- Title page
- Chapter 1: Introduction
- Chapter 2: Recruitment of Members for Boards and Bodies
- Chapter 3: Remuneration for Members of Boards and Other Bodies
- Chapter 4: Appointment of Members for Boards and Bodies
- Chapter 5: Removal from Office
- Chapter 6: Induction for Appointees
- Chapter 7: Supporting Board Performance
- Annex: Background for all statutory Crown entity appointments
Chapter 4: Appointment of Members for Boards and Bodies
Sections in this Chapter:
Formal appointments to boards are made by the responsible Minister or by the Governor-General on the recommendation of the responsible Minister (for most independent Crown Entities). Responsibility for appointments to bodies other than Crown entities will depend on legislation or other governance mechanism.
For Crown entities, Ministers may appoint or recommend only those who, in their opinion, have the appropriate knowledge, skills and experience to assist the entity to achieve its objectives and perform its functions. Once a Minister has selected the candidate who he or she considers best meets the full range of requirements to be an effective board member, all but the most minor appointments should be discussed by the Cabinet Appointments and Honours Committee (APH). Departments need to take account of the APH timetable when preparing appointment submissions. The Cabinet committee timetable is available from the Cabinet and Cabinet committee workspace on the Public Sector intranet (PSI): https://psi.govt.nz/cabinet (link only available to those agencies with access to the PSI).
The Prime Minister should be consulted in the case of major appointments before they are submitted to APH; the definition of 'major appointment' is a matter of judgement by responsible Ministers.
Departments should check the relevant Cabinet Office advice for current protocols on consultation with other political parties before an APH submission is finalised, and seek advice from their Minister's office or Cabinet Office if they are not sure.
Papers for APH should receive the same level of scrutiny from departmental senior managers as other papers for Cabinet committees. Refer to the next page for a flowchart on the Cabinet process for appointments.
This diagram is prepared by the Cabinet Office and is available on the CabGuide website:
Submissions must meet the requirements set out in the CabGuide at:
- background information - e.g. the legislative provisions for appointments to the organisation
- the reasons for the proposal - e.g. replacing a member whose term has expired
- description of the position - what the position involves and the qualifications required for the position (particularly those required by statute)
- Minister's certification that an appropriate appointment process has been followed
- the proposed appointee's qualifications for the position - e.g. professional qualifications, personal attributes, previous experience on boards
- how the proposed appointment would enhance the balance of skills and experience on the particular board
- Minister's certification concerning conflicts of interest
- any other matters affecting the suitability of the proposed appointee, for instance whether it is a second or subsequent term, and the reasons why reappointment is considered to be justified
- fees payable - what fee 'category' the board fits into and whether the proposed fee is within the parameters of the Cabinet Fees Framework
- an account of the consultation undertaken
- confirmation that full consideration has been given to an appropriate balance on the board in gender, age, ethnic and geographical terms, and that the contribution of disabled people is reflected
- if there will be any publicity about the appointment.
All papers for APH must be accompanied by:
- a completed copy of the curricula vitae form (CAB 50) for each proposed appointee, and a form listing current membership details (that is, before the appointments proposed in the paper take effect)
- a brief outline of the functions and responsibilities of the organisation (CAB 51)
- a form, indicating what consultation has taken place in respect of the appointment (CAB 100).
Current versions of the forms can be found on the CabGuide website - www.cabguide.cabinetoffice.govt.nz/tools/forms.
Declaration about interests
Ministers must confirm, in the APH submission:
- that appropriate enquiries concerning conflicts of interest have been carried out, to identify any conflict of interest that could reasonably be identified (see Chapter 2: Interests, conflicts and other due diligence checks).
- either that no conflicts of interest have been identified, or how it is proposed to deal with an identified conflict.
If full information concerning conflicts of interest has not been received from the proposed appointee in time, the APH paper must note that the appointment is subject to the satisfactory completion of conflict of interest checks. A report back to APH may be required if significant issues arise in the course of those checks that raise questions about the suitability of the appointment.
The wording of the recommendation must reflect the relevant statutory provision, i.e.
