Te mātai i te takenga Checking background

Board members are responsible for an entity’s strategy and organisational performance. Their reputation is often on public display and, through their appointment, they are directly linked to the appointing minister.

Due diligence background checks (background checks) represent an investment in good appointment outcomes. They provide an opportunity to build a clearer picture of the candidate that informs the shortlisting and final appointment processes. Background checks also aim to ensure the integrity of appointments to public sector boards. They help ensure the suitability of appointment and to maintain high standards of integrity and honesty.

Comprehensive background checks on potential board appointees take time and effort, but are essential for all preferred candidates who haven’t been previously vetted and may be needed for a reappointment. Checks may also be necessary to assist in the development of a shortlist or identifying a preferred candidate.

Timely completion of appointments is important, and planning an appointments process should commence early enough to build in robust background checks. Timing pressures such as a minister’s need to appoint by a set date or at short notice can make completion of appropriate vetting difficult. When exceptional circumstances preclude a full and timely process, the department should document its approach including reasons for the expedited process.

Some ministers prefer to be involved in agreeing a shortlist, and this may further compress the time available to complete checks. Ideally, checks should be completed before interviewing shortlisted and preferred candidates so the interview panel can explore relevant issues that emerge from the checking process.

Note: completing checks before the interview stage may incur time and possibly monetary costs on checking candidates who may not proceed to interview or appointment. Departments will also need to consider which checks can be done at an administrative level, which could be contracted out (if any), and which need time investment by senior staff.

Curriculum vitae documents should accurately represent a candidate’s background. Teams supporting the appointments process will need to have systems in place to determine the likely number and extent of background checks.

Ministers wish to appoint and maintain high performing boards, and many well-known candidates make themselves available for appointment. These include directors of public companies or high-profile organisations, former or current chief executives and former Members of Parliament. Interviews and reference checks should explore their previous contribution to organisational success.

Where candidates are less experienced or relatively new to governance of public bodies, their record in previous roles should form part of assessing their suitability for appointment. This could include contribution to addressing challenges on non-profit boards. If candidates do not have significant governance experience their previous record in executive roles should be considered.

When checking former Members of Parliament and experienced public sector chairs or directors, take a ‘trust but verify’ approach.

Former Members of Parliament, and experienced or successful directors are often invited by ministers to chair or join boards, committees, panels etc. There’s a risk that as ‘known’ candidates, they may not be fully checked or may be surprised at being asked to verify their experience.

In the corporate sector, more is now expected of directors in terms of disclosing past litigation and other adverse information. However, New Zealand law doesn’t yet require company directors to disclose their involvement in relevant historical legal proceedings. At the same time, candidate data trails can now cross borders and languages, and have a social media presence.

Experienced directors should be familiar with scrutiny of their record. As a standard process, all candidates or nominees should be asked to sign a consent form granting access to important and relevant information.

From time to time, candidates for significant positions may have an international dimension to their background. For these significant positions, most countries have their own sets of public records. It may be necessary to check records in every country in which the candidate has lived and worked. In such cases it will be important to ensure such appointments factor in the time required until these checks have been completed or an appointment is made subject to satisfactory completion of these background checks (see Overseas candidates).

In addition to the expectation of having a background check, candidates should have a reasonable expectation of a timely process. This can be assisted by the level of disclosure the candidate provides. For some candidates, however, checking may involve a high level of investigation.

Some departments may use private providers of background checking services to manage a high volume of appointments. Ensure the provider has clear instructions about what information it collects, and how it will store and process personal information in accordance with privacy principles. Overseas-based providers must also confirm that the service provided is subject to New Zealand law and to ensure that wording on their online forms can be adapted for candidates in this jurisdiction.

When advertising the vacancy, disclose the use of a private provider for background checks and its data protection arrangements. With the candidate’s permission, some providers retain information on their own systems for future use. If candidates agree, this provides an opportunity for candidates to be considered for other government board positions.

Referee checks are usually undertaken by the department supporting or making the appointment.

 Individual agencies are responsible for deciding whether to request national security screening for any given appointment and re-appointment. National security screening provides additional assurance that candidates are suitable for board appointments and advisory groups.

National security screening does not replace the requirement for responsible agencies to undertake their own due diligence including background and criminal history checks and scrutinise the candidate’s potential financial benefits and conflicts of interest.

Responsible agencies have access to separate guidance developed by the New Zealand Security and Intelligence Service (NZSIS), in consultation with the Commission and the Treasury, on how to assess potential national security risks to the boards and advisory groups under their remit using established criteria. The guidance also provides instructions on how to submit screening requests to the NZSIS. Please follow up with your management and security officer if you require access to the specific guidance on this matter.

The background checking table can be found as an annex at the end of this document. The table contains a range of criteria you can use to ensure the background checks are robust and thorough.

Departments have flexibility in the number of background check items they adopt for any given appointment. That decision is a matter of judgement depending on the public body’s risk profile, the extent and currency of previously verified information, and the time and resources available to undertake background checks. However, an investment in robust checking is an investment in achieving a good appointment outcome.

Ensuring individuals move through a robust background checking process mitigates the risk of unexpected outcomes that could undermine the integrity of an appointment process. It provides assurance to the appointer and other stakeholders, and maintains public trust in your organisation and the public sector.

Departments must judge for themselves how much additional checking is needed on candidates.

The standard guidance (see the background checking table) lays out a menu of items on what could be covered when undertaking comprehensive background checks on appointees to government boards, and other public bodies in which the Crown has an interest. This means all departments will need systems that ensure checks are accurate, timely and proportional to the nature and role of the board.

A higher standard of checking may be required by some departments for appointments to boards that deal with sensitive information or make significant strategic decisions of importance to New Zealand. In these cases, the department may customise background checking to a higher standard. This may include security clearance, closer scrutiny of financial interests or Police vetting.

A specialist category of appointment is applicable to specialist committees and tribunals such as those in the health and justice sectors. These appointments are often made on recommendation from specialist bodies, members of which comprise the majority of appointees.

Figure 3: Specialist categories of appointment – guidance for the appointment of specialist expert bodies