New code of conduct issued for Crown entity board members - Will this stop elected District Health Board members from criticising the Government’s reforms?

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Introduction

On the eve of the announcement that all district health boards (DHBs) are to be scrapped Public Service Commissioner, Peter Hughes, used his power under section 17(3) of the Public Service Act 2020 to issue a new code of conduct for Crown entity board members (Code).

The Code, which came into force on 19 April 2021, expressly requires all Crown entity board members to ‘act in a politically neutral manner’. For the most part Crown Entities – to whom this Code applies – have Government appointed Boards who perform functions set out in statute and on instructions articulated in Ministerial Letters of Expectation. But the DHBs, with their elected members representing community interests and the promises they campaigned on, are different. For them, the Code creates a potential tension between the duty to remain silent and their elected obligation to speak up on issues that affect the delivery of health services to their constituents. Board members will undoubtedly have strong views on the likely impact on their local districts of the Government’s intended centralisation of health services but the new Code limits what they can say about it.

Key Points

  • Peter Hughes says the Code imposes no new obligations. The Crown Entities Act 2004 already requires Board members to comply with the relevant entity’s founding Act and imposes individual duties on each member that are owed to the responsible Minister and the entity itself. But the Code is much more blunt in its expectations that individual members will keep silent on the politics of any decision.
  • Elected DHB members have rights and freedoms under the NZ Bill of Rights Act (NZBORA) which cannot be easily removed by a Code made through the statutory powers of the Public Services Commissioner.
  • The health reforms are wide-ranging and will be controversial. A key platform is the removal of all DHBs and the elected members who serve on them. With control of all health spending and all planning for provision of health services to be centrally based, it is only to be expected that local members will have ‘political’ views on what this will mean for their community. Local communities are entitled to expect that they will speak up.

Background

The Code requires, among other things, that Crown entity board members must:

  • Act in a politically impartial manner;
  • Not make political statements or political activity in relation to the functions of the Crown entity; and
  • Discuss with the Chair any proposal to make political comment or to undertake any significant political activity.

The Code also states in its footnote that:

‘These provisions apply to elected board members in the same way as to appointed members. However elected board members have a relationship with their constituency in addition to their accountability to the responsible Minister. Elected Board Members must consider how to maintain that relationship while, as for all members, ensuring their actions do not jeopardise the effective governance of the entity.’

The Code can be found here.

The Code’s potential effects

Peter Hughes is on record saying in respect to the Code:

‘It has nothing new that board members were not already required to uphold under applicable laws or existing expectations.’

However, that somewhat gilds the lily. Before this Code was issued there was no specific guidance on how elected Crown entity board members should behave. DHB members were permitted to use their judgement as to what they could appropriately comment on publicly and many frequently spoke up.

The role of an elected DHB member

DHB members are not as overtly political as other elected individuals such as MPs or local councilors. But politics still plays a part in either their election or the issues that they choose to champion. In many cases, DHB members are certified health professionals or politicians elected on particular platforms or causes.

To take the discrete example from the Capital and Coast DHB 2019 elections, of the seven people elected:

  • 3 are career politicians;
  • 3 are health professionals; and
  • 1 is an independent with previous governance experience.

Far more so than other unelected Crown entity boards, DHBs make decisions which directly affect the lives of individuals in a particular community. At the same time as every Board member owes duties to the Health Minister, they also owe a duty to their constituents to act in their interests. Local communities are entitled to expect their local DHB members to speak up fully and freely in their interests, particularly given the complexity of the issues involved. Particularly in those districts a long way away from either Wellington or Auckland, local communities may be suspicious about having health priorities set so far from home. Those communities will likely look to their local Board members for reassurance and advocacy. If and when they do Board members will find themselves uncomfortably straddling competing obligations. The new Code makes that more problematic.

That said, the NZBORA protects a person’s right to freedom of expression. This right is critically important for elected officials, in either central or local government. The State Services Commissioner cannot extinguish a DHB member’s rights under the NZBORA with delegated regulation.

Final thoughts

The proposed reforms will take some years to implement and in the meantime DHBs will remain in business.

So can DHB members speak out if they believe the proposed reforms, or some aspect of them, will be detrimental to their constituents? Or if their local communities ask them to do so?

Individually, board members can exercise their right to freedom of expression provided that they stay within the limitations (duties) set out in the Crown Entities Act and the New Zealand Public Health and Disability Act 2000. Board members cannot campaign against the planned reforms; that would be both a breach of their statutory duties and of the new ban on overtly political activity. But they can speak out about the issues they are experts in so long as what they say is consistent with the ‘objectives, functions, statement of intent and statement of performance expectations’. Given the politics of health we expect one or more Board members to test this before the curtain finally comes down on the 20 year district health experiment.

In light of the Code’s imputed responsibility, we recommend that DHB members only make ‘political’ comments on areas within their expertise, and ensure that their comments are confined to topics which are linked to impacts on public health.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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