"The Minister of [aa] recommends that the committee note his/her intention to appoint (or to recommend that the Governor-General, or the Governor-General in Council, appoints) [name] to the [bb] board for a term commencing on [xx] and expiring on [yy] (or for a term of [xx] years commencing on the date of appointment), to replace [zz], whose term has expired [or other reason]."
In some cases, as a result of consultation with his or her ministerial colleagues, a responsible Minister may suggest a 'new' candidate at the end of the process, or ask for alternatives to the name/s put forward.
The government caucus discusses most appointments, after they have been considered by APH and Cabinet.
It is the role of the agency responsible for managing the appointments process to advise unsuccessful candidates of the outcome of their nomination. Advising unsuccessful applicants or nominees is best left until after a final decision has been taken, in case the initial recommendation is not approved. Those whose nomination or application is unsuccessful should be informed promptly and in a sensitive manner. If possible, the reasoning behind the decision could be given at the time, or the decision-making process recorded in such a way that further information can be given to an unsuccessful candidate on request.
Where candidates have been unaware of their nomination, no contact needs to be made with them. Where candidates have been put forward by a nominating agency, the agency responsible for managing the appointments process should advise the nominating agency of the outcome.
Board appointments can be subject to judicial review proceedings, civil actions and scrutiny by Parliament or an Ombudsman. Minor irregularities in the appointment process may not invalidate the actions of a member while in office, but an appointment may be challenged in the courts. The appointment processes followed must minimise the possibility of questions about the validity of board members' appointments or actions being raised later. Section 34 (www.legislation.govt.nz/act/public/2004/0115/latest/DLM329961.html) and section 35 (www.legislation.govt.nz/act/public/2004/0115/latest/DLM329962.html) of the Crown Entities Act states that appointments and acts stand as valid, notwithstanding any defects in appointments.
Confirmation of the appointment
Once the Minister's intention to make an appointment has been noted by APH and Cabinet and has been discussed by the government caucus the Minister makes the appointment, or recommends the appointment to the Governor-General.
Notice of Appointment or Other Appointment Document
Under section 28 of the Crown Entities Act, (www.legislation.govt.nz/act/public/2004/0115/latest/DLM329954.html) the action that gives effect to a Crown entity appointment is the receipt of the appointment notice by the appointee. The Minister signs the notice for Crown agents and autonomous Crown entity appointees. The Governor-General signs the notice for independent Crown entity appointments. The notice is sent to the appointee along with other appointment information required, e.g. an appointment letter.
Some other appointments will also require an appointment document, while for others a detailed appointment letter will suffice. This will depend on what the documents relating to the specific appointment require.
Letters of appointment
The contents of the draft letter of appointment must comply with the requirements set out in the CabGuide, see https://cabguide.cabinetoffice.govt.nz/appointments-process-appointments-papers. The letter of appointment is signed by the responsible Minister.
The letter of appointment must include enough information on the role of the board and the duties of members for appointees to be clear about the expectations on them. There is no 'standard' appointment letter, as information needs to be tailored to the situation of the board concerned. However, the letter should include:
- the designation of the position and a position description
- if not already gained, agreement that the person will accept the appointment
- the proper name of the board or office
- the authority under which the appointment is made
- the term of appointment
- legislation relevant to the board or office
- any specific ministerial expectations of the board as they affect individual appointees
- any specific agreement on handling of the interests disclosed during the appointment process
- training and development opportunities or obligations
- the frequency and expected location of meetings and of other board activities
- the fees and allowances relating to the appointment, and other board activities (in addition to actual meeting attendance) which will attract remuneration
- a clear indication that there is no guarantee of appointment for a further term
- termination reasons and procedures
- the name of a contact person within the monitoring department who can provide further information.
Existing members being reappointed should be sent a similar letter though the level of detail required would be less.
Letters sent on the appointment of a new chair would be expected to contain additional detail and information about that particular role.
A copy of the letter and the notice of appointment should be sent to the board or body to which the person has been appointed.
New board members should be given additional material through the induction process (see Chapter 7: In Support of Board Performance).
In the case of officers listed on Schedule 4 of the Remuneration Authority Act 1977, whose remuneration is determined by the Remuneration Authority, please refer to guidance provided by the Remuneration Authority at: http://remauthority.govt.nz/clients-remuneration/independent-officers-and-boards/ and http://remauthority.govt.nz/assets/Uploads/REM/EmploymentStatusRemunerationStatutoryOfficers.pdf.
