More scrutiny for Crown entities on senior pay

Stronger oversight of the pay for chief executives and conduct of Crown Entity Board members will now come into force, State Services Minister Chris Hipkins says.

The changes come after the State Sector and Crown Entities Reform Bill was passed in Parliament today.

“The amendments will bolster the public’s trust and confidence in Crown entities, which are often the face of government for many New Zealanders,” Chris Hipkins said.

“These changes also address public concern that the levels of pay for the highest paid chief executives is excessive and, in some cases, Crown entity Boards had not met either the State Service Commissioner’s or Ministers’ guidance.

“We will now have stronger oversight and regulation of Crown entity chief executive pay and the conduct of Board members.

“We have also modernised the powers of the State Services Commissioner to investigate any impropriety in the sector. These are all necessary changes to strengthen integrity, transparency and accountability in Crown entities.”

An amendment to the Crown Entities Act means will now require the State Services Commissioner’s express consent to the terms and conditions of employment, including remuneration, of a Crown entity chief executive. Currently, Crown entity Boards are only required to consult the Commissioner on their intended terms and conditions, but are not bound to comply with the Commissioner’s advice or guidance.

“All of the changes are about greater consistency in the standards and expectations across the State sector,” said Mr Hipkins.

“Crown entities exist to serve in the public interest. They operate with public money for the public good, are responsible for running public hospitals and schools, and a range of other service delivery or regulatory activities.

“It is important that these entities remain connected around the core values of a unifying spirit of service to the community. That is what I expect these changes will support.”