PUBLIC SECTOR

Often in budget-constrained environments, public sector entities must balance pursuing opportunities with addressing needs, such as aging infrastructure, disaster preparedness, law enforcement liability and cyber risk preparedness.   

In New Zealand, our Government continues to attract greater public and media scrutiny, encouraging more transparent operating processes. In recent times, the sector has changed many of its delivery systems:

• Non-core government functions are now commonly undertaken by government-owned-enterprises, operating in monopoly or near-monopoly environments
• Government-owned energy, utility and health institutions have been and are continuing to be corporatised or privatised

The public dependence on this infrastructure, together with tightening regulatory surrounds mean that government is more frequently held to account in law. Common themes include; complex injunctions, damages claims against local governments for financial loss and challenges and torts arising from compliance and enforcement activities.  

Apart from such professional liabilities, governments own many assets and are major employers, so they face the same occupational health and safety, property protection, industrial relations and liability issues as private sector organisations. Public accountability adds a political risk dimension to all of these issues. Sound governance structure encompassing risk management and prudent management plans are therefore increasingly important.

The Financial Markets Authority Principles and Guidelines for Corporate Governance very much sets the expectations for government entities. The Marsh Public Entities Practice – as the pre-eminent advisor to the state sector – has built a centre of excellence in understanding and helping government organisations to manage their obligatory risks at all levels.