Leadership is the key enabler of change in the New Zealand Public Service. We have an opportunity to strengthen cross-system leadership and ensure that we make effective use of the new tools described earlier in this document, whether they are new ways of unifying the Public Service, new ways of planning the future of our workforce, or more effective organisational arrangements for achieving outcomes. Leadership is a key to building a system whose component parts, the departments and other agencies, work together seamlessly to deliver better services, agilely to respond to change, and professionally to support the constitutional role of executive government into the future.

In 2011, the Better Public Services Advisory Group identified leadership as the single most critical driver of successful change in the Public Service. In our system, leadership responsibilities are widely dispersed. All chief executive positions are leadership roles, as are a wide range of senior managerial and professional roles. Functional leads and heads of profession provide leadership across departments for the development of key business functions and key professional groups. The State Services Commissioner’s role involves overall leadership of the system.

Since the State Sector Amendment Act 2013 came into force, we have made progress on Public Service leadership by emphasising and reinforcing the spirit of service, and the ethical base of Public Service. We have also made progress on building alignment between departments through sector leadership, and through the cross-system work of designated functional and professional leads, e.g. the Government Chief Information Officer and the Head of the Policy Profession. The role of the State Services Commissioner has also developed, to emphasise its character as the overall system lead.

All of the changes outlined above have led to improvements in Public Service leadership, and yet significant problems remain. At senior levels of the Service, including among the chief executive cohort, we do not see a sufficient level of flexible deployment between roles and agencies. This is needed to develop the leadership capability of the Service overall, to ensure we are able to cover all critical positions at all times, and to broaden the potential pool of successors to chief executive positions.

The review of the State Sector Act presents an opportunity to transform Public Service leadership. It can clarify and strengthen the roles and functions of our leaders, enable mechanisms for collective responsibility and accountability, and provide for development of the leadership cohort on a Public Service -wide basis. The rest of this chapter outlines leadership proposals that will:

• Improve our ability to deliver better outcomes and services
• Strengthen the role of the Public Service in supporting executive government
• Make the Public Service more agile and adaptive.

In line with these objectives, we propose legislative changes that will support the development of four key leadership groups or roles in the system:

• Public Service senior leaders, by way of a statutory Senior Leaders Service
• Chief executives
• Functional and professional leaders
• The Public Service Commission (currently the State Services Commissioner).

Senior Leaders Service

Leadership development in the New Zealand Public Service

While leadership resides at all levels of the Public Service, the performance of senior leaders is critical to the success of the service. Senior leaders are those who are at the upper echelon of the Public Service but whose position in a particular tier may vary between departments and agencies depending on organisational and job sizes.

The architects of the State Sector Act 1988 recognised the importance of this leadership group. They recognised that the Public Service needed to remain a unified entity and, for this reason, the 1988 Act obliged the Commission and the chief executives to put in place a Senior Executive Service (SES) which would constitute “a unifying force at the most senior levels of the Public Service” and provide a training ground and succession pool for chief executive positions.

The SES did not thrive, with the State Services Commission commenting in 1991 that it “has not realised the promise it offered”. Chief executives regarded it as a distraction from departmental business, and senior public servants themselves regarded the employment conditions that went with SES membership as limiting and confining.

The current context

More than ever, if we are to provide the best possible service to New Zealanders we need a strong, flexible and diverse group of senior leaders who have the ability to operate across a range of roles and contexts. For example, we need to improve the ability of the system to reconfigure in situations such as a change of government. If the system is going to be agile, we need a team of system-oriented, flexible and adaptable leaders.

Of course this will need to be balanced by a recognition that often the performance of agencies does need a core of leaders with long experience and deep knowledge in a particular role or function. However, our judgement is that to date the pendulum has swung too far in that direction and greater mobility and flexible deployment is needed for the development of system leaders.

Our ambition is to strengthen leadership capability across the Public Service by creating and implementing a system of leadership development that is integrated, structured and deliberate. Although we are making progress, we are not yet seeing the shifts in leadership capability that we need, and we know that we need to do more. Barriers to progress include:

• The necessity of relying on soft levers and voluntary co-operation of chief executives and other leaders when mobilising senior leaders around complex cross-agency problems
• Leaders being recognised, rewarded and incentivised to deliver agency results rather than system outcomes
• Variations in conditions of employment across agencies acting as a barrier to mobility across the system
• Movement for development tending to be temporary and ad hoc, not fully addressing system and department needs to organise around citizens and outcomes.

