Corporate Governance

Page Index

• Corporate goals and values
• The Executive
• The senior leadership team
• Management committees
• Corporate governance initiatives
• Internal audit and fraud control
• Ethical standards

A collegiate leadership, driving an ethos of cooperation, and bound by effective lines of communication, can achieve outcomes that are far more than the sum of the parts that have been brought together. What emerges is policy which, driven by creative tension between different perspectives, is better informed and argued than could have been provided by a single agency.

Dr Shergold in a speech entitled ‘Connecting Government: Whole-of-Government Responses to Australia’s Priority Challenges’ to launch the APS Management Advisory Committee Report No. 4, 20 April 2004

Corporate goals and values

As stated in the Portfolio Overview chapter of this report, the department shares a mission with the other agencies in the Prime Minister’s portfolio:

to achieve well coordinated, efficient and accountable public administration, supported by a values based Australian Public Service.

The department’s corporate goals, derived from that mission, 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:

• timely, responsive and 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
• broad career opportunities for staff
• a stimulating and caring work environment.

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The Executive

The Executive comprises the Secretary and three Deputy Secretaries.

Associate Secretary Russell Higgins headed the Energy Taskforce which prepared the white paper, Securing Australia’s Energy Future, released by the Prime Minister on 15 June 2004. Mr Higgins concluded his work with the department on 30 June 2004.

In September 2003, Deputy Secretary Jeff Whalan accepted appointment as Managing Director of the Health Insurance Commission, and was replaced by Deputy Secretary Patricia Scott, who joined the department from the Department of Industry, Tourism and Resources. In February 2004, Deputy Secretary David Borthwick was promoted to Secretary of the Department of the Environment and Heritage, and his position was filled in an acting capacity by Jenny Goddard (who was subsequently promoted to the position after 30 June 2004).

The senior leadership team

As at 30 June 2004, the department’s senior leadership team comprised the Secretary, three Deputy Secretaries, and nine First Assistant Secretaries each covering one of the department’s nine divisions. Those divisions were: International Division; Government Division; Social Policy Division; the Office of the Status of Women; People, Resources and Communications Division; Economic Division; Industry, Infrastructure and Environment Division; and—following the execution of the organisational restructure foreshadowed in the 2002–03 Annual Report—National Security Division and Cabinet Division (which incorporates the newly formed Cabinet Implementation Unit).

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Senior leadership responsibilities

The Secretary, as the Chief Executive Officer, is responsible for providing the overall leadership of the department, and shaping its future. He is responsible for determining priorities and appropriate resource allocations, delivering organisational performance and directing high-priority initiatives. He is also responsible for providing overall leadership to the APS.

In consultation with the Deputy Secretaries, the Secretary is responsible for guiding and monitoring corporate governance issues and providing strategic direction in the department. Together with division and branch heads, the Executive jointly set the key targets for the financial year and provided the framework, through divisional and output workplans, within which the people and financial resources of the department were allocated.

Reporting arrangements for each of the Deputy Secretaries were as follows.

• Social Policy Division, People, Resources and Communications Division and the Office of the Status of Women reported to Deputy Secretary Patricia Scott.
• International Division, National Security Division and Government Division reported to Deputy Secretary Andrew Metcalfe.
• Cabinet Division, Economic Division and Industry, Infrastructure and Environment Division reported to Acting Deputy Secretary Jenny Goddard.

The responsibilities of the First Assistant Secretaries were as follows.

Gillian Bird, head of the International Division, supported the Prime Minister on international affairs, providing a whole-of-government perspective to advice on international issues coming before Cabinet, and coordinated advice to the Prime Minister on foreign affairs, trade and aid policies. In addition, the division was responsible for administering the state occasions and official visits programme.

Miles Jordana, head of the National Security Division, provided whole-of-government advice to the Prime Minister and his office on national security issues and on defence and intelligence matters. In addition, the division provided secretariat and policy support to the National Counter-Terrorism Committee and the Australian Government Counter-Terrorism Policy Committee.

