- Title page
- 1: Relationships, roles and responsibilities
- 2 : Appointing and maintaining an effective board
- 3: Participating in setting the expectations and direction for entities
- 4: How can your monitoring department assist you?
- Appendix 1: How Crown entities fit into the public sector
- Appendix 2: Information for Crown entity companies
Regular engagement with boards
Key message: Setting strategic direction and annual expectations
As the responsible Minister, you "participate in the process of setting and monitoring the entity's strategic direction and targets" (s. 27 of the CEA). This is an important way for you to influence the performance of Crown entities. There are various ways you can engage with an entity to achieve this - for instance, by a letter of expectations, through the annual Statement of Performance Expectations (SPE) process, and through the development and review of an entity's Statement of Intent (SOI). Many Ministers meet regularly with boards, especially when they are engaged in strategic planning and preparation of the annual business plan.
As the responsible Minister, you should regularly engage with your board(s) to clarify performance and any other expectations you or the Government may have, reduce misunderstandings, and enhance the relationship you have with the board. When involved in strategic conversations with Crown entities, you should make sure the entity's proposed direction:
- adequately reflects the Crown's interests, including the results across a sector
- presents an acceptable balance between opportunities and risks, and
- is achievable by the Crown entity and its board.
You should engage with the entity on issues that relate to its performance, in particular:
- the activities/projects that were undertaken in the past year
- the intentions of the entity for the coming year and the next three years
- any changes being made to its operating environment
- the financial implications of the entity's future work programme, and
- what reporting you require and how performance should be reported.
You must also consider whether the proposed strategic direction will require:
- any change to the statutory and policy framework under which the Crown entity operates
- a new SOI
- regular reporting to ensure you receive the performance information you require
- a review of the entity's performance and operation
- either a Ministerial direction or a direction to support a whole of government approach (if applicable to three or more entities).
You may choose the methods of engagement with the entity as best fits your relationship with the particular board. For example, you may choose to discuss the direction and expectations for the next year in a meeting with the chair/entire board and/or may decide to send a written document in the form of a letter of expectations. Such a letter would usually be sent to the chair before the board starts its strategic planning for the coming year.