From both sides now
Stewart McRobie CA compares what it’s like to work in New Zealand’s public and private sectors.
- Stewart McRobie CA is the chief financial officer of the New Zealand Ministry of Business, Innovation and Employment (MBIE).
- Before joining MBIE McRobie had a successful career in the private sector, notably with Westpac.
- He says many people underestimate how diverse and challenging public sector finance careers can be.
By Mike Booker
Stewart McRobie CA
The challenges CFOs face in the public sector can be underrated, as often the environment is more complex than that in the private sector, according to Stewart McRobie CA.
McRobie, now CFO at the New Zealand Ministry of Business, Innovation and Employment (MBIE), spent much of his career in the private sector, including in CFO and executive roles at ASB Bank, AMP and Westpac.
He commenced his first CFO role at Westpac NZ in 2000, seven years before the GFC and eight years before the first iPhone was sold in New Zealand. He has also been CFO for a number of other large organisations in New Zealand, including AMP, ASB, NZ Racing Board and now MBIE his current position. McRobie is also chair of the Squirrel Group of companies, an Auckland based mortgage broker and peer to peer lender and is co-chair of the Australian and New Zealand EInvoicing Board.
McRobie says his current role is as demanding and exciting as any he’s had in the private sector. The change involves working for an organisation without a board of directors (but 17 ministers to support), where surpluses replace profits and where almost everything you do is potentially public information.
The transition from the private to public sector, a common one among financial professionals in New Zealand, is helped by the fact that the underlying financial disciplines and skills are consistent across both sectors, he says.
In this Q&A he outlines some of the differences – and similarities – between working in the public and private sectors.
Q) You have extensive experience in the private sector. Do you recall your first impression of the changes you would have to make when you started at MBIE, a core government agency?
A) The breadth and complexity of MBIE and just what functions it did was also something to come to grips with, and the ministry is responsible for a broad span of policy, regulation and operational areas.
Alongside this, the governance structure of a government agency is quite different to that of a private sector company. There is no board of directors and the chief executive is really the CE and board rolled into one. While MBIE has a risk and audit committee, its members are advisers to the chief executive and should not be thought of as a board of directors.
The other distinction is the number of cabinet ministers that it has to support. While most government agencies are responsible to a single minister, MBIE, by virtue of being the combination of four large previous ministries, supports 17 cabinet ministers. These aspects have led me to consider how I need to operate differently in the government environment to ensure that I am fully effective in my role.
What do you like about working in the public sector?
The role has been as demanding and exciting as any that I have had in the private sector and does have its real challenges. For me this has been in the development of a highly engaged and capable team to deliver excellence to customers and stakeholders across all of the functions that we provide.
“The role has been as demanding and exciting as any that I have had in the private sector and does have its real challenges.”
The challenges that come with MBIE as a large and complex ministry are significant. MBIE has departmental spending of NZ$861 million, non-departmental spending of NZ$4.3 billion, 16 cost-recovery accounts, three votes and 182 appropriations, 25 Crown entities that are monitored and nine off-balance sheet trusts.
In support of the spending and resources that are managed, there is also a range of outcome reporting that is required for each appropriation and this very clear focus on ‘public good’ outcomes differs from the private sector.
What did you like about working in the private sector?
I have enjoyed my private sector roles enormously and each has had its own challenges and managing the needs of the CEO, board and board sub-committees and shareholders can bring a different set of issues to that of the public sector.
‘There is also an unrelenting focus on profit, shareholder return, growth and strategy that brings a commercial discipline to decisions and resource allocation and this helps provide clarity from a prioritisation perspective.
How easy is it to make the shift from one sector to the other?
The underlying CFO disciplines and skills that go with the role are consistent as between the public and private sector and while some of the terms used are different (profit v surplus etc.), the concepts that are used from a CFO perspective are very much aligned.
In this regard, the measurement of resource consumption, cash, investment, prioritisation, efficiency and use of key metrics and their comparison to outcomes and outputs is largely identical.
Obviously the Crown, as a single shareholder, differs from that of a public listed company and one of the other key differences is in relation to the level of scrutiny. Within the public sector, the Official Information Act makes almost everything discoverable at no cost to anyone that requests information. This results in a significant resource being used to manage this process and provide information.
Can the public sector learn from the private one, and vice versa?
The commercial disciplines inherent in decision-making, investment and resource allocation are identical and the public sector can learn from the private sector in the best application and use of these.
Alongside this, the ‘public good’ outcomes that are inherent and actively sought in public sector initiatives can also be used in the private sector.
As might be expected, there are a range of companies in the private sector that exhibit a great standard regarding how they use this information to make great decisions and equally there have been some outstanding instances of failure. The same examples exist in the public sector and these all provide opportunity to consider how to do things better.
Have you had a ‘if I knew then what I know now’ moment?
Having spent the vast majority of my career in the private sector, the things that have struck me the most in the public sector is the need to engage with a broad range of stakeholders at all times; the need to consider the full scrutiny that comes with the Official Information Act; and the degree of risk aversion that this can lead to in decision-making.
This means that, in many ways, the environment is more complex than that of the private sector and as CFO, you need to be aware of these challenges.
Chartered Accountants Australia and New Zealand is a proud supporter of PFA30 – a conference celebrating the 30th anniversary of New Zealand’s Public Sector Finance Act. It will be hosted by the School of Accounting and Commercial Law at Victoria University of Wellington July 26-28, 2019.For more information click here