Part 2: Organisational issues

Inquiry into the Plumbers, Gasfitters, and Drainlayers Board.

2.1
In this Part, we discuss our findings on the organisational issues at the Board. We begin by outlining what we found when we carried out most of our fieldwork in 2008/09, and then record the steps that the Board has taken to address many of our concerns.

2.2
The Part concludes with a discussion of the issues that we consider still need attention.

2.3
Overall, we found that significant organisational problems existed in 2008/09. These included:

a lack of clear or comprehensive operational policies to guide and explain the way in which the Board gave effect to its statutory tasks;
inadequate policy and strategic capacity, so that the Board has not been able to ensure that the legal and regulatory environment has kept pace with current needs;
poor relationships with other organisations in the sector;
a governing Board struggling with the effects of repeated turnover and with the challenge of carrying out a high disciplinary workload when most Board members work part-time and are self-employed; and
an unhealthy organisational culture, with unhappy staff and a lack of openness and accountability to the trades that fund the Board and that it regulates.

2.4
By 2010, when we were discussing our draft findings with the Board, the situation was very different. In many instances, the Board was able to provide us with information on the steps it had already taken to begin to tackle the problems. In other instances, it accepted our concerns immediately and began work to deal with them. In our view, these various initiatives are taking the Board in the right direction, and the current Board has made significant progress on the many organisational challenges that confronted it when it took office.

2.5
The problems are not yet solved, and some of the challenges created by the current composition and workload of the Board may not be able to be resolved without further policy work and legislative change. The Board also needs to understand that significant change to an organisation's culture takes time, particularly when some of the problems are deeply embedded in its operating practices. It will need to maintain its focus on organisational change for some time.

What we found in 2008/09

The Board's policies and procedures

2.6
One of the first steps in our inquiry was to obtain a full set of the Board's policies and procedures. The policies can be grouped into two main categories:

those dealing with governance and internal administration; and
those dealing with operational matters.

2.7
Operational policies are important for organisations that routinely exercise statutory powers. Operational policies help the organisation to be clear and consistent in the way it exercises its powers, and to follow the right process. Good operational policies protect the organisation by helping it meet its legal obligations, and provide information to the people about whom decisions are made.

Governance policies

2.8
We were given a set of governance policies dated May 2008. These were generally clear and reasonably comprehensive, and had changed little from the previous policies.

2.9
We had only minor questions about the substance of these policies:

We discuss later our concern that the policies suggested too strict a demarcation between the activities of the Board and the Registrar. In the context of the Board, we question whether it is appropriate to limit the role of the Board to a traditional governance function.
The conflicts of interest policy was very brief and did not refer to the Local Authorities (Members' Interests) Act 1968. We found no acknowledgement in the Board's documentation that it is subject to this Act. The Local Authorities (Members' Interests) Act requires specific actions if a Board member has a financial interest in a matter coming before the Board, and there are potentially serious consequences (including loss of office) if it is breached. It might also be useful for this policy to provide guidance on how to consider the more complex questions about possible conflicts of roles, as well as direct personal or financial interests.
At the time, the Board did not appear to have a policy on disclosing information, whether under the Privacy Act 1993 (which sets out the rights of individuals to access information about themselves) or more generally.

Operational policies

2.10
The operational policies we were given were less satisfactory. It was unclear when they had been prepared because they were undated. Many were simply a collation of forms, information that was available on the website, and the legislative requirements. We were later told by several staff, including the former Registrar, that these documents had been compiled between the time that our inquiry was announced and the beginning of our investigative work two days later.

2.11
We have concluded that the Board did not have clear or comprehensive documented policies to guide and explain its operational activities.

2.12
Without clear or comprehensive policies, we found it very difficult to understand what the Board's policy was on various issues. More importantly, we were often unable to find documentation that explained the reasons for those policy decisions, or that showed how the policy or practice related to the legislation that governs the activities of the Board.

2.13
Both the 1976 Act and 2006 Act are complex and state many different tests and criteria. In practice, each formal decision the Board makes under the Act should be underpinned by a process for gathering information. In any decision-making system, there should be a range of information readily available about, for example, how the process works, what information and factors are needed or relevant, and how and when decisions are made and communicated. This information is important and useful for those about whom decisions are made. It is also helpful as a guide to staff, and promotes consistent and high quality decision-making.

