The number of regulatory agencies has multiplied in recent decades due to a combination of increasing regulatory complexity and an international trend towards devolution.101 In New Zealand, this has seen many central government powers delegated to Crown entities.102 New Zealand’s regulators are differentiated both by institutional form and by governance model. Figure 2, taken from Productivity Commission’s report, helpfully summarises the options for institutional form. The key distinction between the entity types is between departments and statutory Crown entities.
Departments are legally part of the Crown, with the governance arrangements centred on a direct Minister-CEO relationship.103 Statutory Crown entities are independent of the Crown and required to have a board.104 Typically, the board’s role is governance, but in some cases, board members have executive roles. And in some instances, the distinction is acknowledged by board members being described as ‘commissioners’. The Commerce Commission is the best-known example of this.105 The governance arrangements for Crown entities are centred on a Minister-board relationship. This relationship is ‘arm’s length’, and interactions are more formalised than those between a Minister and a department. This means Crown entities
Figure 2: Typology of institutional forms for a government regulator Organisations outside of the state sector
State sector organisations
Departmental
Crown entity
Other
Departments of State (eg, Ministry of Health or MBIE)
Independent Crown entities, where there is a high degree of independence from Ministerial influence (eg, Commerce Commission)
Agencies listed on Schedule 4 of the Public Finance Act 1989 (eg, Fish and Game Council)
Departmental Agencies (none yet)
Autonomous Crown entities, which have an intermediate degree of Ministerial oversight and independence in decision-making (eg, New Zealand Teachers Council) Crown agents, where there is a high degree of Ministerial oversignt (eg, CAA)
Offices of Parliament, which are part of the legislative branch of government rather than the executive (eg, Office of the Ombudsman)
Private organisations vested with some statutory functions (eg, Gas Industry Company Ltd) Organisations established by statute (eg, Medical Council of New Zealand)
Unique organisational forms (eg, RBNZ)
Source: Productivity Commission, “Regulatory Institutions and Practices” (Wellington: Productivity Commission, 2014), 240.
101. 102. 103. 104. 105.
David Coen and Mark Thatcher, “The New Governance of Markets and Non-Majoritarian Regulators,” Governance: An International Journal of Policy, Administration, and Institutions 18:3 (2005), 329–346, 330. Derek Gill, “New Zealand,” in OECD, Distributed Public Governance: Agencies, Authorities and Other Government Bodies (Paris: OECD Publishing, 2002), 133–161, 134. State Services Commission, “Reviewing the Machinery of Government” (2007), 13. Crown Entities Act 2004, s 25(1) and (2). Commerce Act 1986, s 8A(3).
24 WHO GUARDS THE GUARDS?