As the Public Service increasingly organises itself around shared problems, we are looking to build a unified team of senior leaders who can move to where they are needed the most, while also developing their leadership capability. We propose to establish a Senior Leaders Service (SLS) model in the Act, to support:

• A unifying culture of spirit of service throughout the Public Service with shared values, ethos and ways of working
• A modern, agile and adaptive system able to meet critical needs within individual agencies and across the Public Service, and deliver better services and citizen-centred outcomes
• Strong and capable leaders who are flexible, adaptable and able to operate effectively across a diverse range of roles and contexts.

Proposal to establish a Senior Leaders Service model in legislation

The purpose of the SLS will be to support:

• A unifying culture of spirit of service throughout the Public Service with shared commitment to the purpose, principles and values of the Public Service
• A modern, agile and adaptive system able to meet critical needs within individual agencies and across the Public Service, and deliver better services and citizen-centred outcomes
• Strong and capable leaders who are flexible, adaptable and able to operate effectively across a diverse range of roles and contexts.

Chief Executives

The chief executives as a system leadership group

Chief executives of Public Service departments are our most senior leaders. Following the 2013 amendments to the State Sector Act, chief executives now have statutory responsibilities for both their individual departments, and how responsive their departments are to collective interests. Stewardship and collaboration are at the heart of senior leaders’ expectations to support the system-wide achievement of results. They require senior leaders to actively plan for and manage people and resources for the collective good and over the medium to long-term, both within their agencies and across the system.

Strengthening the collective responsibility and accountability of chief executives

We propose that the Act in future explicitly includes the concepts of collective responsibility and accountability. Responsibility and accountability are frequently used interchangeably, but they do have distinct meanings. Responsibility is often expressed as having a ‘sense of responsibility’, and indicates a moral or normative approach. Accountability is stronger, as it incorporates a requirement to make decisions, report and face consequences.

Making responsibility or accountability collective means applying the approach to more than one person. For example, collective responsibility may require a group of individuals to model a certain behaviour, while collective accountability requires individuals to take ownership of decisions made collectively.

The concepts of collective responsibility and accountability do not appear in the 1988 Act. We consider that statutory provision of collective responsibility and accountability is needed for two reasons:

• ensuring responsibility of all chief executives for collectively ensuring the health of the system, including such things as modelling the values and principles of the Public Service and designing and implementing strategies to improve the performance of the Public Service
• allocating shared accountability to smaller groups of chief executives (and entities) to achieve particular government priority outcomes and/or implement citizen-centred services across a group of agencies. This is a key element in the operation of the Executive Boards proposed above.

We propose to include in the Act an overarching reference to the collective responsibility and accountability of chief executives. This could be achieved by, for example:

• including collective responsibility for ensuring the health of the Public Service overall
• including a duty to act in the collective interests of the Public Service
• including reference to collective responsibility and accountability in chief executives’ conditions of employment.

Given the important role chief executives play in the Public Service, this proposal could have significant impacts on how the system functions e.g. by requiring chief executives to make more frequent or significant trade-offs between the needs of a department and the system as a whole.
Whatever requirement for collective accountability is included in the Act, chief executives will retain their current responsibilities and their accountability to their Minister/s for results. We expect that the majority of decisions will continue to be made by, or in respect of, individual agencies.

Proposal to strengthen the collective responsibility and accountability of chief executives

We propose to include an overarching reference to the collective responsibility and accountability of chief executives in the New Zealand Public Service Act, for example by:

• including collective responsibility for ensuring the health of the Public Service overall
• including a duty to act in the collective interests of the Public Service
• including reference to collective responsibility and accountability in chief executives’ conditions of employment.

Strengthening the requirement for collective system leadership

Great Public Service leadership is not just about individuals, it is about high-performing teams of senior leaders who are able to work together for the benefit of the system as a whole.

