Aged Care Royal Commission report says governance “essential” to recovery: Governance listed as one of five pillars in Federal Government’s response

Governance Institute of Australia has welcomed the release of the final report from the Aged Care Royal Commission today, saying it shines a much-needed spotlight on governance failures in the embattled sector.

Of the 148 recommendations contained in the 2,828-page report, at least seven relate directly to provider and system-wide governance issues.

Governance has been listed as one of the five pillars in the Federal Government’s ‘five-year roadmap’ in its initial response to the report today.

As part of its response, the government has announced that around 3,700 senior leaders (boards and senior executive) will receive governance training.

Governance Institute of Australia CEO Megan Motto said this is a much-needed start at tackling the governance issues currently plaguing much of the sector, but more action will be needed.

“Good governance is driven from the top and the targeted training for directors and executives announced today is an excellent initiative,” Ms Motto said.

“However, looking at the scale of governance failure unearthed in the report, there is clearly much more to be done.”

Core governance issues raised in the Aged Care Royal Commission final report include:

• The establishment of an ongoing training program for aged care industry directors to help improve their governance arrangements.
• A number of recommendations on how aged care boards should be structured, including that a majority of board directors be independent unless an exemption is granted. Governance Institute will review these closely to consider their potential impact on small providers.
• A call for a “thorough systemic redesign” including “new, robust governance arrangements”.
• Better protections for whistleblowers.

Ms Motto said Governance Institute will now work through the recommendations in detail, but it is clear that a governance-led recovery must now take place.

Culture is identified in the report as a major factor for organisations, with Governance Institute referenced by the Commissioners: “As the Governance Institute of Australia explains, values and behaviour determine and define organisational culture. Governance arrangements reflect and promote the culture of an organisation.”

Ms Motto said Governance Institute will await the Federal Government’s full response to the report, which the Royal Commission has requested by 31 May 2021.

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Media contact: media@governanceinstitute.com.au.

About Governance Institute of Australia
A national membership association, advocating for a community of more than 43,000 governance and risk management professionals from the listed, unlisted and not-for-profit sectors. Our mission is to drive better governance in all organisations, which will in turn create a stronger, better society.