2.14
The importance of the operational policies that underpin administrative decision-making has long been recognised in law. In most public sector organisations, the public have statutory rights to have access to the internal policies, principles, rules, or guidelines that govern how decisions about them are made, and to the reasons for decisions.⁵ Now that the 2006 Act is in force and the Official Information Act 1982 applies to the Board, these statutory rights are also available to people regulated by the Board.

2.15
These rights are an important practical protection for the rights of individuals to know in advance the principles and rules that will guide decisions about them. They promote accountability and improve the quality of decisions by enabling those affected to present better information and representations to the decision-maker. They reflect good administrative and decision-making practice, and general administrative law principles.

2.16
In our view, the policies and systems of the Board that we reviewed in 2008/09 were not adequate for these purposes. The Board could not easily have provided this information if it had been asked for it. As we noted in our discussion about the governance policies, the Board did not appear to have a policy on disclosing information, whether under the Privacy Act 1993 or more generally.

2.17
We regard these gaps as significant, because a theme throughout this inquiry has been the difficulty of communicating with the Board and the inability of people to understand the decisions made about them. We consider that a significant contributing factor has been the lack of clear operating policies explaining how the Board puts the law into operation.

The Board's strategic capacity

2.18
Until recently, the Board has been working with very dated legislation and regulations, in an environment that has changed significantly in the last 30 years. Patterns of employment are changing, and the workforce is now highly mobile, both domestically and internationally. Many people move locations or change jobs frequently. Businesses are also structured in new and different ways, as people look for specialist niches and different ways of providing and packaging services. Not everybody wants or needs to have general skills across a whole trade. People may also want to come into and out of the industry in different ways and at different stages of their working lives.

2.19
Other relevant changes include:

the different training environment as a result of reforms in the tertiary sector;
the development of more advanced teaching, learning, and assessment techniques in the education sector;
significant changes to the regulatory environment, with reforms of the Building Act 2004 and other relevant legislation and standards; and
changing expectations of service and interaction with public sector organisations.

2.20
All of these changes posed challenges for the Board's work and the way in which the 1976 Act and regulations operated.

2.21
An organisation with good strategic and policy capacity anticipates problems and looks for constructive solutions to them. We expected to see an organisation that was:

well-connected with other organisations in the sector and the people that it regulates;
open;
thinking strategically about emerging challenges; and
engaging regularly with the government department with policy responsibility for the legislation about what changes might be needed in the coming years.

2.22
Instead, we found an organisation that saw itself as duty bound to continue to enforce out-of-date legislation and regulations despite their growing lack of fit with modern circumstances. Rather than fostering discussion about possible changes, the Board appeared to have had little regular or meaningful contact with its administering department on policy matters, including possible changes to the 1976 Act and regulations. We did not see evidence that the Board was maintaining a strategic or policy overview of its role, the operation of the regulatory system, and the state of the sector.

2.23
So long as the 1976 Act remained the law, Board staff had to administer it. But when new situations arose that the 1976 Act might not accommodate well, we expected the Board to engage with the individual to discuss possible options, and to take up the issue at a policy level to promote change, rather than to simply assert that the law does not allow that situation or that level of flexibility.

2.24
The former Registrar told us that he met regularly with relevant Ministry of Health staff, but that it was made clear to him that changes to the legislation and regulations were not possible. The Ministry of Health told us that there were some meetings during 2007, and there were also a number of meetings with the Minister of Health. The Ministry regarded these as updates rather than substantial policy engagement.

2.25
In our view, this lack of a strategic and policy capability in the Board over many years has been at the root of some of the current problems. It has meant that the Board has failed to identify emerging problems early enough or to interact effectively with the policy and political system to ensure that the legal and regulatory environment keeps pace with current needs.

Relationships with other organisations in the building and construction sector

2.26
The Department of Building and Housing has overall policy responsibility for the building and construction sector and the specific legislation. Its role is to advise the Minister on emerging policy issues and the need for any change to the Act or regulations. It needs to work closely with the Board to identify the need for any changes and to develop recommendations, because it will not have the same level of direct practical knowledge of the issues. It is important that there is an effective collaborative working relationship between the Board and the Department of Building and Housing.

