Te Aratohu mō te Kopou me te Whakauru Mema PoariGuide: Board Appointment and Induction Guidelines (BAIG)
Te whakarite kopoungaPlanning appointments
Te kimi kaitonoRecruiting candidates
Te aromatawai kaitonoAssessing candidates
Te mātai i te takengaChecking background
Te whakatau i te utuSetting remuneration
Te matatapu me ngā paerewaPrivacy principles
Te kopou kaitonoAppointing candidates
Te whakauru kaitonoInducting appointees
Te horopaki ā-tureLegislative background
The background checking table
The role of ministers, Prime Minister and Governor-General
Formal appointments to boards are made by the responsible minister or by the Governor-General on the recommendation of the responsible minister (for most independent Crown entities). Responsibility for appointments to bodies other than Crown entities will depend on legislation or other governance mechanism.
For Crown entities, ministers may appoint or recommend only those who, in their opinion, have the appropriate knowledge, skills and experience to assist the entity to achieve its objectives and perform its functions. Once a minister has selected the candidate they consider best meets the full range of requirements to be an effective board member, all but the most minor appointments should be discussed by the Cabinet Appointments and Honours Committee (APH). Departments need to take account of the APH timetable when preparing appointment submissions. The Cabinet committee timetable is available to government agencies from CabNet.
The Prime Minister should be consulted in the case of major appointments before they’re submitted to APH; the definition of ‘major appointment’ is a matter of judgement by responsible ministers.
Consultation with political parties
Departments should check the relevant Cabinet Office advice for current protocols on consultation with other political parties before an APH submission is finalised and seek advice from their minister’s office or Cabinet Office if they’re not sure.
Discussion with the government caucus
The government caucus discusses most appointments, after they’ve been considered by APH and Cabinet.
Papers for APH should receive the same level of scrutiny from departmental senior managers as other papers for Cabinet committees. Information on the Cabinet process for appointments can be found in the Appointments Process Workflow from the Cabinet Office at the Department of the Prime Minister and Cabinet.
Content of Cabinet submissions
Submissions must meet the requirements set out in the CabGuide. In summary:
- background information (e.g. the legislative provisions for appointments to the organisation)
- the reasons for the proposal (e.g. replacing a member whose term has expired)
- description of the position – what it involves, and the qualifications required for the position (particularly those required by statute)
- minister’s certification that an appropriate appointment process has been followed
- the proposed appointee’s qualifications for the position
(e.g. professional qualifications, personal attributes, previous experience on boards)
- how the proposed appointment would enhance the balance of skills and experience on the board
- minister’s certification concerning conflicts of interest
- any other matters affecting the suitability of the proposed appointee, for instance whether it’s a second or subsequent term, and the reasons why reappointment is justified
- fees payable – what fee ‘category’ the board fits into and whether the proposed fee is within the Cabinet Fees Framework parameters
- an account of the consultation undertaken
- confirmation that full consideration has been given to an appropriate balance on the board in gender, age, ethnic and geographical terms, and that the contribution of disabled people is reflected
- if there will be any publicity about the
All papers for APH must be accompanied by:
- a completed copy of the curricula vitae form (see Candidate CV form) for each proposed appointee, and a form listing current membership details (i.e. before the appointments proposed in the paper take effect)
- the Organisation form.
Current versions of the forms can be found on the CabGuide website. See also Cabinet appointment paper template.
Formal consent to being appointed
Section 31 of the Crown Entities Act provides that, “before a person is appointed as a member of a statutory entity, the person must—
- consent in writing to being a member; and
- certify that they are not disqualified from being a member; and
- disclose to the responsible minister the nature and extent (including monetary value, if quantifiable) of all interests that the person has at that time, or is likely to have, in matters relating to the statutory entity.”
The board of the entity must notify the responsible minister of a failure to comply with © above as soon as practicable after becoming aware of the failure.
