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Operating the ICR Outlook Discussion: Guidance for Investment-intensive Agencies

About this guidance

This guidance applies to investment-intensive agencies that are subject to the Investor Confidence Rating (ICR) published in Cabinet Office circular CO(19)6 (the circular).[1]

[1]     The circular is available from the Cabinet Office website:


This guidance outlines how the ICR Outlook Discussion operates. It replaces Version 3, which was released in April 2018, and applies to all mid-cycle progress reviews scheduled from June 2020.

Compared with Version 3, the updates are:

Captions provide information that can help users find, navigate, and understand tables.
Version What's changed?
  • Updated timings of the discussions.
  • The guidance now anticipates that investment performance-related discussions, including system expectations will be part of regular discussions with central agencies and/or monitoring departments.
  • It mainstreams the Outlook Discussion where possible in to existing Central Agency discussions and removed the formal written System Performance assessment

This guidance is written by the Investment Management and Asset Performance (IMAP) team in the Treasury.

General enquiries about the information contained in this guidance, not addressed in this guidance or the associated FAQs on the Treasury website, can be directed to [email protected]

Further information

This document is part of a suite of ICR guidance published on the Treasury website at

Figure 1: Suite of ICR Guidance

Figure 1: Suite of ICR Guidance

[1] The circular is available from the Cabinet Office website:

ICR Review

Note that the IMAP team is presently undertaking a review of the ICR. This includes by July 2020 an independent review of the strategic options, followed by detailed redesign in the second half of 2020. As part of the review, feedback will be obtained on:

  1. if the Outlook Discussions continue and if there any changes to the process
  2. the future design of the ICR from Round 3 onwards.

There could be a further revision of this guidance following the ICR Review, but in the meantime, this guidance applies.

About the ICR Outlook

Purpose of the Investor Confidence Rating (ICR)

The ICR is a rating of an agency’s investment management environment. It provides an indication of the level of confidence that investors (eg, Cabinet or responsible Ministers) can have in an agency’s capacity and capability to realise a promised investment result if funding were committed.

It supports Chief Executives and Boards to have an evidence base of their current investment capability and performance, identifies any gaps, and enables them to strengthen their organisation via the improvements identified.

Cabinet’s minimum rating expectation is that each investment-intensive agency achieves a B ICR rating over time.

Purpose of the mid-cycle progress review (Outlook Discussion)

Formal ICR assessments take place on a three-year cycle. At the end of each assessment, agencies obtain an ICR rating along with any recommended improvement items, and/or gaps that need to be addressed.

In 2016, Ministers agreed that halfway through each agency’s ICR cycle there would be “a light-touch review of the actions and progress the agency is making towards improving key aspects of its investment performance” (ie, the Outlook), noting that the next formal assessment would take place within 18 months.

The purpose of the Outlook Discussion is to form a view on whether the agency is making expected and agreed improvement in the way it is managing its investments and/or assets. Additionally, it allows relevant parties to determine what additional support (if any) needs to be provided to ensure the improvements are successfully and sustainably delivered.

Possible actions arising from the Outlook Discussion may include advice or agreement on, further improvement action/s, facilitating access to relevant expertise in other agencies, or providing targeted central agency and functional lead support.

Target audience for the results of the Outlook

Depending on the agency, stakeholders with an interest in the agency’s Outlook can include Ministers, Boards, departmental chief executives, the agency’s ICR sponsor, monitoring departments and various central agency and functional lead teams.

Potential implications arising from the mid-cycle review

The result of the review does not affect the agency’s current ICR rating or Cabinet-approved arrangements arising from the current rating.

The practical effect is that stakeholders will be aware of the Outlook and may use it to adjust their monitoring activity or the way they engage with the agency.

Limitations of the mid-cycle review

The mid-cycle review does not have the level of rigour or evidence of a full ICR assessment. The primary purpose is to provide an opportunity for the exchange of information between relevant parties on the agency’s performance trajectory, and a forum to discuss performance improvement and whether any support is required.

The amount of effort required to inform the mid-cycle progress review may vary between agencies depending on factors such as the breadth and intensity of ICR-related improvement activity and the extent to which relevant performance information is generated routinely (eg, for Boards or internal leadership and governance groups).

Following the exchange of relevant information and discussion, any actions will be captured and progressed by relevant parties.

