Review of public sector board appointment processes

The Governance Institute’s submission into a review of Public Sector Board Appointment Processes has called for the implementation of key recommendations from its recently updated Public Sector Principles including clear governance frameworks, an effective board and board diversity.

It follows the 2022 Governance Institute’s Ethics Index which found the perception of ethical behaviour on the part of government declined significantly from the previous year and that Federal politicians were among the occupations perceived to be least ethical.

Governance Institute CEO Megan Motto said trust is the vital link between public integrity and good governance.

‘Good governance in the public sector means that Government is entrusted by the public to govern in and for the public interest, and not for improper or extraneous purposes,’ Ms Motto said.

‘Our members consider it is critical that there is a robust, merit-based process for the appointment of public sector board members.’

Governance Institute developed the Public Sector Principles with the knowledge that while there are differences between the ways boards in the public and private sector operate, they also have many features in common.

Some of the recommendations directed towards achieving a strong governance foundation in all types of public sector organisations include:

• establishing a clear governance framework where all involved understand their roles and responsibilities
• setting a long-term strategy that aligns with government policy priorities
• the importance of balancing the public interest
• establishing a delegation framework
• clearly distinguishing between the roles of board and management and importantly having a shared understanding of the distinct roles, and
• regularly evaluating the performance and competence of management

‘Implementing these Recommendations in a public sector organisation will mean that all involved in the governance process are clear about their roles and responsibilities, are making decisions for the long-term, understand the importance of the public interest and hold those responsible for implementation of strategy to account,’ Ms Motto said.

‘Good governance practices and acting with integrity in the public sector will enhance public trust, while poor governance and a lack of integrity erode it.’

The submission also included a series of recommendations to achieve boards of an appropriate size, composition, skills mix, diversity and level of independence from government to enable it to discharge its duties and meet its objectives effectively.

‘Our members acknowledge that the appointment of public sector board members is a ministerial responsibility but suggests that boards should ensure government is appropriately advised about the required and desirable skills, competencies and attributes that align to the entity’s strategy so a fully informed decision can be made.’

Governance Institute’s members strongly support diversity and inclusion and the importance of tangible efforts to increase the representation of women, diverse ethnic groups, age groups, people with disabilities, and First Nations peoples’ on government boards.

You can download a copy of our Governance principles for boards of public sector entities in Australia 2023 here.