents, autonomous Crown entities (ACEs) and independent Crown entities (ICEs). (See the schedule of statutory Crwon entities at the end of this document.)
statutory tribunals, Tertiary Education Institutions, Royal Commissions, advisory committees, professional regulatory bodies.
A range of other bodies and agencies in the State Services that have boards, such as the Reserve Bank and a variety of Trusts and other statutory bodies named in the 4th Schedule of the Public Finance Act 1989.
Many ministerial portfolios are also associated with bodies whose members constitute a board or its equivalent without employees (e.g. War Pensions Appeal Board; Queen Elizabeth II National Trust), or that serve as the governing body (e.g. Māori Television Service; New Zealand Racing Board). Some are set up for a finite period and not under specific legislation. In many cases, the Minister is responsible for appointing some or all of the members, and sometimes has the power to remove them.
Who the guidelines do not apply to
These guidelines are not intended for appointments to the boards of State-owned Enterprises or Crown entity companies. The Crown Ownership Monitoring Unit, within the Treasury (COMU) provides guidance for appointments to companies owned by the Crown.2
Governance principles and practices
Statutory Crown entities undertake a broad range of executive government functions (such as regulatory, advisory, and purchasing). Some entities exercise coercive powers, including powers to inspect, approve licences, and impose charges; others deliver public services in health, education, housing, or transport.
Governance in the State sector is about achieving desired results and achieving them in the right way. It is not a static situation, but includes the processes by which organisations are directed, controlled and held to account; their stewardship, openness, programme delivery and leadership. It includes such ‘generic’ corporate governance imperatives as ethical conduct, integrity in reporting and disclosure, and risk management. But there are additional elements that reflect the ethos of public service and the impact that State Services have on individuals, business and communities in New Zealand.
Good governance in the Crown environment includes:
clarifying and understanding the respective powers and responsibilities of Ministers, boards, management and employees
having, and following effective and well-understood accountability processes
the modelling of acceptable behaviours
probity in the management of public funds and disclosing and managing conflicts of interest.
Performance failure or the abuse of powers arising from inadequate governance structures and arrangements can have serious consequences, such as:
loss of credibility and trust from communities, business and Parliament
a lessened ability to carry out policies or deliver services, because the focus of management is diverted from positive achievement onto the need to ‘fight fires’.
The distinction between the governance and management roles of boards and chief executives needs to be clearly understood by all parties. Unless the chief executive or other office holders have specific statutory functions or powers (e.g. the Director of Maritime New Zealand), all decisions about the agency’s operation are made by the board, or under its authority. Some legislation provides a partial exception, where a Minister is authorised to direct a board to do or to take account of certain things.
Framework for appointments
Officials need to be familiar with any ‘documents’ relating to an agency or body that provide guidance to the appointment process required. These can include legislation, trust deeds, terms of reference, and Cabinet papers. These documents may:
clarify the responsibility for recommending and/or making appointments
specify if the vacancies must be advertised or if nominations must be sought from occupational or industry bodies
identify particular skills, qualifications or experience required by appointees
establish terms of appointment and the process for setting remuneration
specify who may dismiss a member and on what grounds.