Corporate Governance

Page Index

• Corporate mission and values
• The Executive
• The senior leadership team
• Senior management and staff committees
• Corporate governance initiatives
• Internal audit and fraud control
• Ethical standards
• Freedom of information

The success of our role is going to be tied, in large measure, on the extent to which we ensure a whole-of-government approach to policy development …However, the key to ensuring a whole-of-government approach is unlikely to be found in the structures we organise. Fundamentally, our success is going to depend on the culture we bring to our roles. It is the behaviours we display and the examples we set that will determine the effectiveness of the structures on which we participate or chair.
Dr Shergold in his address to staff on 14 May 2003

Corporate mission and values

The mission of the Department of the Prime Minister and Cabinet is to provide support to the Prime Minister and to achieve a coordinated approach to the development and implementation of government policies.

The department’s goals are to provide:

• quality advice and information on those matters requiring the Prime Minister’s attention as the Head of Government and the Chairman of Cabinet
• efficient and coordinated government administration
• effective administration of the programmes for which the Prime Minister has responsibility.

In support of these primary goals, the department promotes a corporate ethos which values the contribution of staff and the cost-effective and professional management of our people and resources.

As a central policy and coordinating agency responsible to the Prime Minister, the department promotes corporate values that in particular ensure:

• high-quality service to the Prime Minister and to other ministers
• professionalism, commitment and excellence in the management of services, programmes and policy advice
• constructive and cooperative work relationships both within and outside the department
• adherence to the Australian Public Service (APS) Values and Code of Conduct
• career opportunities for staff
• a stimulating and caring work environment.

The Executive

On 10 February 2003, Peter Shergold was appointed as departmental Secretary, following Max Moore-Wilton’s resignation on 20 December 2002.

The Executive of the department comprised the Secretary and three Deputy Secretaries. Associate Secretary Russell Higgins commenced on 10 March 2003 to head a taskforce to examine and report to the Prime Minister and the Energy Committee of Cabinet on a broad range of energy policy issues.

Following the Secretary’s announcement of an organisational restructure on 23 May 2003, the department moved progressively towards the new structure in advance of its full implementation early in 2003-04. As set out in the Departmental Overview, the following measures took effect immediately:

• the Corporate Support Branch combined with the Government Communications Division to become the People, Resources and Communications Division reporting through Greg Williams to Deputy Secretary Jeff Whalan
• the Cabinet Secretariat commenced reporting to Deputy Secretary David Borthwick
• the Ceremonial and Hospitality Branch commenced reporting through Gillian Bird to Deputy Secretary Andrew Metcalfe.

The International Division, which formerly reported directly to the Secretary, commenced reporting to Andrew Metcalfe early in 2003. Towards the end of 2002-03, arrangements were being finalised to transfer responsibility for supporting the National Security Committee of Cabinet and the Secretaries’ Committee on National Security from the International Division to the Cabinet Secretariat. Other new reporting arrangements await the formation of the National Security Division and the Cabinet Implementation Unit, details of which are in the Departmental Overview.

The Executive was responsible for guiding and monitoring corporate governance issues and providing strategic direction to the department. Its members chaired the department’s three management committees. These comprised the Audit Committee and two more recently established committees to oversee the critical issues of people, leadership and information, namely the People and Leadership Committee and the Information Management Strategic Advisory Committee. Details of the membership and role of each are set out below in Figure 7.

In consultation with division and branch heads, the Executive set the key targets for the financial year and provided the framework, through divisional and output work plans, within which the people and financial resources of the department were allocated.

The senior leadership team

As at 30 June 2003, the department’s senior leadership team comprised three Deputy and seven First Assistant Secretaries.

Responsibilities of the Deputy Secretaries were as follows:

• David Borthwick - the Economic Division, the Industry, Infrastructure and Environment Division and the Cabinet Secretariat which, together with the new Cabinet Implementation Unit, will form part of the new Cabinet Division from 1 July 2003
• Jeff Whalan - the Social Policy Division, the Office of the Status of Women and the People, Resources and Communications Division
• Andrew Metcalfe - the Government Division and the International Division, and the new National Security Division from 1 July 2003.

The responsibilities of the First Assistant Secretaries and their respective divisions were as follows.

Gillian Bird replaced Michael Potts as head of the International Division on 12 December 2002, following his departure to take up the position of High Commissioner to Papua New Guinea. The division supported the Prime Minister on international affairs, provided a whole-of-government perspective to advice on international issues coming before Cabinet, and coordinated advice to the Prime Minister on national security, defence, trade and aid policies. It was also responsible for administering the state occasions and official visits programme.

Jenny Goddard, head of the Economic Division, provided advice to the Prime Minister and his office on domestic and international economic conditions, developments in financial markets and the prospective economic outlook, financial sector policy, workplace relations and wages policy, fiscal policy and budget advice, taxation and superannuation policy, and Commonwealth-State financial relations.

