Crown Company Monitoring Advisory Unit (CCMAU)
Executive Summary
During 2007/08, CCMAU has continued to take a leadership role in the ownership monitoring of the wide range of SOEs, Crown companies and entities in its portfolio. The performance of these companies and entities contributes to the Government's economic transformation priority theme.
These companies and entities have faced a number of challenges and issues in the last year, and CCMAU has been at the forefront of assessing and advising shareholding Ministers on many of them.
CCMAU assisted Ministers in implementing a corporate social responsibility framework for SOEs. We also assisted Ministers to reinforce their ownership expectations for SOEs and CRIs, with the issue of revised Owner's Expectations Manuals for both SOEs and CRIs in October 2007. These are available publicly on CCMAU's website www.ccmau.govt.nz
We also implemented a set of non-financial performance indicators to enable the Government to measure the contribution CRIs make to the wider economy. Our Appointments and Governance team continued to identify skilled directors for Ministers to appoint to the boards of the companies and entities we monitor. Furthermore, we have cemented our relationship with Massey University's Graduate School of Business to provide our governance training programme.
It is a testament to the skill and standing of our staff that, when they leave CCMAU, they often move into responsible positions elsewhere. Whilst we have lost some experienced staff to the private sector this year, we were able to recruit a number of new staff with relevant skills and experience to ensure Ministers' expectations continued to be met.
The opportunity continues to exist for CCMAU to enhance its ownership monitoring role, building on current expertise to more effectively address the Government's wider ownership objectives.
What we do
Our mission
CCMAU aims to be the New Zealand Government's ownership advisor of choice in the provision of commercial and wider ownership advice.
Our purpose
CCMAU provides services in the following areas:
- Monitoring - reporting on business plans, company reports, performance against targets and sectoral trends.
- Ownership advice - advising on strategic issues, investment and diversification opportunities, restructuring issues and the impact of policy decisions.
- Ministerial servicing - managing issues and drafting replies to correspondence, parliamentary questions and Official Information Act requests.
- Governance - identifying and screening potential directors, managing appointment processes and promoting best-practice corporate governance of Crown companies and entities.
Relationship with the Treasury
The Executive Director of CCMAU is directly accountable to the Secretary to the Treasury for the Crown's investment in CCMAU, and for CCMAU's performance in providing the output classes Ministers seek.
The Year in Review
CCMAU has contributed to a wide range of activities and initiatives this year. The key achievements in each sector were:
| Proposed Activity | Progress |
|---|---|
| Implement a set of indicators to measure CRIs' engagement with industry, the ways in which they apply their research findings and the impact those activities are having on New Zealand's economy, environment and society. | The CRIs reported on the “research application indicators” for the first time. Some minor changes were made for ongoing reporting. |
| Administration of CRI Capability Fund. | This is an ongoing activity which includes annual collection and validation of CRI data. |
| Articulate shareholders' best-practice governance expectations and circulate them to boards. | Revised Owner's Expectations Manual for CRIs was released in October 2007. |
| Expect New Zealand Venture Investment Fund Ltd (NZVIF) to complete the allocation of its $100 million under the Venture Investment Fund (VIF) programme and to continue implementation of the new Seed Co-investment Fund (SCIF) programme. | NZVIF continued to implement the SCIF programme. The target of $100 million was not reached as private sector raising of matching funds proved challenging. |
| Proposed Activity | Progress |
|---|---|
| Ensure SOE strategies are developed, and significant investments made, with SOEs fully informed of shareholder expectations. | CCMAU evaluated various business cases for new investments and provided advice to Ministers on them. |
| Complete long-term ownership policy reviews of Genesis Power Ltd (Genesis) and Kordia Group Ltd (Kordia). | Completed. |
| Resolve review of organisational options for AgriQuality Ltd (AgriQuality) and Asure New Zealand Ltd (Asure). | Completed, with the organisations merging to become AsureQuality Ltd on 1 October 2007. |
| Oversee Kordia and TVNZ's roles in the introduction of digital terrestrial television (DTT) in New Zealand. | The DTT platform, which covers 75% of New Zealand's population (in nine cities), was launched in April 2008. |
| Create an environment where each SOE will perform at a level that fulfils their requirement under the SOE Act 1986 to operate as a successful business, including to be: as profitable and as efficient as comparable businesses not owned by the Crown; a good employer; and an organisation that exhibits a sense of social responsibility. |
Published on CCMAU's website the results of private sector equity analysts' assessment of the value and projected performance of Genesis, Meridian Energy Ltd (Meridian) and Mighty River Power Ltd (Mighty River Power). Implemented a corporate social responsibility framework for SOEs, as agreed by Cabinet. |
| Articulate shareholders' best-practice governance expectations and circulate them to boards. | Revised Owner's Expectations Manual for SOEs was released in October 2007. |
| Proposed Activity | Progress |
|---|---|
| Focus on core appointments activity. | Individual appointments and reappointments for SOEs, CRIs and other entities completed. |
| Expand initiatives to support directors after appointment. | In partnership with our new governance training provider, Massey University's Graduate School of Business, ran three core programmes for aspiring and recently-appointed directors. Also held a series of professional director updates for serving Crown directors, including a full-day programme on corporate social responsibility. |
| Review current director fees' levels against market benchmarks. | Completed. |
| Articulate shareholders' best-practice governance expectations and circulate them to boards. | Revised Owner's Expectations Manuals for SOEs and CRIs were released in October 2007. |
| Maintain strong relationships with other (national and international) agencies that have monitoring/appointment and governance functions. | CCMAU has continued its “lead agency” role in the International Network of Government Ownership Agencies (INGOA) including the organisation of the INGOA conference, which was held in London, England during September 2007. |
| Use our expertise to help with board appointment processes and governance expectations for non-commercial government entities. | CCMAU has assisted other agencies with board nominations from time to time. |
Maintaining and Developing Capability
CCMAU's reputation and ability to meet the expectations of Ministers and key stakeholders is very dependent on the skill and experience of its staff and their ability to manage relationships with a wide range of contacts. During the year we continued to pay attention to making CCMAU a desirable place to work and to provide staff with the training and resources necessary to do their jobs well.
Over the past four years, measures of staff statistics and satisfaction have been as follows:
| 2007/08 | 2006/07 | 2005/06 | 2004/05 | |
|---|---|---|---|---|
| Women (FTEs) | 8 | 8 | 6 | 6 |
| Men (FTEs) | 11 | 12 | 14 | 14 |
| Total staff (FTEs) | 19 | 20 | 20 | 20 |
| Staff satisfaction index | Survey deferred | 69.5% | 72.7% | 69.7% |
| Staff turnover | 31% | 29% | 15% | 30% |
| Average length of service (years) | 3.79 | 3.80 | 3.49 | 2.74 |
Murray Wright
Executive Director