2.27
When the Board was within the health portfolio, it was a very small part of the work of the Ministry of Health. One of the reasons for transferring responsibility to the newly created building and construction portfolio was to enable greater focus on these regulatory questions in their practical context.

2.28
The combination of the transfer of responsibility to the Department of Building and Housing, the need to implement the new legislation, and the controversy surrounding the Board in the last few years has meant that the Board and the Department are now paying significant attention to the issues confronting this sector. We encourage the Board and the Department to maintain that level of engagement, and to ensure that there is meaningful strategic oversight and ongoing policy consideration of emerging issues.

Relationships with training organisations

2.29
All of the different routes for training plumbers and gasfitters ultimately lead to the registration examinations administered by the Board. It is not possible to become a registered plumber or gasfitter without passing the examinations.

2.30
The Board has an important informal role in working with training providers and those involved in the qualification system. There needs to be very close alignment between the content of the Board examinations, what is actually taught by training providers and those supervising trainees, and what is prescribed in unit standards and assessed in the National Certificate approved by NZQA. Given that an apprenticeship is up to five years long, any significant changes to the content of apprenticeship training need to be phased in so that the whole system adjusts in a co-ordinated way.

2.31
In practice, collaboration is important if the system is to work. No agency has a formal lead role, but the Board sits at the centre of the system as the gatekeeper for entry into the plumbing, gasfitting, and drainlaying trades. It is the only public sector agency focused on these particular trades, because the education agencies all have more general roles. It is therefore logical for the Board to take a central role. In this context, a central role requires a strong focus on building collaborative relationships, which in turn relies on communication, trust, and co-operation between the various bodies.

2.32
It is clear from the many discussions we had with industry participants that the Board has not succeeded in this role for many years. Relationships between the Board and others have been difficult. Trust has been low, and the industry as a whole has been very politicised. There has been some improvement in recent years, but the level of communication and co-operation was still far from ideal when we did our fieldwork in 2008/09. Examples of the difficulties that were put to us included:

the length of time taken to get new unit standards approved for the National Certificate, which required collaboration between the training providers, the ITO, the Board, and NZQA;
ongoing debate and discontent about changes to the registration examinations that were not well aligned to the new unit standards or teaching prescriptions; and
the lack of a clear protocol for how to work through issues.

2.33
All of the other agencies we talked to in 2008/09 told us that it was very difficult to work with the Board because it was not an open organisation and did not appear to appreciate the importance of collaboration.

2.34
Our discussion of the examination system in Part 5 illustrates the relationship difficulties that have prevailed for some time.

2.35
The new Board has consciously worked to improve relationships with the sector during the last year. We consider that this is an important initiative. In our view, the clear inability of agencies to work together effectively in the past has been a factor in the difficulties with the examinations and the low pass rates. Put simply, the Board's failure to build collaborative working relationships with the other agencies in the sector has disadvantaged those trying to train and qualify through the system.

2.36
The relationships between the various bodies are a point of contention in the industry. At times, we have heard conjecture about the significance or consequences of historical and current links. We encourage the Board to address that conjecture by being open about the relationships and roles between the various industry bodies. Relationships are important for the successful development and regulation of the industry. The people who are subject to that regulation and who fund the system through their fees need to be assured that the organisations are working together appropriately.

Board turnover

2.37
The Board has had several full or nearly full changes in membership in the last 10 years. Each time, the relevant Minister has had reasons for making the changes. We do not question those decisions. But we note that this level of change at the governance level always has a cost, because new Board members take time to become familiar with the organisation, their role in it, and the strategic and operational issues that need to be addressed. We were told that new or departing Board members sometimes did not receive any clear explanation for the membership changes, which they felt hampered their ability to address problems.

2.38
The Board has a range of statutory tasks that Board members carry out directly, so these changes have slowed some ordinary business. In particular, the disciplinary processes carried out directly by Board members have required careful management as membership has changed.