The Commissioner currently convenes the State Services Leadership Team (SSLT), which includes all core Public Service chief executives plus the chief executives of the New Zealand Defence Force, New Zealand Police, the Accident Compensation Corporation, the New Zealand Transport Authority, New Zealand Trade and Enterprise and Housing New Zealand. The SSLT collectively owns and commits to work on the system to deliver better services and results for New Zealand and New Zealanders. SSLT members:

• Support the government of the day
• Steward the integrity and capability of the Public Service
• Carry and model the culture of the Public Service, and
• Take pride in the Public Service and promote it to Ministers and the community.

This model works well as far as it goes, but the reform of the State Sector Act provides an opportunity to strengthen system leadership by requiring senior system leaders to work together to provide system stewardship.

We propose to strengthen the requirement for collective system leadership by placing a duty on the Commissioner to convene the chief executives as a Chief Executives’ Team and work with them to deliver stewardship of the system, its performance and its delivery. As set out above chief executives will have an equivalent duty to work with the Commissioner and other system leaders to deliver stewardship of the system, its performance and its delivery.

We propose that the legislation place a duty on the Commissioner to convene the chief executives as a Chief Executives’ Team, and work with them to deliver stewardship of the system, its performance and its delivery. Chief executives will have an equivalent duty to work with the Commissioner and other system leaders to deliver stewardship of the system, its performance and its delivery.

Functional and Professional Leads

The decentralised approach of the State Sector Act works well for most government activity most of the time, but presents obstacles to achieving a range of government objectives where:

• Collaboration between departments is needed to achieve cross-cutting government priorities, and/or
• A collective basis is the most effective way of developing organisational capability and skills.

One way to address these issues is through cross-system, horizontal leadership roles. In the last few years, we have used these types of roles to improve the ability of the system to provide better services for New Zealanders and achieve the results sought by government. In the main, two types of horizontal leadership roles have been used: functional leads and professional leads.

Functional leads exist to promote excellence in how the Public Service performs in an aspect of its business. Currently there are five functional leads with roles relating to:

• Digital technology: the Government Chief Digital Officer
• Data and data analytics: the Government Chief Data Steward
• Government procurement
• Government property
• Occupational safety and health

Professional leads (known as heads of profession) are responsible for developing the capability of core professional groups on which the Public Service depend. Currently there are five heads of profession roles:

• Legal
• Policy
• Finance
• Human Resources
• Communications.

The State Sector Act does not explicitly provide for functional and professional leads, which has led to a lack of consistency in the creation of roles, their mandate and funding, and the way they operate. Ministerial responsibility, where it exists, is dispersed across portfolios.

While functional and professional leads already exist in practice, the reform of the State Sector Act gives us the opportunity to formally recognise their role and maximise the collective benefit to the Public Service of their work. This will lead to system-wide benefits in terms of efficiencies, improving services and service delivery, and developing expertise, capability and continuity.

We propose that the Act provides for and defines the roles of functional and professional leads, and empowers the Commissioner to appoint functional and professional leads at the level of a chief executive. These system leads will have powers to publish guidance and standards, which may, subject to Ministerial agreement, have mandatory effect within the Public Service.

Proposal for strengthening the value of functional and professional leads

We propose that the Act:

• Empowers the Commissioner to appoint functional and professional leads at the level of a chief executive, and
• Includes a definition of the role of functional and professional leads.

The Public Service Commissioner and Deputy Public Service Commissioner

The main thrust of the reform objectives is to consolidate the Public Service as a permanent, unified institution, with a statutory purpose and a set of statutory principles and values. We also propose that the term Public Service replace State Services and that the scope of the future Public Service expand beyond departments to include other organisational forms (at least for the purpose, principles and values of the Public Service).
In view of this, is it appropriate that the State Services Commissioner be renamed the Public Service Commissioner or Commissioners if the legislation provides for more than one.

Proposal for the designation of the Commissioner

Change the designation of the officer from “State Services Commissioner” to “Public Service Commissioner”

Role of the Public Service Commission

The role of the Commissioner was included in legislation for the first time in 2013, when new section 4A was inserted in the State Sector Act. Prior to that time, the provisions concerning the Commissioner delved straight into a list of principal functions and associated powers. But the Commissioner’s role is more than a list of statutory functions and powers.

