Terms of Office
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.
Appointment for subsequent terms in office
Board members should not be given any expectation that they will 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 is 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 needs, relevant government policy settings and/or a member's performance may have changed since their term began.
If a further term is being recommended, departments do not 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 (www.legislation.govt.nz/act/public/2004/0115/latest/DLM329959.html) of the Crown Entities Act provides for a member to continue in office beyond the expiry of his or her term of office until 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 is a short-term measure only; for instance to enable the process for appointing a successor to be completed, or until after a general election. It must not be used to bypass the term of office as prescribed in the relevant legislation.
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 his or her services, worded according to the circumstances.
Appointment of Crown entity chairs and deputy chairs
Only a member of a Crown entity board can be appointed as a chair or deputy chair. Appointments are made by the responsible Minister or, in the case of independent Crown entities, the Governor-General.
Under Schedule 5 (www.legislation.govt.nz/act/public/2004/0115/latest/DLM1992925.html) of the Crown Entities Act, the chair and deputy chair each hold office until:
- he or she resigns from being chair or deputy chair, or
- he or she is removed from that office by the responsible Minister or Governor-General, or
- he or she ceases 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 (www.legislation.govt.nz/act/public/2004/0115/latest/DLM329959.html) (see section on Continuation in office above) or is reappointed for a further term.
Although the 2013 amendments to the Crown Entities Act provide that the chair can stay on as chair, even though their term has expired, it remains desirable to appoint/reappoint a chair or deputy before the term of the incumbent expires.