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Risk and Prudence
Engineering Governance in Public and Private Organisations
IPENZ Recommendations for the Prudent Management of Engineering Activities in Public Companies, Local Authorities and Crown Agencies
Introduction
Rationale
Applicability
Board Positions
Executive Management
Business Process
Conclusion
The Institution of Professional Engineers New Zealand (IPENZ) is the professional body representing engineers and technologists in New Zealand. It has produced these guidelines to assist directors, councillors, and executive managers in public companies, crown agencies and territorial local authorities with the prudent management of their engineering assets and operations.
Adherence with this policy will assist directors and executive management,
and those with statutory responsibilities for compliance with the legislative
requirements, to show that they have acted prudently and have followed
"best practice" in setting up appropriate processes and accountabilities.
Compliance with this policy will also assist in ensuring that engineering
activities are managed in support of the broader business activities.
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These guidelines are designed for public companies, crown entities, government bodies and territorial local authorities which either
Rely intensively on engineering and technology to deliver or produce their services and products.
Or
Engineering-related risks are a significant proportion of the total business
risk.
Organisations should ideally have at least one Board Member with a recognised professional engineering background. That person will, in addition to their normal Board responsibilities, be expected to add an engineering and technology perspective to Board policy making. The Board should also recognise that it may need to take advice on engineering matters from both within the company and from external sources.
Such organisations should have: -
A person or persons (as appropriate) with clear responsibility and accountability for engineering and technology matters. This person should be eligible for professional membership of a recognised engineering institution.
The position description should include responsibility for ensuring that: -
- The engineering and technology policies are embodied within the business policy and strategies.
- Engineering risks are properly evaluated and considered in evaluating business risk.
- The engineering and technology applied in the businesses meet ‘best practice’ guidelines.
The organisation should have within its strategic business processes: -
A regular performance audit of its engineering policies (including human resource policies applying to engineering personnel) against industry ‘best practice’.
an engineering risk evaluation programme
Adherence to this policy will assist those with governance responsibilities to show that they have acted prudently in managing the engineering resources entrusted to them.
R P CARTER KNZM
President
