Page 5226 - Week 14 - Wednesday, 18 November 2009
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I have already quoted this but I will quote it again. Mr Stanhope gave some interesting reflections on the role of board members. In an interview on an ABC Triple 6 program on 3 September 2009, when he was talking about how Actew advises the government on what happens, in the course of his comments he said:
… is an independent statutory authority. We’ve created it to make these sorts of decisions on behalf of the Government, because it requires a range of skills and expertise that aren’t necessarily vested in government.
He went on to say:
I know nothing about building dams; I know nothing about building pipelines. So, that is why we have an independent statutory authority staffed by the most competent people.
The Chief Minister was quite clear and unequivocal about the role of boards of statutory authorities: such authorities are established to perform particular purposes that are not suited to be performed by the government directly. The people who are appointed to the boards of those authorities have expertise that is specific to the activities of these authorities. Consequently, it is inappropriate to appoint public servants to a board where these people do not bring specific skill sets to the activities of the board, and this means commercial skill sets in particular.
I think we need to go back to the original intent of the corporatisation model. The proposal in 1990 sought to have territory-owned corporations, TOCs as we call them, that followed key principles, including:
• independence—ownership to be separate from management;
• performance—the board of the TOC be responsible and accountable for outcomes;
• structure and operations—the principal objective of each TOC is to be a successful business and to operate efficiently and, most importantly, board members are to be appointed having regard to the commercial and/or other expertise in the strategic management of the TOC.
A key principle in the 1990s, when we started to set these things up, was the commercial or other relevant expertise of people chosen to be board members.
We then have to look at the conflict between Corporations Law and government policy. The Treasurer touched on this. A person appointed to a board is first and foremost a member of that board. A person may have other employment, other interests and represent other constituencies but, as a member of a board, the person must exercise the responsibility of being on that board. Hence, if a person is both a public servant in the ACT government and a member of a board, there is a potential for significant conflict in responsibilities. On the one hand, there may be a requirement for the board to take action to enhance commercial activities of the entity but this action may be contrary to the interests of the government of the day. And it is not helpful to place a person in awkward situations unnecessarily. A person is appointed to a board for the contribution they can make to the objectives of the entity.
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