The theme of leadership is inherent in the role of the Commissioner. Arguably, it was part of the raison d’être for the existence of the role, although leadership was not mentioned explicitly in the Hunt Report that led to the original Public Service Act 1912. The Hunt Commission recommended setting up a Board of Management, subject to review by Cabinet, as the managing head of the whole Government Service. The Hunt Report stated “it is to our mind essential that there should be one controlling head ... to hold the whole Service together, and make it work as one well-oiled and efficient machine”.

During the past half century, leadership has been called for explicitly. In 1962, the McCarthy Commission called for the Public Service Commission’s role: “to be changed and strengthened so that it can, and will, become the chief adviser to the Government on matters of Government administration.” The McCarthy Commission thought the Public Service Commission should be “charged with, and indeed exercising, the wider responsibilities needed if it is to provide dynamic and imaginative leadership in a changing world” (ch. 43-44).

The 2001 Review of the Centre included recommendations to enhance the Commissioner’s ability to provide leadership to State sector organisations beyond the Public Service. This led in 2005 to the first extension of some of the Commissioner’s statutory functions to agencies beyond the core Public Service, notably the mandate to issue a code of conduct to major parts of the State services, along with associated advice and guidance, and powers of investigation.

Leadership was central in the 2011 report of the Better Public Service Advisory Group. For example, in its final report the Group said:

“[t]he single most critical driver of successful change is leadership”
“Starting from the top, the Group considers that the State Services Commissioner needs to be unambiguously charged with leading the leaders: a clearly mandated Head of State Services”

In this capacity, the Commissioner would be “accountable for overall performance of the state services and empowered to”:

• appoint sector leads
• determine functional system-wide leadership roles and appoint chief executives into these roles
• deploy chief executives and second and third tier leaders to critical roles across the system”.

The Better Public Services Advisory Group’s recommendations for the Commissioner’s leadership role were not fully incorporated into the State Sector Act amendments in 2013. Some aspects of what a Head of State Services would be responsible for were included in the long list of activities that make up the role set out in section 4A of the State Sector Act, as well as in the revised set of principal functions articulated in section 6.

We propose that the Act set out in a simple statement the role of the Public Service Commissioner.

Proposal for the role of Public Service Commissioner

We propose that the Public Service Commissioner is the leader and head of the New Zealand Public Service.

This formulation reflects that:

• providing leadership is at the core of the Commissioner’s role
• the leadership influence extends to the whole Public Service (however that is defined), and
• it is the Commissioner’s role to lead the Public Service in the service of the New Zealand public through the Government and Parliament.

The role of the Commissioner in relation to government formation

When New Zealand adopted MMP in 1996, a process was agreed by which negotiating parties could gain access to the Public Service for information during the government formation process. This process is outlined in the Cabinet manual.

Currently, the Prime Minister is responsible for setting the rules around the role of officials in the government formation process. The Prime Minister invites the Commissioner to lead the process. The Commissioner, working closely with the Department of the Prime Minister and Cabinet and the Treasury, is then responsible for maintaining the political neutrality of the State services while ensuring negotiating parties receive relevant information from the State sector. The Commissioner exercises this role by:

• Issuing guidance for the State sector on appropriate conduct for officials during the government formation process, and
• Coordinating the process of officials providing information to political parties, which involves providing a single and neutral contact point for receiving requests for information and maintaining oversight of responses.

We propose to make the role of the Commissioner in the government formation process explicit in the Act. This would provide a greater degree of certainty for all actors involved in the process, and remove the possibility that rules could be put in place that might unduly favour an incumbent government.

There is a relationship here with the Independent Fiscal Institution proposal. The SSC will work with the Treasury to ensure that both proposals work together in a mutually reinforcing manner.

Functions of Commissioner

At present, the Commissioner’s functions are dispersed in a disjointed way throughout the State Sector Act, with several overlaps and duplications. We propose that the Act in future set out the Commissioner’s functions in a more streamlined and rationalised manner. This should be achievable by –

• including up-front a succinct statement of the Commissioner’s principal function, and
• grouping the Commissioner’s functions within the relevant part of the Act that deals with a specific matter, rather than dispersing one function across various parts of the Act.

The single, overarching function must give effect to the Commissioner’s proposed role as the leader and head of the Public Service as a whole.