Formal consent should also be obtained for other types of appointments (e.g. tribunals, committees, and advisory groups). At what stage this occurs during the appointment process will depend on factors such as legislative requirements or other approved appointment procedures.
Declaration of interests
Ministers must confirm in the APH submission:
- that appropriate enquiries concerning conflicts of interest have been carried out, to identify any conflict of interest that could reasonably be identified (see Interests and conflicts)
- either that no conflicts of interest have been identified, or how it’s proposed to deal with an identified conflict.
If full information concerning conflicts of interest hasn’t been received from the proposed appointee in time, the APH paper must note that the appointment is subject to the satisfactory completion of conflict of interest checks. A report back to APH may be required if significant issues arise during those checks that raise questions about the suitability of the appointment.
The recommendation must reflect the relevant statutory provision:
“The Minister of [aa] recommends that the committee note their intention to appoint (or to recommend that the Governor-General, or the Governor-General in Council, appoints) [name] to the [bb] board for a term commencing on [xx] and expiring on [yy] (or for a term of [xx] years commencing on the date of appointment), to replace [zz], whose term has expired [or other reason].”
In some cases, as a result of consultation with their ministerial colleagues, a responsible minister may suggest a ‘new’ candidate at the end of the process or ask for alternatives to any names put forward.
It’s the role of the agency responsible for managing the appointments process to advise unsuccessful candidates of the outcome of their nomination. Advising unsuccessful applicants or nominees is best left until after a final decision has been taken, in case the initial recommendation is not approved. Those whose nomination or application is unsuccessful should be informed promptly and in a sensitive manner. The provision of feedback, if any, to unsuccessful shortlisted and interviewed candidates should be discussed with the minister’s office. The minister is the final decision maker in other words, the appointment is the minister’s preference.
Where unsuccessful nominees have been unaware of their nomination, no contact needs to be made with them. Where candidates have been put forward by a nominating agency, the agency responsible for managing the appointments process should advise the nominating agency of the outcome.
Avenues for review
Board appointments can be subject to judicial review proceedings, civil actions and scrutiny by Parliament or the Ombudsman. Minor irregularities in the appointment process may not invalidate the actions of a member while in office, but an appointment may be challenged in the courts. The appointment processes followed must minimise the possibility of questions about the validity of board members’ appointments or actions being raised later. Section 34 and section 35 of the Crown Entities Act states that appointments and acts stand as valid, even if there have been defects in appointments, unless there is a defect in the quali.
Confirmation of the appointment
Once the minister's intention to make an appointment has been noted by APH and Cabinet and (where appropriate) discussed by the government caucus, the minister makes the appointment or recommends the appointment to the Governor-General.
Notice of appointment or other appointment document
Under section 28 of the Crown Entities Act, the action that gives effect to a Crown entity appointment is the receipt of the appointment notice by the appointee. The minister signs the notice for Crown agents and autonomous Crown entity appointees. The Governor-General signs the notice for independent Crown entity appointments. The notice is sent to the appointee along with other appointment information required (e.g. an appointment letter).
Some other appointments will also require an appointment document, while some others only need a detailed appointment letter. This will depend on what the documents relating to the appointment require.
Letters of appointment
The contents of the draft letter of appointment must comply with the requirements set out in the CabGuide (see The appointments process). The letter of appointment is signed by the responsible minister.
The letter of appointment must include enough information on the role of the board and the duties of members for appointees to be clear about the expectations on them. There’s no 'standard' appointment letter, as information needs to be tailored to the situation of the board concerned. However, the letter should include:
- the designation of the position and a position description
- if not already gained, agreement that the person will accept the appointment
- the proper name of the board or office
- the authority under which the appointment is made
- the term of appointment
- legislation relevant to the board or office
- any specific ministerial expectations of the board as they affect individual appointees
- any specific agreement on handling of the interests disclosed during the appointment process
- training and development opportunities or obligations
- the frequency and expected location of meetings and of other board activities
- the fees and allowances relating to the appointment, and other board activities (in addition to actual meeting attendance) which will attract remuneration
- a clear indication that there’s no guarantee of appointment for a further term
- termination reasons and procedures
- the name of a contact person within the monitoring department who can provide further information.
