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STATEMENT OF INTENT
2007/2008 - 2010
6. THE MAIN FINANCIAL AND NON-FINANCIAL MEASURES AND STANDARDS BY WHICH THE FUTURE PERFORMANCE OF THE PANEL MAY BE JUDGED
Financial measures
6.1 The main financial measure by which the Panel believes that it may be judged is the achievement of ongoing viability in terms of section 51 of the Crown Entities Act.
6.2 Because of the nature of the Panel's revenue and expenditure it is not appropriate to set more specific financial goals such as a level of third party income, a return on accumulated funds or even a financial break even. The Panel's revenue is driven by the market and is outside of the Panel's control.
6.3 It is not possible to provide an accurate indication of the trend in the cost of each of the Panel's outputs from year to year because, apart from a few adviser applications, no two jobs are the same.
6.4 The Panel is very cost conscious. It uses the minimum number of members and staff appropriate for each matter before it. The work programme is closely monitored by the Panel and updated through the year. Most meetings are held by telephone.
6.5 The Panel must accept, and work within, cost parameters set by external parties. Its workload is to a considerable extent market driven and this determines its cost outcomes. The cost of its staff resources, its major item of expenditure, track the Securities Commission's costs rather than its own. The cost of members' time is set by the Remuneration Authority, not by the Panel.
6.6 With the recent change in the Panel's chairmanship the opportunity has been taken to review the way the Panel operates, including the format, frequency and location of its regular meetings. Cost effectiveness for both the Panel and its members will be an important consideration in these decisions.
6.7 If the Panel's activities appear to be jeopardising its financial viability then, in terms of its Output Agreement with the Minister of Commerce, it would notify the Ministry promptly and seek an appropriate solution, which may entail additional Crown funding or a reduction in the Panel's level of activity and therefore capability to carry out its enforcement or policy roles.
Non-financial measure
6.8 The Panel is given funding from the Crown on the basis of a range of performance measures and performance standards. These are set out in detail for 2007/2008 in the Panel's forecast Statement of Service Performance included later in this Statement of Intent. The Panel considers that the main non-financial measures by which its performance can be judged over the next three years are:
- Proposals for changes to the Code and takeovers law: measured by the extent of acceptance of the Panel's recommendations by the Minister of Commerce; aim is for 95% acceptance of proposals.
- Exercising of enforcement powers: measured by the extent to which Panel decisions are challenged in Court and, if challenged, by the degree of endorsement by the Court of the Panel's decisions; aim is to have no challenges to the decisions in Court and, if challenged, to have 100% endorsement by the Court.
- Exercising of exemption powers: measured by the extent to which Panel decisions are endorsed or accepted by market participants and the media; aim is for 100% endorsement or acceptance by market participants (through feedback) and for absence of adverse market comment.
- Exercising of approval powers: measured by the quality of independent advisers' reports as assessed internally and in published media; aim is to reduce the level of Panel comment on draft reports to two comments per report and to achieve a favourable balance of comments on the reports in the media.
- Promoting public understanding of takeover law: measured by the extent to which Panel decisions, law changes and Panel policy statements are communicated effectively to the market; aim is to have information published within one month of the law being changed and within one week of decisions being made.
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