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.

Joanna Davidson, head of the Social Policy Division, provided whole-of-government 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. The division also provided support to the secretaries’ group (formed in May 2004) supporting the Ministerial Taskforce on Indigenous Affairs.

Kerry Flanagan, head of the Office of the Status of Women (OSW) since 3 July 2003, 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 people trafficking, child care and women’s issues, including economic security for women, women’s health and women’s wellbeing, and in relation to a major campaign against domestic violence. OSW also administered the funding of specific programmes and consulted widely with stakeholders in the preparation of its advice.

Greg Williams, head of the People, Resources and Communications Division, provided advice and support to the Ministerial Committee on Government Communications, managed the Central Advertising System and oversighted photographic services through AUSPIC. In addition, the division provided the department’s internal information services, covering information technology, library services, records management and ministerial correspondence. The division also provided support functions in regard to people management, finance, corporate governance, facilities, personnel and physical security.

Peter Hamburger, head of the Cabinet Division since its inception in August 2003, provided support to the Prime Minister and to Cabinet on the full range of Cabinet and Cabinet committee business, as well as providing support for the Federal Executive Council. In addition, the division was responsible for monitoring the implementation of government policy through the Cabinet Implementation Unit which became operational in October 2003.

Stuart Sargent, acting head of the Economic Division since February 2004 (vice Jenny Goddard who was Acting Deputy Secretary), provided whole-of-government advice to the Prime Minister on domestic and international economic conditions and prospects; developments in financial markets; financial sector policy; workplace relations and wages policy; fiscal policy and budget initiatives; taxation and superannuation policy; and Commonwealth–state financial relations.

James Horne, head of the Industry, Infrastructure and Environment Division, provided whole-of-government advice to the Prime Minister on a wide range of policy issues covering industry; national competition payments; sustainable development (with a particular focus on water); agriculture, fisheries and forestry; environment and heritage; regional services; transport; communications; information technology; sport; tourism; energy; and Commonwealth–state relations.

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Senior leadership groups

The Executive Group is made up of the Secretary and the three Deputy Secretaries. It assists the Secretary in meeting his obligations as agency head by managing high‑level corporate strategy, determining internal resource allocation and coordinating the involvement of the Executive in the leadership of the department. The Executive Group meets fortnightly.

The Corporate Leadership Group is the key corporate forum which meets on the alternate fortnight to the Executive Group and is attended by the Secretary, the Deputy Secretaries, the First Assistant Secretaries and the Assistant Secretary, People and Resource Management Branch. Its role is to provide active and visible strategic leadership to the department. It is responsible for setting overall directions and ensuring the department’s structure, culture and resources are aligned to meet its agreed outcomes, through:

• formulating and communicating the strategic directions and priorities for policy, program management, service delivery and performance
• allocating, reviewing and re-allocating (where necessary) resources, and developing plans to meet the department’s current and future priorities
• sponsoring good governance and promoting the APS Values and Code of Conduct and departmental behaviours and values
• generating a workplace environment marked by practical commitment to developing and harnessing the diverse skills of people in the organisation, open communication, and high levels of collaboration.

The relationships between the two senior leadership groups and the other elements of the department’s decision-making structure are shown in Figure 8.

Figure 8 Leadership and management committee structure

Figure 8 text description

Management committees

Five management committees assist the Secretary and play a vital role in the department’s decision-making processes.

Following the release by the Australian National Audit Office (ANAO) of its Better practice guide on corporate governance in July 2003, the department’s Audit Committee commissioned an evaluation of our corporate governance arrangements. As a result of the audit, during the year the department’s internal committee structures were tightened and a more clearly articulated role and purpose for each of the management committees was developed.

Three of the department’s high-level management committees—the Audit Committee, the People and Leadership Committee and the Information Management Strategic Advisory Committee—were chaired by members of the Executive.