Each Part of the Act would then co-locate the relevant existing functions and include any additional functions that may arise from this consultation process.

Proposal for the principal function of the Public Service Commissioner

(1) The Public Service Commissioner’s principal function is to lead the Public Service in accomplishing its purpose, adhering to its principles and practising its values.
(2) To that end, the Commissioner shall promote excellence and efficiency in the performance of the Public Service as a whole and in its component parts by exercising the responsibilities, functions and powers –

(a) in Part 2 in relation to …
(b) in Part 3 in relation to …etc.

Powers of the Commissioner

The Commissioner has a specific set of powers as the statutory officer currently called the State Services Commissioner.

The State Sector and Crown Entities Reform Bill, currently before Parliament proposes a number of changes to the Commissioner’s powers. The Bill was introduced to Parliament on 12 February 2018, and is due to be reported back to the House by the Governance and Administration Committee by 20 August 2018.

In relation to the Commissioner’s powers, the Bill will:

• modernise the Commissioner’s investigatory powers by bringing them under the ambit of the Inquiries Act 2013
• provide for the uniform exercise and application of the powers irrespective of who initiates them (i.e. whether a direction or request by the Prime Minister, a responsible Minister, or the head of any part of the State services, or the Commissioner’s own motion in relation to integrity-related investigations).

We do not intend the review of the State Sector Act to impact on the changes provided for in the State Sector and Crown Entities Reform Bill, and we are not proposing any changes to the Commissioner’s overarching, generic powers set out in the Appendix. However, the process of this general review of the State Sector Act has highlighted some areas where there may be a need to provide the Public Service Commissioner with greater leverage than exists under current legislation. These are set out below.

Ethics and Integrity

The Public Service is regarded as one of the most honest and transparent in the world. We plan to keep it that way. The State Services Commissioner is responsible for setting standards of integrity and conduct across most of the State services. Maintaining high standards builds public trust by supporting institutional integrity and the trustworthiness of State servants.

The Commissioner has a series of graduated options at their disposal in relation to promoting and reinforcing high standards of integrity and conduct in the State services. These begin with guidance, then move up to setting minimum standards, then step up markedly in severity to advising responsible Ministers of serious ethics / integrity breaches and investigating matters of integrity and conduct.

In between the options, there is a gap in the Commissioner’s mandate to set expectations and then more formally to direct agencies on specific integrity matters.

We propose that the Act broadens the scope for the Commissioner to issue instructions and require agencies to follow them on integrity and conduct matters. This would apply to those agencies in respect of which the Commissioner can currently set, issue, apply and enforce a Code of Conduct. For instance, the Commissioner could:

• Set expectations on speaking up (e.g. whistleblowing) and the environment to encourage people to speak up
• Require agencies to institute a proactive release policy.

Appointment of the Public Service Commission

From 1913 to 1989 the State Services Commission was headed by a multi-member Commission of up to four Commissioners. At all times, the Commission was headed by a chief or principal Commissioner, or “Chairman”, assisted by others. Since the passing of the State Sector Amendment Act (No. 2) 1989, there has been a single Commissioner appointed together with a statutory Deputy State Services Commissioner who may exercise all the Commissioner’s functions, duties, and powers, subject to the Commissioner’s control, and automatically steps in and exercises them if the office of Commissioner is vacant for any reason, or if the Commissioner is absent from duty for any reason.

Historically the decision as to whether to have a single Commissioner or a multi-member Commission has been influenced by three important considerations. One is the need to ensure that sufficient skills and expertise are brought to bear on the role given its size and complexity.

Consequently, the original reason for a multi-member Commission was to provide a broad range of experience and expertise for the Commission’s role as the employer of all public servants. A multi-member Commission enabled a high volume of administrative decision-making.

Today’s context is different from when the Commission was primarily responsible for appointing, promoting, classifying, grading, or dismissing public servants. As discussed earlier in this chapter the Commissioner’s role today is all about leadership at the system level. This consideration of effective and accountable leadership forms a rationale for having a single Commissioner. Leadership by committee tends not to be as effective as is needed now.

