Our Role

Page updated 20 Nov 2010

This section provides information on the monitoring environment for entities that are required to operate as successful businesses or have some commercial imperatives, and the role of the Crown Monitoring Ownership Unit (COMU) within that monitoring environment.

Where the Crown holds shares in companies it does not fully own, monitoring still takes place but varies according to Ministers’ shareholder rights. The frameworks for companies the Crown has shares in, but does not fully own, are not covered in this section.

Monitoring Environment

Ministers are responsible to the House of Representatives for overseeing and managing the Crown’s interests in, and relationships with, the various entities that fall within Ministers’ portfolios. Boards are the primary monitor of an entity’s performance and governance and are accountable to one or more Ministers for those functions. Notwithstanding the different establishment frameworks of entities, the frameworks all provide for the participation of Ministers (with differing rights and restrictions) in strategy setting, requesting information and monitoring the performance of each entity. Entities also operate within a wider system of accountability and scrutiny as shown in Diagram 1 below.

Diagram 1

Diagram 1 - System accountability and scruitiny from an entity's perspective.

 

As shown in Diagram 1, there are many individuals and organisations who can scrutinise entity performance. While the board has access to all the performance information, all the other parties have access to differing aspects of performance information - some private, some public. Diagram 2 shows, broadly, who has access to what type of information.

Diagram 2

Diagram 2 - What type of performance inforamtion is available?.

 

COMU as Ministers’ Appointed Monitoring Agent

The roles of Shareholding and/or Responsible Minister(s) place heavy demands on Ministers. These demands can be eased by giving Ministers access to advisors with an understanding of the key issues at the strategic, public policy and entity level, and who can support the Minister in making board appointments. This role is mostly filled by departments who, in this particular role, are called the monitoring department. The monitoring department provides advice on entity performance which enables the Minister(s) to hold the boards of the entities accountable. There can be more than one monitoring department, although this is not the norm.

COMU is the monitoring department for government entities that are operating as companies, some government entities that have commercial imperatives, and some companies where the Crown holds some shares.

Diagram 3 shows where COMU fits in relation to the Minister(s) and the government entities.

Diagram 3

Diagram 3 - COMU as the Minister's monitoring agent.

 

COMU’s Operating Principles

Guiding COMU’s work are seven operating principles. These principles are:

  • Our key engagements are with entity boards.
  • We prioritise our monitoring efforts in relation to the performance issues and risks within each entity.
  • We bring a portfolio perspective to our monitoring to ensure that the Crown's balance sheet is fit-for-purpose.
  • We provide independent analysis, commentary and judgements to Ministers.
  • We provide performance information to the public through our website.
  • We monitor international corporate governance changes and adjust our procedures as appropriate.
  • We share our knowledge with other government agencies undertaking monitoring roles, both in New Zealand and internationally.

For details of COMU’s monitoring approach, refer to Improving the Effectiveness of COMU’s Monitoring (176 KB). Over time, COMU intends to make available additional information on how we undertake the various aspects of our monitoring, appointments and governance roles.