A governance-focused understanding of ‘strategic financial management’ that aligns with Ministers’ expectations, Treasury guidance, and the Auditor-General, for adoption by Crown entity boards.
What is strategic financial management?
The board’s collective capability and practice of integrating financial stewardship, strategic intent, risk, and performance to ensure the organisation is financially sustainable, resilient, and delivers value for money over the short, medium, and long-term.
It reflects the Crown Entities Act 2004 duty to operate in a “financially responsible manner” (s51) while pursuing statutory objectives, and the Public Finance Act 1989 overall focus on long-term fiscal sustainability and proper use of public resources.
Why does this matter?
Ministers assess boards not on technical compliance, but on whether they can trust the board to steward public money wisely while advancing government objectives.
A board that defines strategic financial management narrowly - as budgeting, audit, or solvency - will fall short of those expectations.
High performing boards treat strategic financial management as a governance discipline integrating strategy, investment, risk, and long-term sustainability.
Strategic financial management as a function of good governance
Strategic financial management:
- is a core governance discipline through which the board exercises stewardship of public resources to achieve statutory purposes, ministerial expectations, and long-term public value
- sits at the intersection of strategy, stewardship, accountability, and performance.