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Effectiveness and managing organisational health

The Commission has set a main financial measure for the period of this statement of intent, which aligns with the Value-for-Money Development Goal for the State Services.

Preparing for the effects of new law

This Statement of Intent describes several intended reform programmes that are expected to affect the Commission and the scope of its role and functions. (See Legislative Environment page 8). A challenge for the Commission in the term of this Statement of Intent will be to continue to meet its current objectives which making sure it is ready to fulfil its new roles under proposed Government law reforms.

To enable us to manage this effectively we have carried out a project to estimate the likely resource requirements of various new responsibilities. This work has also enabled the Commission to advise the Government on the possible funding implications associated with any such reforms. To address the impact of proposed reforms the Commission has amended its outputs and set an objective to be ready to fulfil its new roles when new laws come into force. As the Commission's new roles are clarified we will continue to estimate the resources needed and keep the Minister and the MED informed of these. This contributes to the Value-for-Money State Services indicator the extent to which decision makers are taking account of longer-term economic and fiscal impacts of government activities.

Risks and risk mitigation

The Commission developed a risk management framework following a study by external consultants in 2004. This identified the key areas of our capability and risks to these. The main risks relate to staff (recruitment, key personnel, and retention) physical event/disaster, reputation, confidentiality of information and knowledge available. The Commission has developed responses to these as described below.

Staff

Staff numbers have increased from 22 in 2002 to 43 in 2008. A risk for the Commission is that it may not be able to recruit suitably qualified staff. The Commission counters this by boosting graduate recruitment, intensifying overseas recruitment, and targeting New Zealand recruitment campaigns effectively. To date the Commission has managed to recruit as required for its increased responsibilities.

We seek to minimise the risks associated with retention of staff by our commitment to being a good employer. The Commission was placed 7th in the small employer category (up to 49 staff) of the Unlimited/JRA Best Places to Work in New Zealand Survey in 2007. It was the only public sector agency in the Top 10 in the small category 2007 and the fourth consecutive year that it was placed in the top 10 small workplaces. We use this to measure our organisational health and our performance as an employer. Staff complete anonymous surveys under the headings:

Our objective over the next three years is to keep our status as a good employer by continuing our values-based culture, maintaining high professional standards, being responsive to staff feedback, and continuing the human resource practices that have proven effective. The Commission will continue to use the Unlimited/JRA Best Places to Work in New Zealand Survey to measure its performance as a good employer.

Physical event/disaster
The Commission's offices are code compliant under section 95 of the Building Act 2004. Our earthquake and disaster plan includes emergency food, water and first aid supplies, staff trained in first aid, and document and IT recovery systems. Some staff have access to the Commission's computer network enabling them to work from home. The Commission has consulted with the State Services Commission on guidance for preparing a Pandemic Plan and assigned staff responsibility for developing it during the period of this statement of intent.

Reputation and integrity
The Commission promotes high ethical standards in the securities markets. If it is to succeed in this, and thereby strengthen confidence in the integrity of New Zealand's capital markets, it is essential that people have confidence in the integrity of the Commission itself.

The Commission must maintain a good reputation both for quality of work and integrity of approach. Much of our work is highly sensitive and confidentiality must be maintained. These risks are managed though the Values and the Code of Ethics we have adopted as an organisation.

The code of ethical standards and behaviour that is expected of Commission Members and staff is published at http://www.seccom.govt.nz/about/code-of-ethics.shtml

The setting and publishing of these values and standards and monitoring compliance by Members and staff align with:

• the Reputation Indicator of Government's Employer of Choice Goal for the State Services; and
• the Trustworthiness Exhibited by State Servants Indicator of Government's Trusted State Services Goal.

Confidentiality of information
To mitigate risks relating to confidentiality of information staff and Members sign a confidentiality agreement when starting work with the Commission. The importance of confidentiality of information is stressed in the recruitment and induction processes. Security around IT systems and files is robust and effective physical security is in place at the Commission's office.

Knowledge available
The Commission's document management and records systems make institutional knowledge available and the induction processes explain how to access these. The Commission's virtual teams work structure is conducive to effective knowledge sharing.

Collaboration on organisational health and capability building

The Commission is collaborating with these agencies for its organisational capability and health initiatives:

• the State Services Commissioner, for its six Development Goals for the State Services; and
• the Equal Employment Opportunities Unit of the Human Rights Commission for its Good Employer Guidance under the National Equal Opportunities Network.

Financial control and acquisition processes

The Commission has policies for expenditure, financial delegations, and acquisitions. The financial delegation policy requires all expenditure to be within set delegations, or subject to prior approval by the Commission. Detailed planning and management procedures based on the Auditor-General's guidelines must be followed for significant acquisitions and for planning and managing litigation expenditure.

After several years of building reserves, the Commission is forecasting deficits for 2007/08 and 2008/09 to fund greater work on its existing class of outputs. The deficits will fund greater operational workloads arising mainly from financial reporting, increasing complexity of matters, international recognition and risk management. A project has been scheduled during 2008/09 to re-estimate the Commission's baseline resource requirements for its existing class of outputs. For litigation fund, the Commission is forecasting a deficit for 2008/09 as it is in a position to fund new litigation using its balance sheet reserves

Takeovers Panel

The Commission provides administrative and support services to the Takeovers Panel in accordance with the Securities Act and under the terms of an MOU. For each financial year the Commission and Panel agree on the level of services required and on the fees to be paid for them. The income received from the Panel and the costs of providing these services are included in the financial statements. Under revised arrangements the Panel is working towards employing its own staff and will be responsible for its staff. When it has secured extra funding, the Panel will relocate to separate premises. This is expected in the 2008/2009 year.

Consultation and reporting to the Minister of Commerce

The Minister of Commerce is the Commission's responsible minister, and the Ministry of Economic Development is the monitoring department.

The Commission acts independently of Government and others except as required by the Securities Act 1978 or the Crown Entities Act 2004.

There are no matters on which the Commission is required to consult or notify the responsible Minister before exercising its statutory functions and powers. However, we work with the Minister and Ministry in accordance with our statutory functions and powers on policy, regulatory matters, law reform and appropriations.

The Commission consults with the Minister on the preparation of the statement of intent, and reports to the Minister quarterly and in the annual report.