James Horne, head of the Industry, Infrastructure and Environment Division, provided advice to the Prime Minister and his office on industry policy, sustainable development, agriculture, fisheries and forestry, environment and heritage, regional services, transport policy, communications, information technology, sport, tourism, energy and Commonwealth-State relations.

Joanna Davidson, head of the Social Policy Division, provided advice to the Prime Minister and his office on education, employment services, family policy, income support, community services, health and aged care, immigration, indigenous policy and veterans’ support.

Rosemary Calder, head of the Office of the Status of Women (OSW), completed her contract on 29 May 2003. Her successor, Kerry Flanagan, is expected to join the department on 3 July 2003. In the interim, Sandra Parker has been acting in the position. OSW provided advice to the Prime Minister and his office, and to the Minister Assisting the Prime Minister for the Status of Women and her office, on women’s issues, including economic security for women, women’s health and wellbeing, and measures to eliminate violence. OSW also administered the funding of specific programmes.

Barbara Belcher, head of the Government Division, provided policy advice on public administration, parliamentary and electoral matters, legal policy issues, the establishment of royal commissions, the implications of court decisions for the Commonwealth, matters relating to the arts, national collecting institutions and cultural heritage, and policy issues relating to Australian and foreign honours and the use of Australia’s national symbols. The division also provided a coordinating role in relation to domestic security and border protection following the Bali bombings.

Greg Williams, head of the People, Resources and Communications Division, oversaw the work of the department’s internal information services and corporate support services, including people management, finance and facilities, information technology, the library, records management and ministerial correspondence. The division also provided advice and support to the Ministerial Committee on Government Communications, managed the Central Advertising System and provided photographic services through AUSPIC.

Information on the remuneration of senior executives is set out later in this chapter.

Senior management and staff committees

The committees and their membership are set out in Figure 7.

The People and Leadership Committee met for the first time on 20 May 2003. The role of the committee will be to develop the department’s capability, with particular emphasis on people and leadership. It will provide strategic advice and support to the department’s senior executive group in setting the direction for people management and leadership through:

• ensuring links between the department’s strategic framework, business outcomes people management strategies and people’s day to day work
• identifying people management and leadership initiatives, particularly in the areas of career development, support and training
• examining flexible workplace practices that help and encourage people to balance their work and personal lives
• discussing and making recommendations on the department’s high-level strategic people management and leadership needs, for endorsement by the senior executive group.

The Information Management Strategic Advisory Committee, also formed in May 2003, will meet at least four times each year and has its first meeting scheduled for early July 2003. The role of the committee will be to provide advice to the department’s senior executive group on strategies and policy for the effective use of information resources and on the development of information infrastructure and services that support the department’s business outcomes. The committee is to:

• ensure alignment between the department’s business outcomes, information management strategies and people’s day to day work
• consider and make recommendations on the department’s high-level strategic information management needs to the department’s senior executive group for endorsement
• provide leadership and encouragement for cultural, process and organisational change as a result of information management initiatives.

The Audit Committee meets quarterly and assists the department in meeting its corporate governance responsibilities. It is chaired by the Secretary of the department. In accordance with the committee’s Audit Charter, the Secretary has nominated a Deputy Secretary to deputise as Chairman of the Audit Committee.

At the end of 2002-03, the Audit Committee included a First Assistant Secretary and two Assistant Secretaries. The Assistant Secretary, People and Resource Management Branch was also a member of the committee on an ex-officio basis and representatives of the Australian National Audit Office (ANAO) attended Audit Committee meetings as observers. Deloitte Touche Tohmatsu, the outsourced internal audit provider, also attended the Audit Committee meetings and provided secretariat support.

* Management committees.

The membership will provide a fresh perspective in discharging the committee’s obligations in relation to:

• oversight of the internal audit function, including ensuring appropriate action is taken in respect of recommendations
• review of policies relating to internal controls and the management of risks
• oversight of the development and implementation of the department’s fraud risk assessment and fraud control strategy
• ensuring effective accountability of programme managers to stakeholders.

The Consultative Committee - which comprises the chairman, four elected staff representatives, two union representatives and three management representatives - continued to be the department’s principal staff consultative body, meeting at least quarterly. The most significant outcome for the committee in 2002-03 was the negotiation of the department’s third certified agreement.

