NZ Treasury to put more acid on Crown entity boards

Wednesday 25th February 2015

The New Zealand Treasury has pulled in private sector directors to give it advice on how to put Crown entity boards under more scrutiny so as to avoid another rapid deterioration such as witnessed by coal miner Solid Energy.

Acting Secretary Vicky Robertson told Parliament's finance and expenditure select committee the Crown's financial adviser and overseer of state sector boards is operating under new strictures to lift its testing of boards' assumptions and is looking at public entities in the context of the wider industry they're operating in. That includes drawing on expertise from an advisory board made up of experienced private sector directors, who can provide robust advice that Treasury officials can then take to those boards.

A 2013 independent report into Treasury's oversight of the Solid Energy board found the government department could have been more forceful with the state owned enterprise, but didn't highlight a material failure in its processes. .

"What we're really focusing on, and it happened in Solid Energy's case, is that we've actually tested this advice by a really strong group of external people who are saying actually you've got something here that's needs focusing on," Robertson said. "We are working really closely with chairs and whole boards which is quite different to the quarterly monitoring cycle we used to do."

Robertson said the Treasury is taking a more rigorous approach when assessing state owned entities, and has undertaken strategic reviews of Landcorp, KiwiRail and New Zealand Post in recent times as part of a shift to improve its advice on the running of the government's commercial operations.

The Treasury wants boards to make the "right decision at the right time" and had government department been able to do that with Solid Energy, "we wouldn't be in the situation where we are now," Roberston said.

Solid Energy chair Pip Dunphy yesterday announced her resignation from the coal miner's board, leaving before her term ended in October, and will be replaced in an acting capacity by Andy Coupe.

When questioned by Labour Party finance spokesman Grant Robertson on the Treasury's central agency share services programme, which was criticised by an Auditor General report, Vicky Roberston said the department had taken on board the criticisms and the programme was in a "better place."

BusinessDesk.co.nz

Comments from our readers

No comments yet