Existing members being reappointed should be sent a similar letter though the level of detail required would be less.
Letters sent on the appointment of a new chair would be expected to contain additional detail and information about that particular role.
A copy of the letter and the notice of appointment should be sent to the board or body to which the person has been appointed.
New board members should be given additional material through the induction process (see Inducting appointees). In the case of officers listed on Schedule 4 of the Remuneration Authority Act 1977, whose remuneration is determined by the Remuneration Authority, see Independent officers and boards.
The board, minister or department may want to use a new board appointment to raise the profile of that board or body (e.g. to inform stakeholders about its role and the contribution it can make to the community or the economy). Any appointees and unsuccessful applicants should be advised personally before any public announcements are made.
Publishing appointments in the New Zealand Gazette
The New Zealand Gazette is the official newspaper of the New Zealand Government. Appointments to Crown entity boards must be published in the New Zealand Gazette, as soon as practicable after they’ve been confirmed. The Crown Entities Act doesn’t require each notice of appointment to be published individually; when a number of appointments are made to a board at the same time, they may be grouped together in one notice.
Generally, the wording in the appointment notice is to be the same as the Gazette notice, but the Gazette Office can apply its own editorial standards to a notice where they consider it appropriate to do so. The responsible department will be advised of any resulting amendments to the notice.
The action that gives effect to a Crown entity appointment is the receipt of the appointment notice by the appointee and not the publication of the appointment in the New Zealand Gazette. See How to submit for information about submitting material for the Gazette.
There are three ways in which the Governor-General makes appointments:
- Appointment papers sent to the Governor-General:
All independent Crown entity appointments are made in this way. The minister needs to provide to the Governor-General:
- an advice sheet
- an appointment document
- a covering note with information about the position and the proposed appointee
- a brief description of the role or function of the board
- any other relevant background
- Executive Council appointments: In a few cases, legislation requires board appointments to be made by the Governor-General in Council (e.g. The Representation Commission is appointed by the Governor-General under the Electoral Act 1993).
The above documentation is to be submitted to the Cabinet Office at the same time as the committee paper proposing the appointments. The responsible minister should attend the relevant Executive Council meeting or brief a colleague to do so.
Further advice on these first two types of Governor-General appointment is available from the Cabinet Office.
- Appointments made after consultation with the House: There are a number of appointments that are made by the Governor- General on the recommendation of the House of Representatives so that they may be seen as far as possible to be bipartisan. These include Officers of Parliament (e.g. the Ombudsman) and a small number of other appointments (e.g. the Independent Police Conduct Authority). This is desirable given the relationship the appointees have with Parliament or because of the sensitive nature of their role.
Some of these appointments are considered at APH, Cabinet and Caucus in the usual way. The Speaker of the House takes a lead role in running the process for the appointment of Officers of Parliament. Appointment processes for the other House appointments are the responsibility of the minister under whose legislation the appointment is made. The difference from other statutory appointment processes is that the Speaker or the lead minister also needs to consult the Opposition parties represented in the House in order to gauge support for the proposed appointment. This is preparatory to putting a formal Notice of Motion to the House for the proposed appointment. The timing and nature of the consultation is at the discretion of the Speaker or lead minister but generally it will be by way of letters to the leaders of all other parties represented in the House after the proposed appointment has been cleared through the Cabinet appointment process.
Once the Speaker or lead minister is satisfied that the Notice of Motion will gain a satisfactory level of support from the Parliament, a Notice is lodged with the Office of the Clerk of the House. The Clerk’s office will prepare the appointment documentation for the Governor-General.
When signed documentation comes back from the Governor-General, the Speaker or the responsible minister will undertake to advise and induct the person in the normal way.
