Part 6: Codes of conduct used elsewhere
6.1
In this Part, we briefly compare council codes of conduct to similar regimes that exist elsewhere.
Who else uses a code of conduct?
6.2
Codes of conduct are becoming a common feature of organisational governance and management. They are widely used for employees of organisations, and are frequently regarded as forming part of an employee’s employment agreement. Many professional associations and voluntary organisations also have codes of conduct for their members.
6.3
In the public sector, the State Services Commissioner sets minimum standards of integrity and conduct for all employees in public service departments and, from time to time, issues guidance in the form of the New Zealand Public Service Code of Conduct. In 2005, the Commissioner’s authority in this area was extended to cover most Crown entities and certain other non-public service departments. We understand the Commissioner is currently working towards developing a code or codes for those agencies.
6.4
Codes are also becoming more common for governing bodies, in both the public and private sectors. The Institute of Directors in New Zealand has a code of practice for directors, and encourages company boards to adopt their own codes of conduct. NZX (formerly the New Zealand Stock Exchange) has issued a corporate governance best practice code for directors of companies that issue securities. The Securities Commission has published a handbook on corporate governance principles and guidelines for directors, executives and advisers. Some private companies and Crown entities have chosen to adopt a code of conduct or code of ethics for (or at least expressly including) their boards.1
6.5
In central government, there is no code of conduct for members of Parliament, although Standing Orders prescribe rules for many aspects of MPs’ activities. The House of Representatives (through its privileges committee) has an inherent power to adjudicate on and punish breaches of privilege and other contempts of Parliament. Members of Parliament who are ministers also have to comply with the Cabinet Manual, which sets out conventions about the role and responsibilities of ministers.
6.6
Codes of conduct are also common for local government bodies in foreign jurisdictions. In England, councils must adopt a code of conduct for their members (which must incorporate certain provisions of a prescribed model code). Members must give the council a written undertaking to observe the code of conduct (or else they vacate office). Each council must establish a standards committee, which promotes high standards of conduct by members, assists them to comply with the code, advises the council about the code, and monitors the code’s operation.
6.7
Codes of conduct are also mandatory for local government in some Australian states, including New South Wales, Victoria, and Queensland. These states have all issued model codes, and the contents of the prescribed model code are mandatory in New South Wales.
Contents of codes
6.8
We were pleased to see that the codes of conduct for most councils in New Zealand are closely focused on the activities, issues, and practices of concern to local government. Many of them are more tightly focused, if anything, than some types of codes used by governing bodies outside the local government sector. In other sectors, codes are often simply high-level generic statements of values. They may speak in general terms about concepts such as honesty, integrity, professionalism, transparency, accountability, efficiency, and leadership, but do not always offer specific practical guidance to the sector or entity.
6.9
New Zealand councils interested in reviewing and improving their codes may also wish to look at the model codes of conduct for England, New South Wales, and Queensland, which cover similar issues to New Zealand’s codes, and in considerable detail.
Enforcement
6.10
Most codes of conduct or codes of ethics in other sectors do not include formal enforcement processes. In the case of employees, any serious issues would ordinarily be dealt with as an employment matter, which will include the possibility of dismissal. But, for members of governing bodies, who are not employees, the codes do not usually appear to contemplate formal action (other than whatever other remedies may be available to have a member removed from office).
6.11
However, in local government in foreign jurisdictions, detailed enforcement processes and serious penalties are more common, and are sometimes significantly more prescriptive and punitive than in New Zealand.
6.12
In New South Wales, councils must have a conduct committee (usually consisting of the mayor, general manager and an independent person) to investigate alleged breaches of the code by members. The penalties available are similar to those adopted by councils in New Zealand. However, more serious matters can be referred to the Local Government Pecuniary Interest and Disciplinary Tribunal, which has the power to suspend or disqualify members for up to 5 years.
6.13
In England, there are 2 central monitoring bodies – the Standards Board for England and the Adjudication Panel for England. The Standards Board investigates allegations that a member of a council has failed to comply with the council’s code of conduct. (Indeed, members are required to report suspected breaches by their colleagues.) Detailed procedural requirements are specified.
6.14
After an investigation, the Standards Board may refer the matter to the standards committee of the relevant council, or to the Adjudication Panel. The standards committee or the Adjudication Panel will hold a hearing to decide whether the member has failed to comply with the code. A standards committee may take various actions, including suspension of the member from office for up to 3 months. The Adjudication Panel may suspend the member from office for up to a year, or disqualify the member from office for up to 5 years, and may award costs. The Adjudication Panel may also make recommendations to the council, and must publicise its determinations. Appeal rights are provided for.
6.15
The Standards Board receives more than 3500 complaints each year about alleged breaches of councils’ codes of conduct. In the 2004-05 year, 78 councillors were suspended or disqualified from office.
6.16
In England, codes of conduct have come under some public criticism, concerning:
- the scale and complexity of the administrative processes;
- the political or trivial nature of some complaints; and
- the suspension or disqualification of elected members, which some people view as undemocratic.
1: In the future, boards of Crown entities are likely to be covered by codes issued by the State Services Commissioner.
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