2.39
Another result has been that the Board staff, in particular the Registrar, have become increasingly important as a source of institutional knowledge and advice for Board members. Many of the current and past Board members we spoke to were open about their practical reliance on the former Registrar for information and advice on a wide range of strategic and operational matters. That will, of course, always be an important role for a permanent secretariat, but it has meant that successive Board members have not been well placed to assess issues for themselves or to question the advice they received.

2.40
One part of the role of a governing Board is to bring a wider perspective and to test and challenge management thinking. Any Board subject to frequent and large-scale changes in membership is going to struggle to perform that role well.

2.41
In our view, this level of change in recent years has had practical consequences for the governance of the organisation. The Board confirmed to us that, after new members were appointed to the Board in July 2008, it took time to become acquainted with a wide range of challenges and to build the necessary regulatory experience, industry knowledge, and personal relationships with other stakeholders.

The composition of the Board

2.42
We also noted some unresolved debate in the sector about the nature of Board appointments and what links with external organisations should or should not exist at Board level.

2.43
Before 1999, the 1976 Act dictated the composition of the Board in some detail. In particular, it required two people to be nominated by the Master Plumbers Association, two people to be nominated by the relevant union, one representative of the Gas Association of New Zealand, and one person to be nominated by the Master Drainlayers Association or Society. The other Board members were variously provided by the relevant government departments, Local Government New Zealand, and a local authority.

2.44
The 1999 amendments to the Act deliberately removed this level of prescription and the structural links with other industry bodies. The law is now silent on the composition of the Board, other than requiring two members from each of the three occupations, and allowing the possibility of one person representing a relevant training organisation.

2.45
For some years, the Board did not include individuals from the unions, Master Plumbers Association, or the Gas Association. A different approach was taken in 2008, and the Board currently includes one person who works with the Gas Association, and one person who is on the Board of the Master Plumbers Association, as well as a Director of the Plumbing, Gasfitting, Drainlaying and Roofing ITO. Unlike the previous system, these individuals have not been nominated by their organisations, but have been directly chosen and appointed by the Minister. Nonetheless, there has been some suggestion that their appointments were inappropriate.

2.46
We do not have a view on whether organisational links through Board appointments is desirable. We note that there is nothing in the legislation to prevent it. We consider that the approach to separation or linkage is a choice available to Ministers when they make the appointments, depending on their approach to building effective working relationships in the sector. Any concern about possible conflicts of interests should be able to be managed by appropriate protocols and meeting procedures.

2.47
The Board raised a separate issue with us. It noted that the practical demands on Board members were significant and time-consuming if they were to be done well. The Board is not just a governance body, like a corporate board. It is also a statutory body with substantive decision-making functions under the legislation. In particular, the disciplinary function requires Board members to be available for extended hearings and quasi-judicial decision-making. While the Board continues to be largely made up of people who are running their own small businesses, it will be difficult to find people who have the relevant skills and are able to devote enough time to fulfil the Board's responsibilities.

2.48
We agree that this presents a real practical challenge, and that the demands of the disciplinary function, in particular, need to be considered when decisions about the composition of the Board are made.

Balance between governance and management

2.49
The fact that the Board has substantive functions to perform also means that the normal organisational balance between governance and management roles is unlikely to be appropriate. We reviewed the current governance policies dated May 2008, as well as the previous policies. They set out quite a strict demarcation between the Board's role, which is focused on strategic direction, and management. The policies gave the Registrar primary responsibility for all operational activity.

2.50
That policy may have matched the approach of previous Boards. However, the balance of roles between the Board and Board staff is only policy and can be adjusted from time to time. The current Board has taken a more active role. For example, Board members have attended and participated in meetings as part of recent consultation about registration categories and other matters needed to bring the 2006 Act into force. They have also been actively working to tackle problems and to build relationships with people in other major organisations in the sector.

2.51
It was suggested to us that this level of involvement might constitute inappropriate interference in management matters, but we consider that this criticism is not well founded. We also consider that it may be unwise to describe the different roles in such black and white terms as the current policies do, given that the Board has substantive functions. The law requires it to be integrated into the operational processes and to take responsibility for operational decisions, albeit with appropriate support.

Openness and accountability

2.52
When we began this inquiry, we found it very difficult to get a clear understanding of how the registration and licensing system worked and how the organisation carried out its functions. The website contained very little information, and what was there was not particularly helpful or clear. There was minimal publicly available information to explain the systems, and what people needed to do and why.

