Crown Board Appointments

Transcription

1 Crown Board Appointments Institute of Directors Hamilton February 2017 Ngaire Best Team Leader, Governance and Performance, The Treasury

2 Crown Board Appointments We are going to cover the following topics: A brief description of the landscape of state sector boards A more detailed summary of the State Owned Enterprises boards for which Treasury administers appointments Treasury s candidate database The steps in the appointment process The search process An ideal candidate The Treasury Commercial Operations Team: What we do Meet the team 2 The presentation does not explore in detail the governance and accountability frameworks of particular entities, nor the responsibilities of directors.

3 Internal Affairs other agencies eg MSD Treasury Crown boards 2,700 positions Ministry of Health 58 Ministry of Justice 59 MBIE 46 TEC 28

4 Crown Board Appointments The main appointment agencies, accounting for around ¾ of appointments, are: In addition, databases are also maintained by nominating agencies: Ministry for Women, Te Puni Kokiri, Ministry of Pacific Peoples, Office of Ethnic Communities and Office of Disability Issues. 4

5 The Treasury Commercial Operations (previously COMU) formed within Treasury late 2009, absorbing CCMAU Centre of expertise Promote good governance principals Monitoring performance and advising on Board appointments Act as shareholding Ministers agent 5

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7 Treasury advises on board appointments by the Minister of Finance, Minister for SOEs and also on some appointments for about 12 other Ministers Treasury has responsibility appointments for 54 boards, including: the 15 SOEs (11 of which are active businesses) Crown financial institutions Crown research Institutes 3 mixed ownership energy companies and Air New Zealand Various other Crown companies including TVNZ, Radio NZ, 3 airports, and the Schedule 4A companies And various other statutory entities Including ACC, Housing New Zealand, Lotteries Commission, Public Trust There are around 320 individual appointments across the 54 boards. Terms are generally for three years so about one third ( ) come up for consideration each year. A bit less than half are typically reappointed for a second term, so there are about 60 new appointments each year. 7

8 Treasury runs a board appointments database that enables: Candidates to maintain their own details and express interest in available roles Treasury to manage and communicate with the pool of candidates, and to prepare the documentation required for advising Ministers and completing the Cabinet appointment processes Around 4,000 active candidates on the database A relatively senior pool, with around 1,500 having CEO-level experience applications are received for each available role. 8

9 The appointment process Trigger: term end Board and Treasury agree on a draft position specification incl. skills Minister: Agrees skill requirements Reappoint Replace Retire and reduce board size 9

10 Steps in the appointment process Shareholders expectations for business are conveyed to the board Board and Treasury agree on board skills requirements against business expectations Board and Treasury agree on skills profile for forthcoming vacancies and/or reappointments Recommendations made to Responsible Minister Minister seeks nominations from Caucus colleagues Treasury seeks nominations from representative agencies, and searches own database Minister and Treasury agree on list of candidates for consideration Candidates interviewed and Minister advises on: competencies, skills, trouble-free Cabinet Appointments and Honours Committee (APH) confirms appointment(s) Cabinet ratifies Caucus consulted Appointment formally offered (and accepted), for both new and returning directors Chair and Treasury initiate respective induction programmes Referees contacted and checks are done Recommendations made to shareholding Ministers Ministers make appointments Ministers required to certify that due process has been observed and that candidates have no unmanageable conflicts of interest 10

11 The Matrix] Acme Corporation Board Matrix 2016 Competencies/skills Sectors Director Governance Chair Finance/Audit Big data Gender Diversity - ethnicity Wile E Coyote (Chair) F NZ European Jessica Rabbit F Pacific Island Roger Ramjet M European Elmer Fudd M NZ European Tweety Bird F Maori Exiting Sylvester the Cat M European 11 Key Strong competence Medium level Light Non-existent

12 The candidate search process Minister seeks nominations from Caucus and support party colleagues Minister agrees to call for nominations through the Treasury database Treasury seeks nominations from representative agencies, searches own database and other sources 12

13 Representative agencies Ministry for Women Te Puni Kokiri Ministry for Pacific Peoples Office of Ethnic Communities Recruitment agencies Institute of Directors 13

14 What we look for Generic director competencies: governance, senior executive or similar experience an ability to communicate clearly, both orally and in writing common sense, integrity and a strong sense of ethics strategic awareness an appreciation of the role of the Crown as a shareholder knowledge of the responsibilities of a director and an ability to distinguish corporate governance from management strong financial literacy a well-developed critical faculty the confidence to ask questions ability to work in a team PLUS Sector knowledge and specific skills 14

15 Ideal candidate Governance Sector Skills 15

16 Who is an ideal candidate? The general advice about preparing for governance roles in the private sector applies equally to these roles: Build a track record relevant to the roles you are seeking. Build a credible public profile within your areas of expertise. Undertake ongoing development in governance and other relevant disciplines. Commercially and financially oriented entities will require commercial and financial expertise. Ensure that your CV and cover letter fully and fairly reflect you. No hidden skeletons. Be well-prepared for interview. Understand the role you are seeking. Deliver. It is a repeat game. Diversity also matters at least as much as in the private sector, and it is an issue on which our Ministers are particularly focussed. 16 Be realistic about your prospects for appointment. Except where there is a particularly specialised requirement, there usually is a large number of applicants, among which several candidates will be adequately appointable.

17 Steps in the appointment process Shareholders expectations for business are conveyed to the board Board and Treasury agree on board skills requirements against business expectations Board and Treasury agree on skills profile for forthcoming vacancies and/or reappointments Recommendations made to Responsible Minister Minister seeks nominations from Caucus colleagues Treasury seeks nominations from representative agencies, and searches own database Minister and Treasury agree on list of candidates for consideration Candidates interviewed and Minister advises on: competencies, skills, trouble-free Cabinet Appointments and Honours Committee (APH) confirms appointment(s) Cabinet ratifies Caucus consulted Appointment formally offered (and accepted), for both new and returning directors Chair and Treasury initiate respective induction programmes Referees contacted and checks are done Recommendations made to shareholding Ministers Ministers make appointments Ministers required to certify that due process has been observed and that candidates have no unmanageable conflicts of interest 17

18 Future Director Programme Cabinet has agreed that: Rolled out over the next 4 years Target of 30% Boards across the state sector 1 year in duration Details being finalised: Selection criteria is yet to be established, diversity is to underpin the programme Candidate selection, joint chair and appointing agency Successful candidates will have expenses paid Not remunerated, development opportunity 18

19 Governance & Performance Strategy & Policy Commercial Advice Transactions Unit Unique roles/functions Appointments Governance policy Annual process Ownership policy Portfolio reporting Strategic review programme Transactions PPPs Social housing transactions Crown balance sheet strategic intention deliverables Commercial portfolio capital allocation policy/framework Enhancing governance of the commercial portfolio Commercial portfolio analysis & benchmarking CFI portfolio risk reporting Options for portfolio ownership Innovation through large scale procurement Solid Energy & Otakaro Stock transfers Tamaki Accelerated Redevelopment Programme HNZC performance Relationships with entities CRIs Services Primary Industry Tech & Air KiwiRail Financial Energy Housing Media Services AgResearch ESR GNS Landcare NIWA Plant & Food Scion NZ Post MetService QV Lotteries Fairway Landcorp AQ Crown Irrigation ACP KiwiRail Kiwibank SRES VIF LGFA P Trust NZSF ACC EQC GSF NPF CFH REANNZ N4L EPL TVNZ TVNZ RNZ RNZ Kordia Kordia T power Genesis Meridan MRP ECNZ Air NZ Airways CIAL DIAL HBAL HNZC Tamaki