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Kia Takitoru - Anga Paearu Whakahaere mō ngā Hinonga Karauna It Takes Three: Operating Expectations Framework for Statutory Crown Entities

  1. Section 01
    Principle 1 - Clear roles and responsibilities
  2. Section 02
    Principle 2 - Strategic alignment
  3. Section 03
    Principle 3 - Efficient and effective monitoring
  4. Section 04
    Principle 4 - Trusted engagement
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All parties fulfil their critical roles and responsibilities so that they: have a shared understanding of their statutory roles and responsibilities, meet all statutory accountabilities, and adhere to the ‘no surprises’ convention

Note that ‘department’ is used throughout for ‘monitoring department’.

Understand the Crown Entities Act 2004, Public Service Act 2020 and the ‘arm’s-length’ regime

The responsible minister:

  • understands their responsibilities in relation to the Crown entity model and provisions of the Crown Entities Act 2004 — New Zealand Legislation 
  • understands the constraints on intervention in the entity’s statutorily independent functions
  • engages with the chair and board on ministerial and wider Government expectations and priorities, and understands constraints on ministerial intervention in the entity’s operational decisions

The Crown entity:

  • understands that despite being legally separate from the Crown, it is part of the the public sector and owned by the Crown
  • understands its own responsibilities in relation to the Crown entity model and provisions of the Crown Entities Act 2004 and, where applicable, provisions of the Public Service Act 2020
  • board understands its role as governor of the entity and primary monitor of entity performance
  • understands the Department’s role in representing a wider set of sector and system interests (for example, in the context of the priorities of the Government of the day Preparing the Annual Report and other End-Of-Year Performance Reporting: Guidance for Crown Entities — The Treasury) and in commenting on any matter in support of the minister’s role
  • assesses and manages risks

Monitoring department: 

  • understands its own responsibilities in relation to the Crown entity model and provisions of the Crown Entities Act 2004 and, where applicable, provisions of the Public Service Act 2020
  • recognises the primacy of the board’s role as monitor of entity performance
  • works with the entity to communicate the wider set of interests it represents (for example, in the context of the priorities of the Government of the day Preparing the Annual Report and other End-Of-Year Performance Reporting: Guidance for Crown Entities — The Treasury)
  • understands the constraints on ministerial and department intervention in the entity’s statutorily independent functions
  • supports ministerial engagement with the chair and board on priorities and understands its own role in commenting on any matter in support of the Minister’s role
  • customises its expectations framework in respect to the entity and develops resources to promote good practice in the relevant portfolio environment

Produce meaningful public accountability documents

The responsible minister:

The Crown entity:

  • ensures the statement of intent drives performance
  • delivers meaningful accountability documents in accordance with the legislative timetable and in line with the Minister’s expectations 

Monitoring department:

  • engages with the entity on whether the statement of intent remains fit-for-purpose either in part or as a whole
  • provides timely feedback to the entity on accountability documents and advises the minister during the process

Focus on contributing to Government’s goals for public services

The responsible minister:

  • stresses the importance of meeting the Government’s goals for the Public Service and the wider public sector

The Crown entity:

  • factors Government’s goals for the Public Service and the wider public sector into its strategic and operational plans

Monitoring department:

  • explains to the entity the Government’s goals for the Public Service and the wider public sector
  • works with the entity to review its responsiveness to those goals

Understand the roles of other important parties

The responsible minister:

The Crown entity:

Monitoring department:

  • understands:
    • the power of the Minister for the Public Service to request information
    • the role of the Minister of Finance and Minister for the Public Service in applying section 107 directions 

      Section 28, Crown Entities Act 2004 — New Zealand Legislation

    • the central agencies’ role coordinating the public sector and providing it with clear focus and strong leadership (the 3 central agencies, Te Kawa Mataaho Public Service Commission, the Treasury and the Department of the Prime Minister and Cabinet, work together as a ‘corporate centre’ to lead a public sector that New Zealanders trust, and that delivers on Government priorities, including outstanding results and value for money)
    • the role of the Office of the Auditor-General as the performance and financial auditor
    • how the Official Information Act applies to information held by the Department about the entity
    • the role and powers of select committees 

      Select committees — New Zealand Parliament

    • discusses with the entity Cabinet Office manual provisions and central agency expectations 

      Section 27A, Crown Entities Act 2004 — New Zealand Legislation

Understands the need to uphold integrity and ethics standards, and all-of-government guidance

The responsible minister:

  • actively promotes the importance of integrity and conduct in the entity’s delivery of services

The Crown entity:

  • ensures the entity it governs acts with the highest levels of integrity and professional and personal standards
  • upholds the Code of Conduct for Crown Entity board members
  • understands and applies the Commissioner’s model standards for effective reporting and management of conflicts of interest
  • upholds the Government Workforce Policy Statement

Monitoring department:

  • ensures the entity receives timely updates on changes to all-of government policies and guidance applicable to Crown entities