A fourth committee, the Security Committee, was established by the Secretary in March 2004, with its first priority being to review and disseminate internal guidelines on how to protect confidential and sensitive documents. That committee was chaired by Greg Williams, who is responsible for the People, Resources and Communications Division.

The department also supported the Consultative Committee, the principal function of which is to provide a forum for consultations between employees and managers and to develop the department’s next certified agreement. The Consultative Committee was chaired by a member of the Executive.

Collectively, these committees provided a continuous source of information and advice to the Executive and Corporate Leadership groups during 2003–04. Figure 9 shows the membership of each of committee, while the committees’ functions are described in more detail in the following section.

ANAO = Australian National Audit Office; CPSU = Community and Public Sector Union; ISB = Information Services Branch; MEAA = Media, Entertainment and Arts Alliance; PRM = People and Resource Management Branch; SES = Senior Executive Service; TBA = to be announced.

a Meetings are held quarterly.

b Meetings are held as required.

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People and Leadership Committee

The People and Leadership Committee assists and supports the Corporate Leadership Group by developing the department’s capability, with particular emphasis on:

• 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 Corporate Leadership Group.

The key outcomes of the People and Leadership Committee this year included:

• the delivery and analysis of a staff survey
• the introduction of a comprehensive orientation programme
• improved workforce reporting
• an improved graduate programme, including a two-week orientation
• the introduction of the Career Advisory Panel
• the establishment of the Rotations and Secondments and Performance Management taskforces
• the introduction of a ‘village-style’ staff newsletter, in colour, including regular messages from the secretary, staff profiles, social news, anecdotal material and other topical items
• the opening of a new coffee shop.

These are described in more detail in the People Management section of this chapter.

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Information Management Strategic Advisory Committee

The Information Management Strategic Advisory Committee provides advice to the Executive Group on strategies and policies for the effective use of information resources, and on the development of information infrastructure and services that support the department’s business outcomes. Significant achievements for the committee in 2003–04 were the endorsement of both a strategic framework for information management and the Library Services Strategic Plan.

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Audit Committee

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.

The membership of the Audit Committee includes three Assistant Secretaries, and the Assistant Secretary, People and Resource Management Branch, participates on an ex-officio basis. Representatives of the ANAO attend Audit Committee meetings as observers, as do non-SES departmental staff. A representative of Deloitte Touche Tohmatsu, the outsourced internal audit provider, also attends the Audit Committee meetings and provides secretariat support.

The Audit Committee objectives are to:

• assist the Secretary and Executive Group in ensuring the department meets its corporate objectives
• ensure that effective accountability and governance strategies, practices and policies are available to departmental staff; monitor the suitability and relevance of these elements; and decide on changes in consultation with the Executive Group
• promote an ethical climate in the department
• provide a forum for communication between the Executive, senior managers of the department and the department’s internal and external auditors.

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Consultative Committee

The Consultative Committee consists of both management and staff representatives and provides a forum for consultation between employees and managers on workplace relations matters and on issues of corporate significance, such as the departmental Certified Agreement. Its membership comprises the chairman, four staff representatives and three management representatives. The current Certified Agreement covers the period until September 2004. New staff representatives were elected to the Consultative Committee in March 2004 and negotiations for the department’s fourth Certified Agreement commenced on 28 April 2004.

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Security Committee

The Security Committee was established to:

• develop clear departmental guidelines on handling official government information
• develop and instigate a programme of staff education and training
• instigate new distribution controls, where appropriate
• review the protective security environment in the department against the requirements of the Protective Security Manual.

As at 30 June 2004, the committee had conducted a full assessment of existing departmental guidelines, with the aim of producing a consolidated yet succinct guide to assist staff to quickly access more detailed information on document handling.