In 2011, the Better Public Services Advisory Group had called for the Commissioner to be designated formally as Head of the State Services, in part to “provide the Prime Minister and Ministers with a single point of reference to ensure that the state services respond quickly and decisively to ministerial priorities and overall system performance”. In 2013, amendments to the State Sector Act specified that the role of the Commissioner included providing “leadership and oversight of the State services”.

A third consideration concerns the desirability of placing a check and balance on the exercise of the statutory powers of the role. Throughout the history of the Public Service there have been statutory provisions in place to ensure that the Commissioner is able to work independently of Ministers. The current provision in the State Sector Act is section 5 which provides that the Commissioner shall not be responsible to the Minister for how he or she carries out key functions under the Act. A single Commissioner, appointed for a relatively long term, is a way of enhancing the leadership of the role and the independence of Ministerial influence that is at the heart of our politically neutral, merit based Public Service. However, there may be a concern to provide a check on the exercise of this degree of independence.

To aid discussion of this issue we provide below three options for the constitution and appointment of a Public Service Commission or Commissioner.

• Option One is designed to emphasise the independence and leadership orientation of the role.
• Option Two introduces the concept of a multi-member Commission to bring a more extensive body of skills and experience than a single Commissioner can have.
• Option Three provides a check and balance on the exercise of powers by a single Commissioner.

Across these options there are permutations available in terms of appointment terms. In the case of any multi-member arrangements we consider that staggered appointment and expiry of members’ terms will be needed to provide continuity.

Option 1: Enhanced status quo that emphasises leadership and independence

The independent leadership of the Commissioner and Deputy Commissioner could be strengthened by:

• introducing appointment for a single term of five years, but making it renewable
• retaining appointment by the Governor-General on the recommendation of the Prime Minister
• adding a new element by including a requirement for consultation with the Leader of each party in the House of Representatives before a recommendation is made to the Governor-General
• conferring on the Deputy Commissioner the same status and rank as a departmental chief executive, to reflect the Deputy Commissioner’s existing statutory ability to exercise all of the functions, duties, and powers of the Commissioner.

The above changes are not a package, and not all need be adopted to strengthen independent leadership.

Option 2: Commission with specified roles

An alternative is to institute a Commission with several members, but with clearly specified roles that retain a Chief Commissioner as the ultimate decision-maker. This option would aim to ensure a strong collective of knowledge, skills and experience. Membership could include:

• Chief Commissioner (however called): sole authority to exercise all of the Commission’s functions, powers, and duties. Possibly appointed for a single term of 7 years, non-renewable (though other appointment terms could also be considered).
• Deputy Commissioner: power to act if the Chief Commissioner is incapacitated or absent from duty for any reason. Appointed for a term up to 5 years, able to be renewed.
• One or two other Commissioners: role is to assist the Commissioner, under the Commissioner’s control. Expected to have delegated responsibility for specified matters. Appointed for a term up to 5-years, able to be renewed.

Option 3: Chairperson model

This option would aim to introduce an explicit element of check and balance in the Commission’s operations. It would aim to introduce more of a consensus oriented mode of operation, but with a ‘casting vote’ if required. Membership, and their terms of appointment could be similar to Option 3:


• Chairperson: casting vote/final determination if required
• Deputy Chairperson: power to act if Chairperson incapacitated or absent from duty for any reason.
• One or two other Commissioners.

Chief executive of the Public Service Commission

Regardless of which option or combination of options above is chosen we believe that there should be provision in legislation for a separate chief executive for the Commission. Currently, the State Services Commissioner is legally required to be the Chief Executive of the State Services Commission.

The ability to transfer a chief executive, or else appoint another person, to the position of Chief Executive of the Commission would provide an additional avenue of support and flexibility to enable the Commissioner or Commissioners to focus on the outward facing purpose, principles and values of the Public service as a whole.

While this arrangement would not be prohibited by the State Sector Act, it would not be mandatory or automatically expected.

Proposals related to the Chief executive of the Public Service Commission

We propose that the Act clarifies that the Public Service Commissioner can:

• separate the role of Chief Executive of the Public Service Commission from the Commissioner’s role by establishing it as a separate position, and
• fill the position of Chief Executive of the Public Service Commission by:
• transferring an existing chief executive, into the position, or
• appointing another person to the position through an application process.