Timing of review and reporting activity

The mid-cycle progress review (Outlook) takes place about 18 months after Cabinet approves the agency ICR rating. The timings for mid-cycle reviews between Round 2 and 3 are:

Captions provide information that can help users find, navigate, and understand tables.
IRC Tranches (Round 2) Month of Cabinet approval Agencies Timing of mid-cycle progress review
Tranche 1 October 2018
  • Southern DHB
  • Ministry of Social Development
  • Ministry of Defence
  • Housing (Kāinga Ora – Homes and Communities)
  • NZ Transport Agency

From June 2020 (COVID-19 impacts may mean these are much later)

Tranche 2

August 2019

  • Accident Compensation Corporation
  • Ministry of Education
  • Inland Revenue
  • Department of Corrections
  • Ministry of Justice
  • New Zealand Police

From February 2021

Tranche 3 December 2019
  • Auckland DHB
  • Canterbury DHB
  • Counties-Manukau DHB
  • Waitematā DHB
  • Capital & Coast DHB
  • Waikato DHB

From June 2021

Tranche 4

Delayed from May 2020 due to COVID-19 – new date TBC

  • New Zealand Customs Service
  • Department of Internal Affairs
  • Ministry of Business Innovation and Employment
  • Ministry of Foreign Affairs and Trade
  • Ministry of Health
  • Department of Conservation

From October 2021 onwards

The exact timing and details will be arranged and mutually agreed between each agency, monitors and the Treasury, and COVID-19 impacts will be considered.

Reporting on results

Agencies have discretion over whether to brief Responsible Ministers on the results of the Outlook review.

The Treasury will not routinely report to other parties (eg, Minister of Finance) on the ICR Outlook reviews. However, if any significant concerns about the rate of improvement are made evident during the discussion, the Treasury may brief the Minister of Finance. This would be done in consultation with the agency and central agencies.

Main steps in the mid-cycle review

The figure below explains the main steps in the process.

Figure 2: Main steps in mid-cycle progress review

Figure 2: Main steps in mid-cycle progress review

Scope of Outlook Discussion and review

The Outlook Discussion will be mainstreamed in to existing Central Agency meetings wherever possible, and will be initiated and coordinated by the IMAP team.

Progress review covers all ICR elements

The discussion should:

  • cover all the ICR elements, as the ICR elements are interrelated
  • cover feedback from system leads on factors that may be affecting investment performance
  • be future-focused (under the context that that the next ICR assessment will be in 12–18 months’ time)

The discussion also provides an opportunity to discuss the level of agency awareness and preparedness for any changes in the ICR for the next round.

We expect that the Outlook with focus on the areas the agency prioritised for improvement following its most recent ICR assessment. Ideally, these areas of focus would align with and respond to the system leads commentary at the time of the last ICR assessment, and be set out in a formal agency improvement plan.

The discussion should cover any matters relating to improving the agency’s investment performance, whether from the most recent ICR assessment or carried across from a previous or ongoing improvement programme stimulated by other business drivers.

Inputs to the discussion and review

There are four inputs to the discussion and review process, as follows:

  • A letter or other written statement from the ICR sponsor (executive summary, or report style).
  • Any supporting information the agency wishes to provide to inform the discussion.
  • The discussion itself, and capture of any actions.

Letter or other written statement from the ICR sponsor

This document should represent the agency’s views about:

  • The progress it has made on the ICR elements[2] since the last ICR assessment.
  • Any changes in its approach to setting targets for lag indicators.
  • The likely impact of the current or planned improvement actions it intends to take to improve aspects of investment performance over the next 12 months (ie, that will be assessed through the next ICR) or beyond.
  • Any other factors that may affect future agency (or sector) investment performance.
  • Any particular support or assistance the agency seeks from the system leads, or other parties eg, monitoring agencies.
  • If there are any areas in Cabinet Office circular CO(19)6, or other investment system requirements, that the agency wishes to clarify or are currently having difficulty in implementing.

Currency of information provided by the agency

The information provided in the Outlook needs to be as up to date as practicable, based on the agency’s (and sectors) usual planning and reporting cycles.

Stakeholders know it can take time to embed changes and for these to show up in maturity assessments or actual performance. Consistent with the light-touch approach, there is no expectation that agencies will do any formal reassessments of ICR maturities for the mid-cycle review (for example, commission third party assessments of Asset Management Maturity (AMM) or NZP3M maturity). However, the discussion will be richer if the agency has done some self-assessments (for example Organisational Change Management maturity or AMM).

Information provided by system leads

In the discussion, the system leads will:

  • update their observations on the agency’s performance against the system expectations eg, the system objectives set out in CO(19)6[3])
  • discuss and affirm agency improvements already made
  • gain a better understanding of the agency’s forward improvement plans
  • agree any particular additional support, and
  • outline any changes to the next round of the ICR.

The system leads will capture a record of the discussion, including any actions, within seven days of the discussion.

[2]NB: Cabinet has agreed to stop Four Year-plans and phase out LTIPs in their current form (from after Round 2), but agencies are still expected to have medium to long term plans as per paras 61–63 of Cabinet Office circular CO(19)6.

[3]This is not a formal (ie, written) system performance assessment, it is an exchange of information which should be routinely shared in mainstream and regular discussions between the agency and its investment management system stakeholders (eg, any system performance issues should be raised when they happen).