Appointment of Crown entity chairs and deputy chairs
Appointments are made by the responsible minister or, in the case of independent Crown entities, the Governor- General. Only a member of a Crown entity board can be appointed as a chair or deputy chair. New chairs and new deputy chairs appointed from outside the current board are also appointed as board members.
Under of the Crown Entities Act, the chair and deputy chair each hold office until:
- they resign from being chair or deputy chair, or
- they’re removed from that office by the responsible minister or Governor-General, or
- they cease to be a member of the board, or
- the term of office that may have been specified on appointment expires, unless the member continues to hold office as provided for under section 32 of the Crown Entities Act (see section on Continuation in office) or is reappointed for a further term.
Although section 32 of the Crown Entities Act provides that the chair can stay on as chair even though their term has expired, it remains desirable to appoint or reappoint a chair or deputy before the term of the incumbent expires.
Appointment of a temporary deputy chair of a Crown entity by the board
In accordance with Schedule 5 of the Crown Entities Act, the board of a Crown entity may, by passing a resolution, appoint a temporary deputy chair (who can exercise all the functions and powers of the chair) from the current membership, when the following circumstances have occurred:
- the chair is unavailable or interested in a matter or
- there is no deputy chair, or the deputy chair is unavailable or is interested in the
The board should satisfy itself that the person has the skills necessary to lead the board.
Based on the ‘no surprises relationship’ between the board and the minister's ownership role in the entity, the board should apprise the minister of the situation if the conflict is ongoing, not just for an agenda item. The suggested candidate’s conflicts should also be reassessed prior to appointment.
Where there is no chair and no deputy chair to lead the board for a significant period of time (i.e. due to the appointments process required) the monitoring department should encourage the board to consult with the minister on the proposed candidate and to determine a timeframe that the temporary deputy chair is to be required in the role.
The monitoring department should provide a briefing to the minister on the temporary deputy chair and facilitate with the Board any inductions and meetings as required. Where the appointment is of interest to other ministers, a brief noting paper may be provided to APH.
If the circumstances require the commencement of a new appointment process, the monitoring department is expected to discuss the appointment process with the minister as soon as practical.
Terms of office are dependent on the legislation or other governance instrument.
Under the Crown Entities Act, the term of office for board members of Crown agents and autonomous Crown Entities is up to three years, and up to five years in the case of independent Crown Entities. In some cases, the specified term is a maximum, which provides for appointment for a shorter period.
Some entity boards include members who are elected as representatives of a particular 'constituency'. Their term of office is set by the terms of the relevant statute.
Appointment for subsequent terms
Board members should not be given any expectation that they’ll be offered a subsequent term of office.
The minister's view should be sought as soon as possible on whether reappointment of an incumbent is to be considered. In some cases, enabling legislation sets out the position on reappointment, maximum number of terms, etc. Where legislation is silent, reappointment can be considered. As a general guide, a second term can be considered appropriate. A member can be reappointed for further terms if the minister agrees there are sound reasons for doing so.
There’s a balance between the benefits derived from continuity of service on a board, the value of the board gaining new ideas and perspectives, and the need to avoid the board losing a number of experienced members over a short space of time. The board's goals, its overall skills need, relevant government policy settings and a member's performance may have changed since their term began.
If a further term is being recommended, departments don’t need to follow the full process as for an initial appointment, but they need to be able to assure their minister that appointment for a further term is the most appropriate option. The APH submission should clearly state the process that has been followed and the reasons for reappointment being proposed.
Where a further term is being considered, the following points should be reflected in the submission:
- legislative considerations (e.g. is there a formal limit on the number of terms?)
- are the current position description and the contribution made by the incumbent still relevant to the work of the entity and the mix of skills now on the board?
- how well does the current composition of the board match the current and future work programme, governance requirements and general needs of the entity?
- have the member's interests and possible conflicts been re- considered in light of the current situation?
Continuation in office
The ability for an incumbent to continue in office past the expiry of their term depends on the legislation or other instruments that provide for the conditions of the appointment.
