Royal Commission Interim Report gives governance professionals much to ponder

Thursday 31 October saw the release of the Interim Report by the Royal Commission into Aged Care Quality and Safety — which provided some confronting and cautionary tales on the real consequences that can result from poor governance. The overall picture painted by the Interim Report was of a dysfunctional sector in need of comprehensive reform — including its governance processes.

The Interim Report sets out the Commission’s findings to date, draws some preliminary conclusions and outlines key areas that the Commission will focus on over the next 12 months. The Report foreshadows a fundamental overhaul of the design, objectives, regulation and funding of aged care in Australia, with the Commission’s Final Report due to be handed to the Governor-General on 12 November 2020.

The Interim Report, titled ‘Neglect’, is broken into three volumes, which are available here via the Commission’s website. 

One of the inevitable considerations for governance professionals arising out of the Report will be: ‘To what extent could the poor outcomes for people in aged care have been avoided with better governance?’

The Commission gives an indication of its views on the accountability and transparency of the sector in the following section, from the Foreword of the Interim Report:

The aged care system lacks fundamental transparency. Witnesses from the Australian Department of Health told us that there is very little information available to the public about the performance of service providers. The number of complaints… The number of assaults in their services…[and] The number of staff they employ to provide care are not published (p8).

The Report also comments on the effectiveness of the sector’s regulatory regime:

We have heard evidence which suggests that the regulatory regime that is intended to ensure safety and quality of services is unfit for purpose and does not adequately deter poor practices… [it] appears to do little to encourage better practice beyond a minimum standard.

Governance Institute CEO Megan Motto said that while better regulation and greater funding could address some of the failures identified in the Report, the cultural challenges identified by the Commission also pointed to a need for improved standards and processes in governance.

“From a governance point of view, there are some common learnings here and from the banking and financial services royal commission, particularly around the importance of managing non-financial risks.

“Non-financial risks take on an added level of importance in the health sector, as operational failures or staff negligence can have major and immediate ramifications on the wellbeing of vulnerable people in aged care,” she said.

To address the urgent need for reform in the sector, Governance Institute has already partnered with Leading Aged Services Australia (LASA), which has seen governance and training provided to boards and management over the course of several months.

Megan Motto said that the Interim Report’s findings underscored the need for organisations and staff across the sector to improve or refresh their training in governance.

“I strongly recommend that managers and directors/board members in Aged Care, consult our guide, which advises on navigating key issues, such as workforce planning, regulatory compliance and financial sustainability.”

The guide is available as a free resource online via the Governance Institute’s website.

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