Statement of Intent: 2009/2010 - 2012

Statement of Intent: 2009/2010 - 2012

STATEMENT OF INTENT

2009/2010 - 2012

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

As a market regulator the Panel is a demand-driven organisation. The amount of enforcement work and the time spent on processing exemption and adviser applications is a direct reflection of the level of market activity. These are the sources of the Panel's third party revenue. That revenue is outside of, and to a degree must be seen to be outside of, the Panel's control.

6.3

The Panel is very cost conscious. Most Panel (division) meetings are held by telephone. The Panel 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. The Chief Executive Officer reports to members regularly on the executive's performance in relation to the Panel's agreed performance standards. Milestones are set for the completion of individual jobs.

6.4

The Panel must work within revenue parameters largely set by external parties and the state of the employment market. The cost of the Panel's staff resources, its major item of expenditure, is dictated by market conditions and the need to recruit and retain appropriate professional staff to undertake its functions. The employment package of the Panel's Chief Executive is approved by the State Services Commission. The fees paid to members for their work for the Panel are set by the Remuneration Authority, not by the Panel.

6.5

If the Panel's activities were to 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. This 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 measures

6.6

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 2009/2010 in the Panel's forecast Statement of Service Performance included later in this Statement of Intent.

6.7

The Panel is committed to supporting the Government's initiative of achieving greater value for money from the resources provided to it by the Crown. The Panel realises the importance of demonstrating improvements in its efficiency and endeavours to illustrate these through the forecast SSP, in particular the textual explanation supporting each output. However, the Panel considers that due to its nature as a small market regulator making a limited number of high-end decisions it is not possible to accurately demonstrate the effectiveness of the Panel's activities through simple numeric measures alone.

6.8

The Panel aims to be an effective and efficient regulator respected by domestic and international market participants. Panel members are active participants in the takeovers market. As such they often seek feedback from other participants as to the performance of the Panel executive, and the Panel itself and the decisions it makes. The Panel puts a lot of store in what participants informally tell members but this information is not capable of easy quantification and nor can it be readily verified. In general terms market feedback on the Panel's performance is very positive and the Panel strives to maintain this situation. The Panel is satisfied that it is performing well as an effective market regulator.

6.9

To the extent that non-financial measures can measure the Panel's performance, the Panel considers that the main non-financial measures by which its performance may be judged over the next three years in respect of its main "impacts" are set out in the table below. The Panel cannot set meaningful volume related goals for its work because its primary functions (enforcement, exemptions, approvals) are demand driven. The quantity of policy work the Panel is able to undertake depends on the extent to which the executive's time has to be committed to the Panel's demand-driven functions. The key non-financial performance measures will be timeliness and the quality of the work undertaken by the Panel. Timeliness is important because it means there should be minimal market disruption and quality relates to upholding the objectives of the Code.

FUNCTION	MAIN NON-FINANCIAL MEASURES BY WHICH TO JUDGE PANEL
Keeping the provisions of the takeovers code under review and recommending changes where necessary to ensure the provisions of the Code are effective and relevant	The Panel intends to make recommendations to the Minister by June 2010 for a significant number of technical (low policy content) changes to the Code, which have arisen out of the Panel's experience administering the Code over the past few years, in order to improve the efficiency and effectiveness of the Code...
Granting exemptions from the Code to improve the functioning of the market by alleviating un-intended or unreasonable consequences arising from the application of the Code	The Panel aims to complete all exemption applications received in a timely manner as agreed with the applicant and consistent with the objectives of the Code. The quantity of applications the Panel receives in any one year is entirely demand driven and out of the Panel's control. The Panel expects to grant 30-40 exemption applications during the year.
Enforcing the provisions of the Code to increase the level of compliance by market participants and improve domestic and international confidence in the integrity of the markets	The Panel aims to maintain compliance with the Code and domestic and international confidence in the integrity of the markets, by reviewing all takeover documentation and all documentation relating to shareholder meetings conducted for the purpose of approving Code transactions, and taking appropriate enforcement action where necessary. Panel interventions are to be timely so as not to disrupt the market and to be consistent with the objectives of the Code. The amount of work carried out by the Panel is directly related to the level of market activity. The Panel expects to review or investigate or conduct or initiate court proceedings in relation to 70 documents for takeovers, notices of meetings, possible breaches of the Code, enforcement meetings, and schemes of arrangement or amalgamations involving code companies
Approving independent advisers to prepare reports for shareholders required under various provisions of the Code in order to ensure that shareholders are properly advised on any code-related decisions they are required to make	The Panel aims to achieve improvement in the quality of independent advice given to shareholders involved in code transactions. It does this by setting high standards of independence and competence for advisers approved by the Panel while also promoting a larger pool of available advisers, and by reviewing and commenting on their draft reports. . As a proxy of a measure that reflects the impact the Panel makes on the quality of advice given to shareholders involved in code-related matters, the Panel aims to reduce the level of substantive comments on draft independent adviser reports to two comments per report.
Promoting public understanding of takeovers law in order to improve public understanding of that law	As a proxy of a measure that reflects the impact the Panel makes on the level of public understanding of takeovers law, the Panel aims to publish three editions of Code Word each year and to maintain a website where information is published within one week of decisions being made or within one month of the law being changed.
Co-operating with overseas regulators in order to assist those regulators to carry out the performance of their function especially Australian regulators.	As a proxy of a measure to improve the level of co-operation and understanding between international takeovers regulators, the Panel aims to meet with overseas regulators at least once a year as a means of promoting better understanding and co-operation and to support its representation on the Australian Panel by attendance at its quarterly meetings.

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