Functions and powers of the entity
Collective duties of the board and individual duties of board members
Role of the board chair
General responsibilities of members
Members' interests and conflicts: identification, disclosure and management
Disclosure of information
Gifts and hospitality
Board meeting procedures
Crown entities as employers
Planning and reporting
Board and member performance evaluation
Board appointments and reappointment
Remuneration and expenses for board members
Liability and protection from legal claims or proceedings
Summary of minimum content for a governance manual by chapter
All decisions about the operation of a Crown entity must be made by, or under the authority of, the board in accordance with the Crown Entities Act 2004 (CE Act) and the entity's establishing Act (CEA s. 25). Where a board's powers and functions have been delegated, good governance and statute mean that the board remains legally responsible for the exercise of those functions and powers exercised under the delegation.
The powers of entity boards, including the power to delegate, are set out in ss 16, 17 and 73 of the CE Act. An entity's own legislation may provide additional or specific provisions relating to the authority of the board to delegate.
To whom can the board delegate?
Boards may delegate their functions and powers to members, employees, office holders, committees, Crown entity subsidiaries of the entity, and others approved by the responsible Minister.
Boards do not have unlimited powers to delegate entity functions and powers. To avoid undermining the board's role and responsibilities, boards cannot delegate:
- the general power of delegation (s. 73(4) CE Act);
- statutorily independent functions to a Crown entity subsidiary. (s. 73 (1)(f) CE Act); or
- any of its functions and powers to a committee unless that committee has a board member on it (Schedule 5, CE Act).
An entity's own Act may further restrict the functions and powers that a board can delegate. Where this is the case, it is important for boards to be familiar with this legislation and to handle delegations accordingly.
Conditions attached to delegations
There are a number of procedural checks and balances on delegating. These are designed to ensure the board always remains in control of and responsible for the exercise of functions and powers by delegates. These include:
- The board cannot delegate a function or power unless it has authorised the delegation by resolution and written notice to the delegate. The delegation can be revoked in the same way or by any other method provided in the delegation itself (ss. 73 (1) and 76 CE Act).
- The board can still exercise the functions and powers delegated to a delegate, and the board is legally responsible for the exercise of those functions and powers by the delegate under the delegation (s. 75 CE Act).
- Delegates must produce evidence of their authority to exercise functions and powers when asked to do so. In the absence of evidence to the contrary, they will be presumed to have the necessary authority (s. 74 CE Act).
- The board can impose conditions on a delegate, such as limiting the duration of the delegation, requiring the disclosure of interests or requiring regular reports (s. 74 CE Act).
- A delegate may delegate his or her functions and powers only with the prior written consent of the board and subject to the same conditions that are attached to the delegate's exercise of those functions and powers (s. 74 CE Act).
Chief executives and other staff
Boards may give their chief executives broad delegations, which reinforces accountability and control of the entity. Boards also have the flexibility to delegate directly to specialist staff without first delegating to the chief executive. When this approach is taken, the accountability relationship between the staff member, the chief executive and board needs to be made clear.
Governance manual content: Delegations
At a minimum a good governance manual should cover:
- boards remain legally responsible for the exercise of any functions and powers exercised under delegation;
- delegation policies and procedures, which should include areas such as:
- the process for reviewing delegations,
- any generic conditions or restrictions around delegations,
- policies for the reporting of decisions made under delegation; and
- schedules of delegations, which should include areas such as:
- the legislative authority for delegation,
- strategy (planning, setting policy, compliance),
- expenditure (budgets, contracts, operating and capital expenditure),
- financial management (bank accounts, investment, financial reporting, audit, taxation)
- communications (marketing, media, Official Information Act 1982, government)
- risk (risk management, insurance)
- legal (appointment, dispute resolution, litigation).