Corporate governance initiatives

To assist staff members in their understanding of corporate governance requirements, the department added new and revised guidelines to its resource management reference material on the intranet, covering: the rewards and recognition scheme to be introduced in 2003-04 to recognise significant contributions by staff outside the formal performance appraisal process; the new Certified Agreement 2002 - 2004; a workplace giving programme that enables staff to contribute on a regular basis to their favourite charity or non-profit group; a revised workplace diversity programme that continues to embrace the department’s commitment to providing a fair and equitable working environment for all staff; leave, remuneration and performance management in relation to those on Australian Workplace Agreements (AWAs); travel charge card procedures; absence from duty without permission; and a new occupational health and safety (OH&S) Risk Management Programme that provides a process for identifying and correcting hazards or potential hazards in the workplace. Staff members were notified of the changes and new initiatives on the intranet, by email and through the staff bulletin.

Other important activities undertaken by the department during the year included:

• publishing and distributing a brochure on the role and functions of the department
• reporting for the APS Commissioner’s State of the Service Report
• revising departmental guidelines on engagement in outside employment, non-Senior Executive Service (SES) staff selection, the skills and responsibility loading, extra duty payments and purchased leave
• completing the tender renegotiation for the department’s employee assistance programme.

In relation to financial management, the key corporate documents for use by officers of the department were the Chief Executive Instructions (CEIs), the Risk Management Plan, and the Fraud Control Plan. Those documents were made available to staff members through the departmental intranet site as a means of increasing their awareness of their responsibilities under the Financial Management and Accountability Act 1997 and in relation to the government’s policies regarding risk management and fraud.

The Audit Committee oversaw the department’s risk management strategies. These form an integral part of the department’s Risk Management Plan, which was introduced in 2001-02. This plan was supported by a Fraud Control Plan updated in 2001-02 to reflect the requirements of the government’s Fraud Control Guidelines. Both the Risk Management Plan and the Fraud Control Plan will be reviewed in 2003-04 with the aim of achieving a closer integration of the two.

The status of the department’s compliance with both the Risk Management Plan and the Fraud Control Plan continued to be reported to the Audit Committee on a biannual basis. There were no incidents of fraud identified within the department in 2002-03.

The People and Resource Management Branch developed the Business Resumption Plan, which draws together management responses to a broad range of business continuity risk scenarios that may confront the various divisions of the department. The plan was prepared in accordance with the guidelines issued by Emergency Management Australia and is consistent with the risk management strategies outlined in the department’s related risk management plans.

The department also had in place a Security Plan which reflected the minimum standards and requirements of the Australian Government’s Protective Security Manual.

Internal audit and fraud control

In 2002-03, the department’s Audit Committee considered 13 internal audits documented in the department’s strategic audit plan, that ranged from simple compliance reviews to more complex comprehensive reviews covering both compliance and performance assessment. Significant audits conducted during the year included those of:

• arrangements for the procurement of printing services - the report found that, on the whole, the department’s printing requirements constituted only a small component of departmental expenses and therefore there were no significant savings to be gained by changing established practices
• procedures relating to the management and evaluation of consultants and contracts - generally, the report found a demonstrated high level of awareness throughout the department of the requirements in relation to procurement and management of contracts
• procedures relating to hospitality - the report found that the forms required for approval of expenditure on the provision of hospitality were not always completed by staff, because of a lack of clarity concerning the definition of ‘hospitality’; the committee accepted the recommendations of the report, agreeing to amend the relevant guidelines to provide clearer definitions for staff
• provision of administrative support to divisions - this review identified mixed levels of compliance with relevant guidelines between divisions; management agreed with the committee’s recommendations, which aimed to raise the standard and consistency of compliance across all areas of the department.

There were two follow-up reviews conducted during the year to assess the extent to which recommendations of previous reviews had been implemented. The follow-up reviews related to Cabinet documents, asset tracking and database management. The reviews found high levels of compliance with procedures and that the recommendations of the previous reviews had experienced high levels of implementation.

Ethical standards

Ethical standards appropriate to APS employees were promoted by publicising the APS Values and Code of Conduct specified in the Public Service Act 1999 through the intranet and during induction courses for new staff. Departmental guidelines on working with the code of conduct and on understanding the APS values formed an integral part of the human resource management framework and were readily accessible to staff through the intranet. In addition, the department regularly distributed promotional material such as the APS Commission’s bookmark on the APS Values and the Code of Conduct.

Freedom of information

In 2002-03, the department received 26 requests - one fewer than in 2001-02 - for access to documents under the Freedom of Information Act 1982 (the FOI Act). The documents covered a range of administrative activities undertaken by the department. The department received two applications for internal review of FOI decisions. There were no new applications for review made to the Administrative Appeals Tribunal in relation to departmental FOI decisions.The tribunal heard two applications, made during 2001-02 by the one applicant, for the review of departmental decisions under the FOI Act as reported under Output 4.2, Machinery of Government. At the end of the reporting period the tribunal’s decision on the two related applications was pending.

Information about the department’s FOI procedures and about access to departmental and archival records in various categories appears in Appendix 2. More information on FOI activity is to be found in the annual report on the operation of the FOI Act produced by the Attorney-General’s Department.