2.53
Many of the users of the system who contacted us, particularly the overseas applicants, were clearly bewildered by the system. Several people who had come from overseas told us that they were surprised by the full Board requirements when they got here, and had received different and contradictory information from immigration agencies and consultants. Some did not understand or accept the difference between the assessment processes and requirements the Immigration Service applies when assessing whether to allow someone to move to New Zealand, and those the Board applies when regulating the ability to work in the industry.

2.54
In 2008/09, we were also surprised by the lack of general communication and public reporting by the Board. Although the Board produced a newsletter, it was not published regularly. The annual report was not available on the website and did not seem to be widely distributed.

2.55
The correspondence we reviewed also tended to be reasonably brief and formal, with little explanation about the background reasons for requirements or the approach being taken. When combined with legislation and associated requirements that were confusing, and little clear public explanation of the systems that the Board administered, we could see why people interacting with the Board might not understand the decisions that were made about them. When we talked with tradespeople, we often found that the recipients of the correspondence failed to appreciate the more general regulatory context or were unable to get information from the Board that might have explained the situation to them.

2.56
When we talked with tradespeople, we noted that many of them genuinely perceived the correspondence and communications from the Board as threatening or vindictive. We found some correspondence where the tone surprised us. However, most of the correspondence we reviewed was appropriate. Some of the letters that people complained about were standard form letters.

2.57
It was often suggested to us that telephone calls and conversations were less circumspect than the written correspondence, and that the formal letter needed to be read against a backdrop of threatening or hostile conversations. We did not find documentary evidence of such conversations, and note that in some cases the individuals were involved in complex disputes with the Board about their status. Also, many individuals in the industry are forthright and strong-minded.

2.58
Many of these concerns centred around the operating style of the former Registrar. He has a long background with the industry and has been involved with the Board since 2000, first as a Board member and then as Registrar. He has extensive institutional knowledge and was the public face of the Board for many years. He has been a strong advocate for the Board's role in protecting public safety and has overseen the introduction of a range of new requirements. As a result, he has been a dominant and forceful presence in the industry. People often tended to personalise their dealings with the Board to the former Registrar, because he signed all correspondence.

2.59
Nonetheless, we note that a large number of unconnected people have raised similar concerns with us. In our view, there is a reasonably widespread perception that the Board has used its authority inappropriately against individuals. Even if there is no foundation for this perception, the fact that it exists is a matter of concern and needs to be addressed urgently. It is undermining trust in the organisation and its regulatory role.

2.60
In our experience, the key to addressing this kind of perception is to ensure that the decision-making system is transparent, so that people can see clearly what decisions are being made and why. We have already noted that it was not easy to get a clear understanding of the legislative and administrative requirements that led to particular decisions and actions by the Board. In any context, when people do not understand the reason for a decision or action, and are left to infer it for themselves, they will often infer a poor motive.

Overall organisational culture

2.61
The successful implementation of most regulation rests on the consent and co-operation of those being regulated, rather than on coercion and enforcement. Most people need to comply willingly. This is true for such things as criminal law, tax law, health and safety requirements, and many other areas. It is also true for occupational regulation regimes. If the regulation is to be effective, those subject to it need to accept it and to trust the regulatory agency that administers it. Transparency is an important means of building and maintaining that trust.

2.62
We did not find that culture in the Board. By the end of our fieldwork, we had a clear overall picture of an organisation that was not particularly open about its activities and did not fully appreciate the need to be accountable to the sector that funds it and that it regulates.

2.63
In 2008/09, we found an organisation that sought to impose rules for the good of the industry rather than one that actively worked to build understanding and acceptance of the rules or worked with the industry to develop effective systems. We also saw little awareness of how important it is to maintain the trust and co-operation of those being regulated, or of the importance of openness. The comments we have already made about the lack of strategic capacity and openness are important contributors to this overall culture.

