Robust governance

In this section:

Good governance is about the processes for making and implementing decisions. It is not necessarily about making ‘correct’ decisions, but about the best possible process for making those decisions (VLGA, 2016).

The multifaceted accountability and oversight framework public authorities operate within provides the community with a degree of trust and confidence in authorities. People are more likely to have confidence in authorities, if they can be assured public officers are acting in the public interest and decisions are being made with integrity and transparency. Having robust governance structures, and ensuring these processes are implemented and practiced within an authority requires vigilance and a continuous improvement approach so trust is sustained.

‘The integrity of our systems and our people is critical to building trust. And when our standards of integrity are not upheld, public trust quickly unravels.’

Eccles, C., 2017, Governing in an era of distrust.

Relationships between Ministers and senior leaders

Governance in a public sector context has several dimensions—one of the most important is the brelationship between a Minister and the Director General or Chief Executive Officer (CEO) of a public sector agency. An agency’s elationship with Government, must be clearly and transparently articulated to prevent any undue influence in administration, and to ensure policy decisions and strategies can be quickly implemented. This is achieved through CEO performance agreements.

As a result of structural change in the public sector, there will be a new key performance indicator and performance assessment model as Government implements its policy to link CEO remuneration to outcomes. These new governance arrangements will take some time to implement, particularly where significant collaboration and cooperation will be required to achieve outcomes. All parties to these agreements will take time to adjust to these new processes.

Another formalised governance arrangement between a Minister and agency is through communication arrangements, required under the PSM Act. These arrangements need to be current and contemporary, taking into account new portfolio arrangements and the dynamic and responsive nature of work.

Communication arrangements need to be real tools—beyond simple compliance—to guide these important relationships in a complex environment.

The structural change has also brought multiple-Minister accountability in many amalgamated departments for example, one new Director General now reports to five Ministers. This has significant implications for effective governance.

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Relationships between boards or councils and senior leaders

Some public sector leaders and all leaders in local governments, public universities and government trading enterprises have accountability to a governing board or council. Again, these governance arrangements require clear definition and articulation through charters, ethical codes, governance frameworks and decision-making procedures. This articulation ensures the board or council can appropriately shape, enable and oversee the authority’s management.

Corporate executive groups

The corporate executive team is generally a team of senior leaders who have responsibility for both the day-to-day tasks of running an authority and its strategic direction. The success of the executive depends on the willingness and ability of the entire group to address not just their individual functional responsibilities, but also their collective responsibility. Only senior leaders can rise above the details of the business, recognise emerging patterns, make connections, and identify points of maximum leverage for action (HBR, 1995).

Corporate executive groups, and the policies and processes they set and monitor, are a critical part of public authorities’ governance arrangements. With structural changes in the public sector, the governance framework in amalgamated departments will be emerging, as mature structures, and policies and processes from pre-existing agencies are replaced with immature ones. Research suggests for new executive teams, those that are most effective will initially focus on working together to get early results in their efforts to deal with important business issues and then reflect together on the manner in which they did so, therefore discovering how to function as a team (McKinsey, 2001).

Governance and integrity

The ultimate aim of a government is to safeguard public interest through an efficient and effective governance system that enhances the protection of rights, and demonstrates accountability and integrity in its daily activities and from its public officers (Mutula and Wamukoya, 2000). Management’s commitment to integrity and setting the tone from the top is an important precondition for strong engagement, culture and decision making. Forty-three per cent of public sector agencies report integrity and conductrelated matters are standing items on the corporate executive agenda, and over half (53 per cent) say oversight of integrity and conduct-related matters lies with the CEO. While management commitment is important, all public officers have a role to play in upholding the authorities’ governance frameworks by following policies and processes and practicing appropriate behaviours.

Ethical codes

Ninety-three per cent of public sector employees surveyed reported being familiar with their agency’s Code of Conduct—a foundational governance tool. This is unsurprising as 81 per cent of public authorities reported requiring employees to read and sign a declaration of commitment to the code either during pre-employment or induction, and a further 40 per cent of authorities require sign off when the code is updated. Six per cent of authorities never require employees to acknowledge the code.

While familiarity is high, only 60 per cent of public sector employees surveyed said they had read or referred to the code in the past 12 months. At the same time, 69 per cent of employees say senior leaders regularly communicate the importance of ethical behaviour. This suggests authorities and leaders have more work to do in promoting the code as a practical tool for guiding behaviour.

All public sector agencies report having a code, as required by Commissioner’s Instruction No. 8 – Codes of conduct and integrity training. Two-thirds (66 per cent) of agencies reported completing a formal review of the code in the past two years, with 12 per cent not having updated the code for more than two years. Sixty-four per cent of other authorities report completing a formal review in the last two years. The Commission recommends authorities update their code every two years to keep pace with changes in legislation and other instruments, reflect emerging integrity risks and community attitudes.