The board, Minister or department may want to use a new board appointment to raise the profile of that board or body e.g. to inform stakeholders about its role and the contribution it can make to the community or the economy. The appointee/s and unsuccessful applicant/s must be advised personally before any public announcements are made.
Publication of appointments in the New Zealand Gazette
The New Zealand Gazette is the official newspaper of the New Zealand Government: www.gazette.govt.nz.
Appointments to Crown entity boards must be published in the New Zealand Gazette, as soon as practicable after they have been confirmed. The Crown Entities Act does not require each notice of appointment to be published individually;6 when a number of appointments are made to a board at the same time, they may be grouped together in one notice.
Generally, the wording in the appointment notice is to be the same as the Gazette notice, but the Gazette Office can apply its own editorial standards to a notice where they consider it appropriate to do so. The responsible department will be advised of any resulting amendments to the notice.
The action that gives effect to a Crown entity appointment is the receipt of the appointment notice by the appointee and not the publication of the appointment in the New Zealand Gazette.
For information about submitting material for the Gazette, see: www.dia.govt.nz/diawebsite.nsf/wpg_URL/Services-New-Zealand-Gazette-Index/
Governor-General: Three types of appointment
There are three ways in which the Governor-General makes appointments:
- Appointment papers sent to the Governor-General: All independent Crown entity appointments are made in this way. The Minister needs to provide to the Governor-General an advice sheet; an appointment document and a covering note which provides information about the position and the proposed appointee; a brief description of the role or function of the board; and any other relevant background information.
- Executive Council appointments: In a few cases legislation requires board appointments to be made by the Governor-General in Council e.g. The Representation Commission is appointed by the Governor-General under the Electoral Act 1993. The documentation required for this is an Executive Council advice sheet; sometimes a separate instrument of appointment (for example, a warrant); and a CAB 50 (CV form). The above documentation is to be submitted to the Cabinet Office at the same time as the committee paper proposing the appointments. The responsible Minister should attend the relevant Executive Council meeting, or brief a colleague to do so.
Further advice on these first two types of Governor-General appointment is available from the Cabinet Office at: https://cabguide.cabinetoffice.govt.nz/appointments-process-appointments-papers
- Appointments made after consultation with the House: There are a number of appointments that are made by the Governor-General on the recommendation of the House of Representatives so that they may be seen as far as possible to be bi-partisan. These include Officers of Parliament (e.g. the Ombudsmen) and a small number of other appointments (e.g. the Independent Police Conduct Authority). This is desirable given the particular relationship the appointees have with Parliament or because of the sensitive nature of their role.
Some of these appointments are considered at APH, Cabinet and Caucus in the usual way. The Speaker of the House takes a lead role in running the process for the appointment of Officers of Parliament. Appointment processes for the other House appointments are the responsibility of the Minister under whose legislation the appointment is made. The difference from other statutory appointment processes is that the Speaker or the lead Minister also needs to consult the Opposition parties represented in the House in order to gauge support for the proposed appointment. This is preparatory to putting a formal Notice of Motion to the House for the proposed appointment. The timing and nature of the consultation is at the discretion of the Speaker or lead Minister but generally it will be by way of letters to the leaders of all other parties represented in the House after the proposed appointment has been cleared through the Cabinet appointment process
Once the Speaker or lead Minister is satisfied that the Notice of Motion will gain a satisfactory level of support from the Parliament, a Notice is lodged with the Office of the Clerk of the House. The Clerk's office will prepare the appointment documentation for the Governor-General. When signed documentation comes back from the Governor-General the Speaker or the responsible Minister will undertake to advise and induct the person in the normal way.
Appointment of a temporary deputy chair of a Crown entity by the board
In accordance with Schedule 5 of the Crown Entities Act, the board of a Crown entity may, by passing a resolution, appoint a temporary deputy chair from the current membership, when the following circumstances have occurred:
- the chair is unavailable or interested in a matter
- there is no deputy chair, or the deputy chair is unavailable or is interested in the matter.
The board should satisfy itself that the person has the skills necessary to lead the board.