2.64
In 2008/09, the internal culture was also poor. The Board is a busy organisation that runs an important system regulating more than 10,000 people. The legislation the staff administered at the time was manifestly outdated, but still had to be followed. Many of the staff had good ideas and wanted to be able to develop or improve the way the Board operated. When we spoke with staff, however, most told us that it was clear that this level of engagement and initiative was not wanted or encouraged. They felt that the Board was not receptive to change and tended instead to strongly defend current practice. Several staff were frustrated and unhappy.

2.65
The staff of the Board who we met were dedicated and hard working. Their work is complicated, and it can be a difficult environment. Many people working in the sector do not fully understand the systems and regulatory requirements, or the role of the Board, and they clearly get impatient with "paperwork". This regularly manifests in rude or abusive telephone calls. Most staff accepted this as part of the job and thought that they were usually able to talk people through any initial anger or frustration. But we note that it does make the working environment difficult at times, and that the attitude of some can inhibit the willingness of Board staff to engage freely and openly.

2.66
Nonetheless, our overall impression was of an organisation that did not value communication or initiative, and was not adequately engaged with the need to develop as circumstances changed. Overall, we found the culture to be defensive and closed, with fixed views, rather than open.

Changes that the Board has been making

2.67
We have already explained that most of the current Board members were appointed in July 2008, and we began our inquiry in November 2008. While we were carrying out our fieldwork and analysing the results, the new Board members were working to address a wide range of problems that they saw with the Board. They identified many of the problems that we describe in this report.

2.68
In late 2009, we began discussing with the Board our preliminary findings. We issued a draft of our report to the Board for consultation in December 2009. The Board accepted most of the concerns we raised, particularly about the organisational matters discussed in this Part. In many cases, it was able to provide us with information on the steps it had already taken to tackle the problems. In other cases, it accepted our concern immediately and began work to address the point.

2.69
For example, the Board told us in February 2010 that:

it had already commissioned a full organisational review to help it ensure that the Board develops an appropriate level of strategic and policy capability;
it had worked steadily to build effective working relationships with other organisations in the sector, including recently concluding a memorandum of understanding with the ITO;
it had begun to comprehensively revise its policies and operating practices;
it will prepare policies and processes to ensure that a culture of transparency and accountability is encouraged at all levels;
it had been redeveloping the website to make it more informative and user-friendly, and accepts the general need to improve its communication and the amount of information it makes available;
it had published the two most recent annual reports on its website; and
it had worked hard to consult effectively and thoroughly with the sector during 2009 as part of the process for bringing the 2006 Act into force, including having Board members attend a series of meetings around the country.

2.70
The Board also told us in June 2010 that it had:

drafted and gazetted notices relating to registration, licensing, and fees for each of the three trades;
instituted a review of all of the fees charged by the Board, to ensure that it had a full analysis of the cost drivers, sources of funding, and options – the independent consultant was required to obtain the views of multiple stakeholders as part of the review;
prepared and published brochures and other information, which had been sent to all relevant stakeholders;
launched an 0800 line, to provide improved access to the Board; and
started addressing concerns raised by individuals.

2.71
In particular, the Board told us that it had written, or was in the process of writing, the following policies:

Registration Policy Statement;
Licensing Policy Statement;
Continuing Professional Development;
Official Information Act Policy Statement (not yet submitted to the Board);
Human Resources policies, including a Privacy Act Policy Statement (not yet submitted to the Board);
Examinations (not yet submitted to the Board);
Complaints (not yet submitted to the Board); and
Overseas Assessment (in development).

2.72
We have described this work very briefly, but do not underestimate its significance or the effort that has been involved. In our view, these various initiatives are taking the Board in the right direction, and significant progress has been made on the various organisational challenges that confronted the current Board when it took office.

Issues that still need attention

2.73
The organisational issues we have raised are significant. Although the Board has recognised them and begun to make changes, we are concerned that some of the problems are deeply embedded in the culture and operating practices of the Board.

2.74
We encourage the Board to take a long-term view of the change process it has started. We consider that it will need to maintain a strong focus on changing to a culture of openness and accountability for some years yet. It also needs to maintain the policy relationship it has developed with the Department of Building and Housing, because there are policy and legislative matters that are likely to require attention in the near future.

