Compliance as a Statutory Corporation
Although KiwiRail is a State-Owned Enterprise and therefore subject to the State-Owned Enterprises Act 1986 (Legislation website), and the New Zealand Railways Corporation Act 1981 (Legislation website), it is not a company under the Companies Act.
Objective of a State-Owned Enterprise
The principal objective of every State-Owned Enterprise is to operate as a successful business and, to this end, to be as profitable and efficient as comparable businesses that are not owned by the Crown. State-Owned Enterprises are also required to be good employers and to exhibit a sense of social responsibility. Crown-owned companies are classified as SOEs where there are identifiable commercial functions and the entity can operate as an efficient and profitable business. A function is deemed a ‘commercial function’ and undertaken by an SOE when:
- performance is measured primarily in financial terms; and
- revenue is generated through the sale of goods and services.
State-Owned Enterprises tend to sell into contestable markets although some regulated monopoly enterprises exist.
The State-Owned Enterprises Act 1986 recognises that an State-Owned Enterprise may have non-commercial roles, but requires Ministers to enter into an agreement with the State-Owned Enterprise to pay for any goods or services that they wish a State-Owned Enterprise to provide to any person.
Each State-Owned Enterprise has two Shareholding Ministers; one is the Minister of Finance and the other is the relevant Shareholding Minister. KiwiRail also reports to the Minister of Transport:
- Minister for State-Owned Enterprises, Hon Todd McClay
- Minister of Finance, Hon Bill English
- Minister of Transport, Hon Simon Bridges
A copy of our Briefing for Shareholding Ministers can be found here.
Board of Directors
The Board of Directors of a State-Owned Enterprise, which is appointed by the Shareholding Ministers, is accountable to the Shareholding Ministers for the performance of that State-Owned Enterprise. In the case of KiwiRail, the Minister of Finance and the Minister for State-Owned Enterprises (the two Shareholding Ministers) may jointly remove board members at any time and entirely at their discretion.
KiwiRail's Board of Directors is chaired by Mr John Spencer CNZM.
- More information on our Board of Directors here
KiwiRail, like all other State-Owned Enterprises, is required to produce an annual Statement of Corporate Intent and half yearly and annual reports, all of which must be presented to the House of Representatives by the relevant Shareholding Minister. Most SOEs are subject to ministerial direction in relation to the content of certain aspects of the company's Statement of Corporate Intent and the level of dividend payable to the Crown. Shareholding Ministers may remove board members by shareholder resolution under the Companies Act 1993. Under the Companies Act 1993, an alternative process may be followed if allowed by the company’s constitution.
- Latest Annual Integrated Report here
- Latest Half Year Report here
- Latest NZRC Half Year Report here
- Latest Statement of Corporate Intent here
- KR SCI Accounting Policies here
- Latest NZRC Statement of Corporate Intent here
- Latest Integrated Report here