Based on the no surprises relationship between the board and the Minister's ownership role in the entity, the board should apprise the Minister of the situation. The suggested candidate's conflicts should also be reassessed prior to appointment.
Where there is no chair and no deputy chair to lead the board for a significant period of time (i.e. due to the appointments process required) monitoring departments should encourage the board to consult with the Minister on the proposed candidate and to determine a timeframe that the temporary deputy chair is to be required in the role.
The monitoring department should provide a briefing to the Minister on the temporary deputy chair and facilitate with the Board any inductions and meetings as required. Where the appointment is of interest to other Ministers a brief noting paper may be provided to APH.
If the circumstances require the commencement of a new appointment process, the monitoring department is expected to discuss the appointment process with the Minister as soon as practical.
Terms of office are dependent on the legislation or other governance instrument.
Under the Crown Entities Act, the term of office for board members of Crown agents and autonomous Crown Entities is up to three years, and up to five years in the case of independent Crown Entities. In some cases, the specified term is a maximum, which provides for appointment for a shorter period.
Appointment for subsequent terms in office
Board members should not be given any expectation that they will be offered a subsequent term of office.
The Minister's view should be sought as soon as possible on whether reappointment of an incumbent is to be considered. In some cases, enabling legislation sets out the position on reappointment, maximum number of terms, etc. Where legislation is silent, reappointment can be considered. As a general guide, a second term can be considered appropriate. A member can be reappointed for further terms if the Minister agrees there are sound reasons for doing so.
There is a balance between the benefits derived from continuity of service on a board, the value of the board gaining new ideas and perspectives, and the need to avoid the board losing a number of experienced members over a short space of time. The board's goals, its overall skills needs, relevant government policy settings and/or a member's performance may have changed since their term began.
If a further term is being recommended, departments do not need to follow the full process as for an initial appointment, but they need to be able to assure their Minister that appointment for a further term is the most appropriate option. The APH submission should clearly state the process that has been followed and the reasons for reappointment being proposed.
Where a further term is being considered, the following points should be reflected in the submission:
- legislative considerations e.g. is there a formal limit on the number of terms?
- are the current position description and the contribution made by the incumbent still relevant to the work of the entity and the mix of skills now on the board?
- how well does the current composition of the board match the current and future work programme, governance requirements and general needs of the entity?
- have the member's interests and possible conflicts been re-considered in light of the current situation?
Continuation in office
The ability for an incumbent to continue in office past the expiry of their term depends on the legislation or other instruments that provide for the conditions of the appointment.
Section 32 (www.legislation.govt.nz/act/public/2004/0115/latest/DLM329959.html) of the Crown Entities Act provides for a member to continue in office beyond the expiry of his or her term of office until reappointed, or:
- a successor is appointed, or
- the person who has authority to appoint members to that board informs the member in writing that the member is not to be reappointed and no successor is to be appointed at this time.
This provision is a short-term measure only; for instance to enable the process for appointing a successor to be completed, or until after a general election. It must not be used to bypass the term of office as prescribed in the relevant legislation.
A member who resigns before the conclusion of a term of office, or is not reappointed, should be sent a formal acknowledgement and appreciation of his or her services, worded according to the circumstances.
Appointment of Crown entity chairs and deputy chairs
Only a member of a Crown entity board can be appointed as a chair or deputy chair. Appointments are made by the responsible Minister or, in the case of independent Crown entities, the Governor-General.
Under Schedule 5 (www.legislation.govt.nz/act/public/2004/0115/latest/DLM1992925.html) of the Crown Entities Act, the chair and deputy chair each hold office until:
- he or she resigns from being chair or deputy chair, or
- he or she is removed from that office by the responsible Minister or Governor-General, or
- he or she ceases to be a member of the board, or
- the term of office that may have been specified on appointment expires, unless the member continues to hold office as provided for under section 32 of the Crown Entities Act (www.legislation.govt.nz/act/public/2004/0115/latest/DLM329959.html) (see section on Continuation in office above) or is reappointed for a further term.
Although the 2013 amendments to the Crown Entities Act provide that the chair can stay on as chair, even though their term has expired, it remains desirable to appoint/reappoint a chair or deputy before the term of the incumbent expires.
6: Following an amendment to section 28 of the Crown Entities Act.