Ownership Framework

Page updated 20 Nov 2010

The New Zealand government may choose from a wide range of organisational design options if it wishes to establish an entity to carry out a particular commercial function. The government can also choose to hold shares in companies which it does not fully own. This page provides information on the ownership structure and organisational design features of entities monitored by COMU. Supplementary information is contained in the Main Organisational Design Options: of-org-des.pdf (18 KB).

Entity Design or Grouping Company or Not Commercial or Non-commercial Principal Objective Ownership Key Ministerial Powers to Direct the Board Legislative Regime[2]
State owned enterprise Company
The exception is KiwiRail which is not a company but a statutory corporation.
Commercial, while exhibiting a sense of social responsibility and being a good employer. To be a successful business. Wholly owned by the Crown throughtwo Shareholding Ministers. Equity bonds can be issued. To date, none have been issued. Can direct on content of statement of corporate intent (which Ministers can also do with most other boards they wholly own) and determine dividends. State-Owned Enterprises Act 1986 (Legislation website), Companies Act 1993 (Legislation website).
The exception is KiwiRail, which is subject to the New Zealand Railways Corporation Act 1981 (Legislation website) and the State-Owned Enterprises Act 1986 (Legislation website), but not the Companies Act 1993 (Legislation website).
Crown Research Institutes  (CRIs) Company. Generally known as Crown entity companies. Not fully commercial with multiple objectives, while exhibiting a sense of social responsibility and being a good employer. To carry out research for the benefit of New Zealand. Wholly owned by the Crown CRIs must have two or more Shareholding Ministers. Shares in a Crown entity company may only be held by Ministers. Can direct CRIs to have regard to any whole of government direction. Crown Research Act 1992 (Legislation website), Companies Act 1993 (Legislation website), Crown Entities Act 2004 (Legislation website).
Crown Financial Institution (CFI). This term is not a legal grouping.  Currently made up of 4 statutory Crown entities and one other statutory entity. Currently none of the CFIs are companies. Have non-commercial functions but operate in a commercial environment. The statutory Crown entities are required to be good employers. The objectives are entity specific. This grouping of entities either pre-fund future expenditure, either for specific liabilities (Government Superannuation Fund Authority[1], Earthquake Commission[1], Accident Compensation Corporation investments[1]) or expected future expenditure (New Zealand Superannuation Fund[1], National Provident Fund). Wholly owned by the Crown, CFIs have one Responsible Minister. Depends on the establishing legislation. For example, the Minister may direct the NPF Board in respect of matters relating to Crown guarantees.
Under the Crown Entities Act 2004 (Legislation website),
ACC and EQC can be directed to give effect to government policy and are subject to whole of government directions.
NZSF, GSF  can be directed to have regard for government policy and are subject to whole of government directions.
EQC, ACC, GSF and NZSF are subject to the  Crown Entities Act 2004(Legislation website), and their individual establishing  legislation. NPF is subject to its own legislation National Provident Fund Restructuring Act 1990 (Legislation website).
Air New Zealand Company publicly listed Fully commercial environment. To be a successful business. Crown is a majority shareholder. No power to direct. Companies Act 1993 (Legislation website)
Airports Company.The four airports are known as council controlled trading organisations. Not fully commercial with multiple objectives. Achieve both its commercial
and non-commercial objectives while aiming to make a profit.
Crown has various levels of shareholding. No power to direct. Local Government Act 2002 (Legislation website), Companies Act 1993 (Legislation website)
Other Crown entity companies e.g Television New Zealand, Radio New Zealand, New Zealand Venture Investment Fund Company. Not fully commercial with multiple objectives, while exhibiting a sense of social responsibility and being a good employer. The objectives are entity specific. These objectives can contain a mix of social, cultural, public policy and commercial statements. Wholly owned by the Crown, these companies must have two or more Shareholding Ministers. Shares in a Crown entity company may only be held by Ministers. Depends on the legislative framework the entity is operating under. Each entity may also have its own legislation and / or a constitution, Companies Act 1993 (Legislation website), Crown Entities Act 2004 (Legislation website). Each entity may also have its own legislation and / or a constitution,
Companies listed on the 4th schedule of the Public Finance Act 1989 e.g Crown Fibre Holdings These companies are also known as other Crown entity companies. Not fully commercial and/or with multiple objectives. The objectives are entity specific. These objectives can contain a mix of social, cultural, public policy and commercial statements. Majority/wholly owned by the Crown, with a lighter accountability regime than Crown owned or Crown entity companies. Depends on the specific framework the entity is operating under. Companies Act 1993 (Legislation website), Public Finance Act 1989 (Legislation website)
Statutory Crown entities
e.g.  Public Trust and New Zealand Lotteries Commission plus the CFIs mentioned above excluding the National Provident Fund.
Not companies. Not commercial, however, some may be operating in a commercial environment with a specific requirement of being a good employer. The objectives are entity specific. These objectives can contain a mix of social, cultural, public policy and commercial statements. Wholly owned by the Crown, these entities have one Responsible Minister. All are subject to whole of government directions.
Crown agents  can be directed on government policy..
Autonomous Crown entities  must have regard for government policy. 
In relation to Independent Crown entities, the Responsible Minister has no power to direct unless specified in the entities’ establishing legislation.Generally speaking for these entities, the ResponsibleMinister’s power to direct will depend also on the specific establishing legislation for each entity.
Each entity usually has its own establishing legislation and the
Crown Entities Act 2004 (Legislation website) also applies.  The establishing legislation can expressly modify or negate provisions of the Crown Entities Act 2004.

Notes

  • [1] Statutory Crown entities.
  • [2] Most companies will also choose to have a constitution that provides further information on rights and responsibilities of shareholders.