Chapter 3: Remuneration for Members of Boards and Other Bodies

Sections in this Chapter: 

Members do not set their own fees, remuneration and allowances. Fees for boards and other bodies are set using the following mechanisms:

Mechanism

Type of board of body covered

Cabinet Fees Framework

(discussed below)

  • Ÿ Crown agents and autonomous Crown entities excluding corporations sole (District Health Boards are Crown agents)
  • Ÿ Subsidiary bodies of Crown agents, autonomous Crown entities and independent Crown entities
  • Ÿ Bodies and committees set up to advise Crown entities (this includes sub-committees of independent Crown entities)
  • Ÿ Tertiary Education Institutions
  • Ÿ Trust boards
  • Ÿ Bodies and committees set up to advise departments
  • Ÿ Bodies and committees set up to advise Ministers, including Ministerial inquiries and taskforces
  • Ÿ Royal commissions
  • Ÿ Commissions of Inquiry
  • Ÿ Statutory tribunals and authorities
  • Ÿ Statutory bodies not covered by the Remuneration Authority
  • Ÿ Lay members of Courts
  • Ÿ Self-funded bodies where a Minister appoints some or all the members

Remuneration Authority

(discussed below)

  • Ÿ Independent Crown entities
  • Ÿ Corporations sole who are a Crown agent or an autonomous Crown entity
  • Ÿ the Judiciary
  • Ÿ Local authorities (note: these appointments are not covered by these guidelines)

Other mechanisms

(not covered in this advice)

  • Ÿ School boards of trustees (set by the Minister of Education, refer to the Ministry of Education)
  • Ÿ Crown entity companies (including Crown Research Institutes and their subsidiaries and State-owned Enterprises and their subsidiaries (These are governed by a separate methodology approved by Cabinet. Refer to the Crown Ownership Monitoring Unit))
  • Ÿ Boards and bodies whose legislation sets fees and allowances using other mechanisms
  • Ÿ Trans-Tasman bodies (consultation with the Minister of State Services is required to agree on the best mechanism)

None of these mechanisms cover individual consultancies. Such consultancies involve contractors appointed by a body in which the Crown has an interest under a contract for services for a specific project. A consultant has no ownership or governance role on a board or body.

Cabinet Fees Framework

Ministers set the fees for boards and bodies under the Cabinet Fees Framework (the Framework). The Framework is reviewed periodically - the current version can be found at www.dpmc.govt.nz/cabinet/circulars/. This guide includes a brief overview and some key points from the Framework. Users should check they are operating under the most up-to-date version. For advice on the interpretation and application of the Framework, please contact the State Services Commission at fees@ssc.govt.nz.

The applicable fee range and proposed level of fees for a particular appointment needs to be established before the submission is prepared for the Cabinet Appointments and Honours Committee (APH).

Each board or body should be classified under the Framework, according to its roles and responsibilities. The actual fee level is then set from within the applicable fee range taking into account factors such as the complexity of the role, expertise required, recruitment and retention issues, identified risks, the degree to which the role is in the public eye, and affordability. Proposed fees should be set out in the recommendations included in the Cabinet paper on the appointment, particularly if an exception to the Framework is proposed (see below).

Fees for members should be reviewed at regular intervals (for example, when the Framework itself is reviewed, or when appointments or reappointments are being made). Fees should not necessarily increase as a result of any review.

Exceptions

The Framework sets out the process that must be followed if it is proposed to pay fees outside the parameters of the Framework ('exceptions').

Exceptions include, but are not limited to, situations where it is proposed to:

  • pay fees above the applicable Framework range
  • increase existing fees
  • use alternative methods for paying or setting fees
  • making additional payments for additional work.

Any proposed fee increases or exceptions to the Framework require the responsible Minister to consult with the Minister of State Services. Consultation should take place early in the process and in advance of the Cabinet paper being lodged for those cases where consideration by APH and Cabinet is required. The payment of fees outside the Framework typically only applies in specific circumstances and is time-bound. A strong case must be made each time an exception is sought. Possible justification could include demonstrated difficulty in recruitment or retention; the particular skills and expertise required for a specific task; or an immediate need or a period of intense workload. The State Services Commission should be consulted at an early stage in all such cases.

An exceptional fee agreed for one member of a board does not automatically apply to subsequent appointments. Each case should be treated as a new exception.

When a trans-Tasman body is being established, the State Services Commission should be consulted on the level of fees, on a case-by-case basis.

Travelling and other expenses

Board members travelling to meetings or on other board business that requires them to be away from their normal places of residence are entitled to reimbursement of actual and reasonable travelling, meal and accommodation expenses.

The rate is to be paid to board members on the same basis as to employees of the monitoring department, or in accordance with information issued by a reputable organisation, e.g. Automobile Association for vehicle mileage rates. If this is not applicable, the rates to be followed are set out in the Framework.

The Remuneration Authority

Under the Remuneration Authority Act 1977, the Remuneration Authority is responsible, among other things, for determining and reviewing the fees for appointees to independent Crown entity boards, members of a Crown agent or autonomous Crown entity that is a corporation sole, Judges, and members of the House of Representatives. The role of the Remuneration Authority in setting remuneration is set out in Cabinet Office circular CO (11) 7.

The Authority is made up of a chair and two members appointed by the Governor-General, and supported by an executive officer. When a replacement person is being recruited for a chair, deputy chair or other unique board position (i.e. not a generic board member or body position as these do not require reviewing when a replacement member is being recruited) or when a new or other unique role is being established, a senior manager in the relevant department needs to contact the Authority with the position description and timeframe for the proposed appointment. The Authority will provide the department with an indicative fee range that can be used when discussing the position with interested people.

When the person has been appointed to the position, the department needs to send a copy of the signed notice of appointment and appointment letter to the Authority. The Authority will then issue the final fee determination to the entity or other body.

The Authority reviews fees each financial year. Any fee increases resulting from the review may be backdated to the beginning of the relevant financial year. A chair can make submissions to the Authority for a review of any of the board fees. The Authority will determine the priority of any such request.

To contact the Authority:
Phone: 04-499 3068, Fax: 04-499 3065
Email: info@remauthority.govt.nz.

Disclosure of total value of remuneration

The Crown Entities Act requires the total value of the remuneration of individual board members to be disclosed in the entity's annual report. 5 Other legislation may contain similar provisions.

5: See section 152(1)(a) of the Crown Entities Act.

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