ACC is the winner of this year's Deloitte Top 200 Excellence in Governance Award.
Increasing its public support
The ACC Board receives the Minter Ellison Rudd Watts Excellence in Governance award in 2016 in recognition of a clear turnaround in performance and perception -- all in the interests of the New Zealand taxpayer.
The judges noted that the award is a reflection of the work done by both the current board led by Dame Paula Rebstock, and the previous board, led by John Judge. Where the latter is widely credited with turning around the financial performance of ACC, the current board has significantly improved the relationship between ACC and the Government, providing a strong framework for improvements in the organisation's performance.
One example of the improvements is the introduction of a new funding policy for ACC. Working with the Government, the board helped usher in a more transparent framework for the setting of ACC levies. There is also an expectation that the changes will result in less volatile levies by adopting a longer horizon over which surpluses and deficits can be smoothed, and reducing the frequency of levy setting from an annual to a biennial review.
"This is about reducing bureaucracy and giving greater stability and certainty around levy rates," said Acting ACC Minister Nathan Guy in September.
On the financial side, performance in 2016 has been impressive. The 2015-16 financial year saw a return on ACC's sizeable investment fund of 10.22 per cent (0.55 points above the industry benchmark).
This has generated $3.3 billion in investment income, under the stewardship of Trevor Janes, Chair of the ACC Board Investment Committee and Deputy Chair of the Board as a whole.
The Deloitte Top 200 judges also noted that the board has taken a more proactive approach in managing public health.
Writing in this year's ACC Annual Report, Guy said: "The board implemented a strategy which has clear priorities to drive reductions in the incidence and severity of injuries. ACC increased its injury prevention spend from $30 million last year to $50m this year."
The renewed focus on injury prevention appears to be paying off, with a return on investment in the injury prevention portfolio of 1.6:1 in 2015/16, compared with a target of 1.2:1.
The leadership of Rebstock has been widely commended and described as highly strategic. Rebstock's strong track record in public sector-related organisations is also seen as instrumental in her successful leadership of the ACC Board since 2012.
Rebstock has previously been the Chair of the Commerce Commission, is currently the Deputy Chair of KiwiRail, and is a lead reviewer for the Performance Improvement Framework for the State Services Commission.
There has been a marked upturn in the organisation's relationship with the New Zealand public, as well. After high-profile incidents in the past relating to privacy breaches, the current board has done a commendable job in driving improvements in this regard.
The board implemented a strategy which has clear priorities to drive reductions in the incidence and severity of injuries. ACC increased its injury prevention spend from $30 million last year to $50m this year.
ACC now reports a rolling average of 20 breaches per month -- which the board say is still above its target level -- but this has been reduced from 68 per month at June 2012.
This, along with other work in injury prevention and reducing average time to payment by 10 per cent in 2015-16, has seen public perception indicators improve markedly.
A survey by Research New Zealand showed 63 per cent of those surveyed in the 12 months to June 2016 have full trust and confidence in ACC -- the highest measure for the organisation since 2008.
The board has also continued to support the Shaping Our Future programme, designed to upgrade IT systems and internal organisation design. A Shaping Our Future standing committee, led by James Miller (also Chair of NZX), has been formed to provide governance to the programme.
It is thought that the uptick in public perception may be partly attributed to the improvements made to workflow systems via investment in Shaping Our Future.
Finalist: Nuplex
The Nuplex Board's recognition as a finalist is the result of shrewd and shareholder-focused governance throughout a takeover period in 2015-16.
After initially being approached by global equity firm Advent International Corporation to combine Nuplex with Allnex Belgium, a leading global coating resins producer, the Nuplex directors engaged in confidential discussions for a series of months.
Nuplex chair Peter Springford.
During that time the board made a number of headstrong decisions, rejecting three separate offers put forward by Advent. This ultimately led to a final offer, which was presented to and accepted by shareholders, and which represented a premium of 44 per cent over Nuplex's trading price on the last trading day before the proposal was announced.
Where often others may be somewhat unwelcoming of a takeover offer, the judges considered that the Nuplex directors played an impressive role in constructively engaging with the eventual buyers to deliver the best possible return for shareholders.
Also worthy of note is Nuplex's strong performance after challenging times during the global financial crisis. After becoming the subject of inquiry by the Securities Commission and falling out of favour with investors, the board implemented changes in management that ultimately saw a reversal of fortunes.
Finalist: Lester Levy
Lester Levy holds a plethora of governance roles in the New Zealand business community, with a particular focus on leadership and healthcare. Levy is the Chief Executive of the New Zealand Leadership Institute and sits on the Sir Peter Blake Leadership Panel. He is an Adjunct Professor of Leadership at the University of Auckland Business School.
Perhaps Levy's greatest contributions can be found in the health sector.
He is currently Chair of New Zealand's two largest District Health Boards by revenue and population served -- Auckland and Waitemata and it has been announced that he will now also chair the Manukau DHB. Cumulatively, those boards account for over 17,000 full time equivalent workers and serve 1.19 million people.
The judges were impressed by the performance of both District Health Boards under Levy's leadership, having achieved break-even positions over the last four years when over half the nation's DHBs fell into deficit. The balancing of commercial constraints and the performance in health outcomes is seen as a strength over this period.
Reflecting the true breadth of Levy's service and skillset, he is also the Chair of Auckland Transport and Chair of Tonkin + Taylor, an environmental and engineering consultancy.
Leading organisations across the private and public sectors and in a range of industries, Levy's sustained success is to be commended.