Reviewing and publishing the operational policies

2.75
Now that the 2006 Act is in force, the Board is subject to the Ombudsmen Act 1975 and the Official Information Act 1982. This gives people a general right to request a wide range of information from the Board, and the ability to ask the Ombudsmen to review decisions on the release of information and to review administrative decisions that they are unhappy with.

2.76
In our view, this change could be significant. It will force greater openness and accountability on the Board on a wide range of governance and administrative practices, and will give those affected by its decisions an accessible avenue for complaint and review.

2.77
The Board has told us that it is beginning to comprehensively revise all of its policies. We encourage it to do this as a priority, and to publish on its website its operational policies on its main statutory decision-making processes. This will help it respond to the statutory rights of access that now apply to it. We have noted that, in 2009, we doubted that the Board would be able to respond adequately to such a request. The Board has confirmed to us that it is committed to publishing all of its operational policies, and we note that it has already published some initial policy statements.

2.78
The Board needs to prepare comprehensive and detailed policies on all aspects of its operations. The policies need to explain how the Board puts the 2006 Act and regulations into practice, the systems operated by staff, the information that is needed, and how matters are presented to the Board for decision. The policies should also explain what rights individuals have in this process, including their rights to have access to the information being presented to the Board and to have their views included. Because no policy can cover every eventuality, the policies should explain how and why decisions might take a different approach if the circumstances seem to require it.

2.79
As with all governance and operational policies, the policies should be formally adopted by the Board and reviewed from time to time.

Openness

2.80
The Board has recently redeveloped its website to provide easier access to information for members of the trades it regulates and for the public. The new website is better, but there is scope to use it much more.

2.81
Many organisations actively use their websites to achieve considerable openness and accountability. For example, most local authorities put full meeting papers and minutes on their websites, as well as a wide range of governance documentation (including annual reports, and strategic and planning documents). Many government agencies also use websites as a convenient and cost-effective way of giving access to a wide range of organisational information, including current projects and information on costs.

2.82
We encourage the Board to think creatively about how it can use its website and other mechanisms to publicise more information about its work. Putting effort into ensuring that the organisation is as open as possible will be one of the most important ways of rebuilding trust in the Board.

2.83
The Board also needs to review how it communicates with the people it regulates, to ensure that the communication is effective. This may involve reviewing templates for correspondence, as well as the background information it is able to provide to people.

2.84
Effective communication is particularly important for the plumbers, gasfitters, and drainlayers that the Board regulates. Where the Board is exercising its regulatory powers and performing its regulatory functions, people need to understand on what basis the Board is doing so, the reasons for such action, and their ability to challenge that action. If the Board is transparent about how it exercises its powers and performs its functions, people are more likely to consider that it has done so appropriately. This in turn will lead to greater confidence in the Board.

2.85
The Board also needs to take account of the way in which it is currently perceived in some quarters: some people feel threatened by it, assume that decisions are personalised, and do not understand the system very well. This context makes it even more important that the Board ensures that communication is clear and cannot be misinterpreted.

Strategic and policy capacity

2.86
In 2008/09, we identified the lack of strategic and policy capability as an important weakness. The Board accepted this and is taking steps to ensure that it develops and maintains that capability. In our view, this investment will be important. The 2006 Act has just come into force, and there are already indications of problems with it. The Board and the Department of Building and Housing are both aware that a more thorough review of the Act may be needed at some point.

2.87
We encourage the Board and the Department to maintain a policy focus on the way in which the industry is regulated and whether there is a need for change. Issues that are already apparent include:

the composition of the Board, and whether the current requirements for practitioner members can be reconciled with the Board's workload, particularly in the disciplinary process;
the difficulties that have been identified with the gas certification and audit systems, which we discuss further in Part 6; and
a range of practical questions that are arising as the 2006 Act is brought into force.

2.88
The Board needs to ensure that it has the capability to keep thinking about challenges to the regulatory regime it administers, and to be able to work with the Department of Building and Housing on what policy or legislative responses may be needed. We note that maintaining the necessary level of policy and strategic expertise can be challenging for small and self-funded regulatory bodies such as the Board. It will need to continue to liaise closely with the Department to find the right balance between the in-house expertise it needs and what it can rely on the Department to provide.

5: See sections 22 and 23 of the Official Information Act 1982.

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