Respond to select committees

The responsible minister:

  • has a role in providing evidence to the select committee on the planned spending of appropriations
  • ensures the entity and Department receive select committee questions on time

The Crown entity:

Monitoring department:

  • assists the entity to meet select committee questionnaire deadlines and prepare for select committee appearances, where appropriate

Appoint and maintain effective boards

The responsible minister:

  • regularly addresses with the chair issues of board performance and the balance of the board’s skills, experience, and (where relevant) representativeness and diversity Guide for Ministers: Statutory Crown Entities
  • considers the chair’s views when making new appointments or reappointments to the board including the need for succession planning 

    Section 107, Crown Entities Act 2004 — New Zealand Legislation

  • ensures that appointments are merit-based and considered in the context of the need for gender balance and diversity
  • clearly instructs the Department on the support they seek in appointment rounds including the possibility of meeting with preferred or short-listed candidates
  • seeks the Department’s input on potential candidates for appointment and reappointment to the board and chair Guide: Board Appointment and Induction Guidelines 
  • brings their knowledge of what the Government is trying to achieve to bear on selection of board candidates
  • makes timely appointments to the board and chair

The Crown entity:

Monitoring department:

  • assists the minister to develop the appointment plan for a given appointment including opportunities for succession planning
  • assists the minister to search for candidates for board membership and/or the chair
  • ensures recruitment programmes take account of the need for gender balance and diversity. Sector engagement and
  • ensures there is a range of candidates, in order to address issues of board performance and any gaps in the board’s skills, knowledge experience, and (where relevant) representativeness
  • ensures the chair’s views are included in considering new appointments or re-appointments
  • provides appropriate Cabinet papers on appointments and effectively manages other support, including letters of appointment and gazetting 

    Section 27, Crown Entities Act 2004 — New Zealand Legislation

Induct the chair

The responsible minister:

  • briefs the incoming chair on ministerial expectations

The Crown entity:

  • ensures the chair’s induction covers critical relationships and roles (including that with the monitor) meetings with relevant people

Monitoring department:

  • ensures the chair is advised on the minister’s priority areas of interest, and assists the entity to induct the chair, as appropriate

Induct board members

The responsible minister:

The Crown entity:

  • chair ensures all board members attend a Crown governance induction as early as possible in their term of appointment Section 35, Public Finance Act 1989 — New Zealand Legislation
  • chair ensures new board members are well inducted into the work of the entity
  • chair engages with the Public Service Commission and Public Service Commissioner to clarify the Commission’s role with Crown entities

Monitoring department:

  • offers to induct (or facilitates the induction of) new board members into the Crown governance environment
  • considers information gaps and overlaps in the induction process and identifies which matters would be best covered by the Department, the entity itself, the Public Service Commission, the Treasury, or the Office of the Auditor-General 

    Section 35, Public Finance Act 1989 — New Zealand Legislation

Build and maintain board performance

The responsible minister:

The Crown entity:

  • regularly assesses its understanding of governance in the public sector generally and the Crown entity environment specifically
  • chair establishes clear performance expectations of the board and its members, and facilitates and active programme of professional development opportunities for those members
  • assesses its capability needs on a regular basis and/or at times of material change to its operating environment

Monitoring department:

  • provides the entity with ongoing, tailored support on governance in the Crown entity environment
  • provides (or facilitates provision of) other support as requested by the chair or board members

Assess board performance

The responsible minister:

  • makes it known that they expect the chair and board to run effective self-review and assessment processes
  • makes their own assessment of the board’s performance

The Crown entity:

Monitoring department:

  • provides assistance, if requested, to support the board’s self-review and assessment processes 

    Section 32, Crown Entities Act 2004 — New Zealand Legislation

  • uses high level information from board self-review and assessment to develop its advice to the minister on board performance, where appropriate
  • ensures information from board self-review and assessment is treated confidentially at all times.

Balance the board-management relationship

The responsible minister:

  • ensures systems are in place to update the board chair on outcomes from minister’s meetings with the chief executive

The Crown entity:

  • ensures the board-management relationship is balanced and roles are clearly understood
  • ensures management staff are well informed on the values, behaviour and culture that will enable the entity to deliver quality results consistently over time
  • Crown agent chair ensures the entity upholds the purpose, principles, values and spirit of service set out in the Public Service Act
  • autonomous and independent Crown entity chairs ensure the entities they govern uphold the ethos of the purpose, principles, values and spirit of service set out in the Public Service Act ethos
  • aligns staff performance management systems to its strategy and purpose

Monitoring department:

  • provides a link between the entity chief executive and the minister when relevant issues arise
  1. Appendix
    Kia Takitoru - Anga Paearu Whakahaere mō ngā Hinonga Karauna It Takes Three: Operating Expectations Framework for Statutory Crown Entities
  2. Section 02
    Principle 2 - Strategic alignment