- 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
Roles and responsibilities - monitoring department
Key message: Monitoring
As the responsible Minister, you can expect reporting from your monitoring department that is timely, comparable over time, contains analysis and monitoring judgments on key financial and non-financial issues and performance risks, identifies future implications or trends, and provides clear information on your options if action is required.
The amendments to the CEA in 2013 recognised that there is a triangular relationship between the Minister, the board and the monitoring department by explicitly including the role of the monitor. As with the Board, it is important that you build an effective and strong relationship with your monitoring department and advise them of your requirements.44
You should expect your monitoring department to:
- provide advice and support during the appointment and induction process for board members
- provide advice and support on Crown entities' strategic direction, planning processes and SPE and SOI
- advise you whether the Crown entity's strategic direction complements Government and sector goals
- make sure the Crown entity has identified the intended results of its work programme and how it is beneficial for NewZealanders
- monitor performance against the entity's SPE and the SOI
- provide advice on the Crown entity's capability (e.g. by giving advice on major business cases)
- provide advice on the merit of requests by entities for additional funding
- monitor financial and other risks, and keep you informed of those risks
- keep the Crown entity informed of relevant timetables, guidance and information
- improve coordination of Crown entities within your Ministerial portfolio
- provide advice on how sector wide information can be reported, and
- facilitate the entity's collaboration with other agencies in the public sector.
You can set clear expectations for monitoring and should consider periodically sending a letter of expectations to the chief executive of the monitoring department which serves to confirm your expected monitoring arrangements.45 These expectations may include messages that the monitoring department should focus on in order to provide advice that adds significant value, e.g. in strategic direction setting and risk analysis. You may wish to emphasise that the staff concerned need to have the credibility and capability to work with board chairs and provide high quality independent advice and judgements to the Minister. As the responsible Minister, you need to be engaged with your monitoring department in order to set expectations and make it clear what it is that you want.
44: The Treasury has the role of monitoring the Government's investment in companies and entities owned by the Crown, and can provide advice and good practice guidance to other monitors. See: www.treasury.govt.nz/commercial/.
45: Aligning this letter with expectations sent to Crown entity chairs will give the monitor time to adjust to any new requirements. Letters of expectations canvas the Minister's expectations for a Crown entity's strategic direction, governance and performance, and the Minister's specific priorities for the planning period. Letters of expectations are likely to be sent annually before the board starts preparing its SOI.