Section 32 of the Crown Entities Act provides for a member to continue in office beyond the expiry of their term of office until:
- the member is reappointed, or
- a successor is appointed, or
- the person who has authority to appoint members to that board informs the member in writing that the member is not to be reappointed and no successor is to be appointed at this time.
This provision, often referred to as the ‘roll-over provision’ should generally be a short-term measure and not used to bypass the term of office as prescribed in legislation. However, a range of reasons can extend the time taken to make an appointment. For example, an appointment may expire within the ‘period of restraint’ leading up to a general election. In this situation, there may be further delay to making an appointment – the time taken to establish a Government, followed by a new minister taking a portfolio and wishing to take time to establish priorities.
Should a significant delay be expected, the minister should ensure the member is willing to remain in the role until such time as the minister makes a decision.
A member who resigns before the conclusion of a term of office, or is not reappointed, should be sent a formal acknowledgement and appreciation of their services, worded according to the circumstances.
Removal from office
Generally, the person with authority to appoint a board member also has the power of removal, which includes the ability to:
- remove or suspend a person from office
- reappoint or reinstate a person to the office
- appoint another person in place of a member who has vacated office, has died, is absent, or is incapacitated in a way that affects the performance of their duty.
In the case of Crown entities, an application may be made to the court for injunctive relief to stop a member or a board breaching duties (see section 60 of the Crown Entities Act). The Act also contains a power to remove the whole board of a statutory entity, if the members have breached the collective duties (see section 58 of the Crown Entities Act). Depending on the circumstances of a breach, and any immunities from proceedings that may apply, the entity itself could take proceedings against a member who hasn’t acted in accordance with the duties of an individual board member.
Responsibility for removal
Unless there are specific statutory or governance provisions to the contrary, each board member holds office at the pleasure of the person (minister or Governor-General as the case may be) who appointed them.
For Crown entities, any decision to remove a board member must be consistent with the principles of natural justice (e.g. section 5 and section 27 of the New Zealand Bill of Rights Act 1990) and a proper consideration of the matter irrespective of the type of entity (section 41 of the Crown Entities Act).
Powers and notification of removal
The table below summarises the differences in Ministerial powers for the three types of statutory Crown entities.3
Autonomous Crown entity
Independent Crown entity
Power to remove appointed members of boards
At minister's discretion
Minister, for justifiable reason
Governor-General, for "just cause" on minister's advice after consultation with the Attorney-General
Power to remove elected board members
By minister, for "just cause"
By minister, for "just cause"
Notification of removal to appointed members
Written notice stating the date of the removal (with a copy sent to the entity)
Written notice stating the date of the removal and the reasons for the removal (with a copy sent to the entity)
Written notice stating the date of the removal and the reasons for the removal (with a copy sent to the entity)
Notification of removal to elected members
Written notice stating the date of the removal and the reasons for the removal (with a copy sent to the entity)
"Just cause" is defined in section 40 of the Crown Entities Act. The definition includes (but is not limited to) misconduct and breach of board members duties. It’s a demanding and objective requirement; officials should be aware of relevant case law if such a step is mooted.
Legislation covering specific Crown entities may impose different thresholds before removal can occur (e.g. as schedule 3 clause 8 of the New Zealand Public Health and Disability Act 2000 does with elected members of District Health Boards). Depending on the relevant legislative powers, the threshold before such an action can be taken by a minister may be very high.
The minister (or the monitoring department, on a minister's behalf) should seek the view of the Cabinet Office if the removal of a board member is contemplated. The responsible minister also should consider informing Cabinet colleagues of any such intention and obtaining legal advice.
The Crown Entities Act also requires the minister to:
- give notice of the removal in writing to the member, with a copy sent to the entity, before the removal takes effect
- notify the decision via the New Zealand Gazette, as soon as practicable after giving the notice or after the notice has been given by the Governor-General.
3The table is based on sections 103, 104, 105 and 107 of the Crown Entities Act. The table expresses the most general provisions of the Act; variations may be provided for expressly in a particular entity’s establishment legislation.