As codes are not uniformly mandatory in other authorities, eight per cent indicated they had no Code of Conduct, potentially making developing a high-integrity culture more difficult.

In the past year there were 1725 discipline processes completed in public authorities. These processes looked at 2349 allegations of unethical behaviour and 1258 allegations were determined to be a breach of discipline. The community should be confident that authorities have the required mechanisms, and capability, in place to deal with instances of unethical behaviour when they arise. The fact that 1091 allegations were not substantiated, but were effectively and appropriately managed within authorities, is a positive outcome for the sectors.

Performance management

Effective governance relies on engaged employees who understand what is required and expected of them. Employee’s clearly knowing where their role fits within the broader organisational framework can help to avoid problems emerging from lack of clarity (Governance Directions, 2015). As workforces become more dynamic, regular and structured, performance management enables managers to ‘check in’ with employees to clarify roles and expectations. Sixty-seven per cent of public sector employees surveyed (who were employed at their agency for over 12 months) reported having at least one performance management meeting with their direct supervisor. Of those, 71 per cent reported expectations of appropriate behaviour in the workplace were discussed.

Only around half (53 per cent) of public sector employees perceived their immediate supervisor dealt appropriately with under-performance. Having difficult conversations about poor performance remains a capability challenge for leaders and managers, and requires further attention across the sectors.

Governance is reinforced through strong leadership (Governance Directions, 2015) monitored through robust performance management processes between CEOs and Tier 2 leaders. Two-thirds (66 per cent) of public sector agencies reported integrity and conduct-related matters were discussed between senior leaders during formal performance management discussions.

74% agree their immediate supervisor provides them with regular feedback about their performance

50% of public sector agencies reported 60 per cent or more of their staff had documented performance management meetings over the last year

Why is performance management essential?

  • It supports the authority and its employees achieve organisational goals
  • It is a mechanism through which the authority can systematically improve organisational performance by aligning individual, team and authority objectives
  • When undertaken effectively, it can assist employees to understand what they do well and clearly identify how they can improve their performance
  • When employees are committed and performing to their full capabilities, the authority will be able to function most effectively

 For more information visit Performance management in the public sector on our website

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Public interest disclosure

Processes for encouraging and protecting employees to speak up about wrongdoing and integrity concerns are vital to integrity and good governance systems in organisations (Griffith University, 2017).

Sixty-one Western Australian authorities contributed survey responses to the latest joint research initiative by Griffith University’s Centre for Governance and Public Policy and the Australian Research Council into public interest disclosure (PID) practice in Australia and New Zealand.

Running from 2015 to 2019, ‘Whistling While They Work 2: Improving managerial responses to whistleblowing in public and private sector organisations’ (WWTW 2) builds on its 2011 predecessor ‘Whistling While They Work’ by exploring the adequacy of organisational responses to whistleblowing.

The 2011 research found that Western Australian public authorities ranked third behind the New South Wales and Australian public services in having comprehensive PID procedures (Griffith University, 2017). This year, 69 per cent of authorities reported having published PID procedures and 91 per cent have at least one designated PID officer to receive disclosures. Authorities use a variety of methods to identify and select PID officers as outlined to the right. Authorities should ensure they meet legislative requirements by ensuring appropriate internal procedures are in place to manage a potential disclosure.

Results from the survey conducted as stage 1 of the WWTW 2 project show that in terms of supportive organisational responses to whistleblowing, there is room for improvement. Australian public sector jurisdictions provide the strongest frameworks for blowing the whistle without serious personal consequences compared to the private or notfor-profit sectors. Seven Australian public sector jurisdictions–including Western Australia–performed better than the average across five key dimensions described as: incident tracking; support strategies; risk assessment; dedicated support; and remediation (Easton, 2017). Commission survey data reveals there appears to be a lack of formal practice to support people who speak up.

When asked about follow-up mechanisms after an employee reports unethical behaviour, only seven per cent of public authorities said they surveyed or interviewed reporters after the process, four per cent track any changes to the reporter’s position or contract, and only five per cent track the reporter’s use of leave entitlements following reporting. Survey data and research findings suggest there is an opportunity for public authorities to more closely monitor the welfare, wellbeing and engagement of internal reporters after exposing unethical behaviour. This in turn may assist with normalising a ‘speak up’ culture within public authorities.

How public interest disclosure officers are identified and selected

  1. From working in positions of trust, such as Chief Finance Officers or legal counsel
  2. Having particular knowledge, skills or qualifications, such as investigators or auditors
  3. Because they report directly to the CEO or governing body
  4. Through self-nomination
  5. Nominated by managers
  6. From working in high-risk line areas

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Page last updated 19 October 2017