Case Studies in Knowledge Management

Reserve Bank of New Zealand 213

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Management Structure

The governor leads the Reserve Bank. The minister of finance, on the recommen-
dation of the board, appoints the governor for a five-year term. In accordance with the
RBNZ legislative framework (RBNZ Act of 1989), the governor is the single decision
maker for the organization and accountable for all activities of the bank.
The minister of finance is responsible for appointing the board of directors. It is the
task of the board to regularly review both the performance of the governor and the bank,
and provide feedback to the minister of finance. The board must comprise not less than
seven, but not more than 10 non-executive members, and does not have any decision-
making authority, although they do make recommendations to the minister regarding the
appointment of the Reserve Bank governor.
The governor is provided advice from a number of internal committees, including
the following:

• the Governor’s Committee;


• the Monetary Policy Committee;


• the Official Cash Rate Advisory Group;


• the Financial System Oversight Committee;


• the Risk Management Committee;


• the Reserves Oversight Committee; and


• the Communications Committee.

The Bank is structured into nine departments including the Knowledge Services
Group. The senior management team consists of the governor, a deputy governor, and
the heads of the various departments as detailed in Figure 1.

Financial Status

The Reserve Bank income is mainly derived from investing the proceeds that the
Reserve Bank receives from issuing currency. The Bank spends some of the money to
pay its operating costs, the extent of which are fixed in a five-year funding agreement with
the Government. The remaining earnings are passed directly to the Government. The
balance sheet of the Reserve Bank is shown in Table 1. Further financial information is
included in Appendix 1.

Organizational Climate

The Reserve Bank employs approximately 220 staff, a figure which has been much
reduced from the mid 1980s, mainly as a result of a “rightsizing” program.
The Bank works to ensure that it has the right people, systems, and structures in
place. In keeping with this policy, in 2002, the Bank carried out a review of its human
resource and corporate policies with the aim of ensuring flexibility in responding to
changing priorities. The Bank has a commitment to a process of staff consultation and
involvement when making changes and believes that the presence of a very flat
organizational structure provides greater integration, flexibility, and cooperation across
departments.
More recently, the results of a staff survey focused the Bank on the need to develop
leadership and communication programs for its staff. The purpose of the survey was to
identify areas that would improve the overall organisational environment to make the