11 June 2018

An effective chair is vital to the good governance and performance of an entity. Crown entity chairs are appointed from various backgrounds and they need to understand the requirements of the role. The role has many similarities to that of a private sector chair, but with some different elements - which come from legislation or practice.

A Crown entity chair's role includes:

  • providing effective leadership and direction to the board and entity, consistent with the Minister's expectations;
  • ensuring effective accountability and governance of the entity, consistent with the requirements of relevant legislation including the Crown Entities Act 2004 (CE Act); see also Chapter 1: Relevant legislation;
  • developing and maintaining sound relationships with Ministers and their advisors including:
    •  leading any formal entity discussions with Ministers, particularly on budget and planning cycles, including the Statement of Intent and letter of expectations (see Chapter 15: Planning and reporting);
    • signing off on formal governance documents (Statement of Intent, Statement of Performance Expectations, Annual Report, Memorandum of Understanding), generally in conjunction with the deputy chair if appointed;
    • acting as spokesperson for the board in ensuring the Minister and other key stakeholders are aware of the board's views and activities, and that Ministers' views are communicated to the board;
    • ensuring that the Minister is kept informed under the 'no surprises' obligations (see Chapter 3: Key relationships);
  • acting as the leader of the entity including presenting the entity's objectives and strategies to the outside world. Representing the entity to government and stakeholders, including attending any select committee appearance by the entity;
  • chairing board meetings including: setting the annual board agenda (see Chapter 10: Board meeting procedures); setting meeting agendas; ensuring there is sufficient time to cover issues; ensuring the board receives the information it needs before the meeting in board papers and in presentations at the meeting; ensuring that contributions are made by all board members; assisting discussions towards the emergence of a consensus view; and summing up so that everyone understands what has been agreed;
  • ensuring appropriate policies and structures are in place to support the board, including processes in accordance with Schedule 5 of the CE Act (see Chapter 10: Board meeting procedures);
  • providing motivation, guidance and support to other board members to ensure they contribute effectively to the governance of the entity;
  • taking the lead, often in conjunction with the monitoring department, in providing comprehensive tailored induction for new board members (see Chapter 17: Board appointments and reappointment);
  • ensuring that the development needs of individual board members are identified and addressed and, where necessary, dealing with underperformance by board members;
  • ensuring that an annual performance evaluation is conducted of the board as a whole, as well as of the chair and members individually (see Chapter 16: Board and member performance evaluation);
  • participating in the recruitment process for new board members. This is likely to include: maintaining a view on the desired composition of the board; considering succession planning for members and chair; supporting Ministers and monitoring departments in appointing and reappointing board members (see Chapter 17: Board appointments and reappointment);
  • providing guidance and support to the chief executive to ensure the entity is managed effectively. This includes establishing and maintaining an effective working relationship with the chief executive while also taking an independent view to challenge and test management thinking (see Chapter 3: Key relationships);
  • overseeing the employment of the chief executive including considering succession planning, and organising induction for a new chief executive;
  • representing the board in formal assessments of the chief executive's performance and in the required discussions with the State Services Commission in respect to chief executive terms and conditions at time of appointment and performance reviews (see Chapter 13: Crown entities as employers); and
  • ensuring that appropriate interest registers are in place (s. 64 CE Act), that members' conflicts of interest (including those of the chair) are dealt with appropriately (s. 66 CE Act), and that, where appropriate, dispensation is given to act despite being interested (s.68 CE Act) (see Chapter 7: Members' interests and conflicts).

Where the chair is unavailable, absent or conflicted, the deputy chair (if appointed) will fulfil these roles (Schedule 5 of the CE Act). A chair may also delegate various of these roles at times, for example to another board member.

Governance manual content: Role of the board chair

At a minimum a good governance manual should cover:

  • The key requirements of the Crown entity chair's role; reflecting both the provisions of the CE Act and any functions that are specific to the entity concerned.