Corporate governance initiatives

The new Corporate Governance Unit was established during the year, with responsibility for issues including internal audit, fraud, risk management and contracts. In accordance with its specialised role, it continued and enhanced the corporate governance work initiated in 2002–03. This included:

• drafting a corporate governance framework to clearly articulate the roles and responsibilities within the departmental committee structure
• reviewing and amending departmental standard contracts to incorporate additional contract clauses on PAYG (pay-as-you-go) taxation and superannuation contributions, and on skills and knowledge transfer clauses
• providing practical advice and assistance to staff required to handle procurement and contracting issues
• continuing a review of the Chief Executive Instructions (CEIs)
• developing a program tailored to provide ongoing training for delegates and procurement staff regarding their responsibilities under the Financial Management and Accountability (FMA) Act 1997 and the FMA Regulations.

On behalf of the department, the unit also took part in the Comcover Risk Management Benchmarking Survey, which is intended to assist agencies to develop and improve risk management techniques within their organisations. The survey results will enable individual APS departments to determine which of those areas within their overall risk management strategies require further development, are at an appropriate level, or are already highly developed.

Monthly Corporate Reports to the Secretary were reviewed as part of an internal audit review of management reporting, which recommended, among other things, that more emphasis be placed on results against performance standards. All 10 recommendations were implemented progressively over the year. As a result, the monthly reports now provide the Secretary and the Executive with a more targeted snapshot of progress on the specific issues of financial performance, human resource matters, security, freedom of information, and ministerial correspondence.

Monthly meetings of the department’s Divisional Support Unit managers were formalised and re-energised, to encourage discussion on topical issues in relation to administrative procedures and processes pertinent to their divisional support role.

In relation to financial management, the latest versions of key corporate documents such as the CEIs, the Risk Management Plan and the Fraud Control Plan continued to be made available on the departmental intranet site and accessed by staff in their day to day activities. As at 30 June 2004, work was in progress on the complete overhaul of the Risk Management and Fraud Control plans.

The department’s Business Continuity Plan, which draws on a broad range of other documents (including the Risk Management Plan, the Departmental Security Plan, the Fraud Control Plan and the Financial Management Information Systems Business Continuity Plan) was fully updated during the year, to ensure its continuing validity. The revised plan will be tested regularly through a variety of mechanisms and at meetings of the Corporate Leadership Group.

Internal audit and fraud control

In 2003–04 the department’s Audit Committee presented and considered 16 internal audits, comprising a mix of compliance and assurance reviews that covered a wide range of internal administrative matters. Significant internal audits conducted during the year are summarised below.

In addition, reviews of post-payment checking were conducted on a quarterly basis. No significant issues emerged from these reviews.

To assist the Audit Committee to track more efficiently the progress of the implementation of audit recommendations, an audit report recommendations database was developed and commenced being tested.

The Secretary has certified that appropriate fraud prevention, detection, investigation and reporting mechanisms and processes are in place and effective, as required by the Commonwealth Fraud Control Guidelines.

Review of management reporting

This review found that the Secretary was generally satisfied with the focus of the monthly Corporate Reports submitted to him on matters of an administrative nature, including the setting of performance targets. However, the review called for improved presentation and meeting of targets. These improvements were put into effect.

Review of AUSPIC

This review recommended that a number of administrative matters, such as the recovery of overdue debts and the staffing of administrative support, be addressed. All its recommendations were accepted and implemented.

Review of contract management

This review recommended that the CEIs be amended to: include a summary of all reporting requirements; improve guidance on intellectual property in contracting; and improve the robustness of the procurement processes. The review also recommended the introduction of training on how to undertake procurement risk assessments. Most recommendations were fully implemented during the year, and action has commenced to implement the others.

Review of the Australian WomenSpeak Conference 2002

The recommendations resulting from this review included advice on internal administrative processes and procedures including financial, purchasing and formal feedback mechanisms for future conferences. All the recommendations were implemented.

Corporate governance review

The report of this review was presented to management late in 2003–04 and is awaiting a final response. Many of the draft recommendations have already been implemented.

Ethical standards

The department continued to promote ethical standards appropriate to APS employees 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 Code of Conduct.

The importance of understanding and maintaining high ethical standards will be further emphasised by incorporating the requirements for adherence to ethical principles in the new Certified Agreement.