Chapter 9: Agency governance

Abbreviations

A list of the abbreviations used in this report is available in the Glossary

The relationship of governance to key employee engagement indicators

Table 9.1 sets out the results for a number of governance related questions included in the employee survey. Some of these results are covered in more detail in Chapter 4 and Chapter 11 but are included here for comparison with the core governance items. Results against the individual items are generally strong, with a majority agreeing against all but one question, and the level of disagreement against any particular question no higher than 20%. When combined in a summary 'Governance' factor, the average response for these questions was 65% with only 5% disagreeing-a very impressive result (see Appendix 4 for more information on factor analysis).

Table 9.1: Governance related items ordered by level of agreement, 2005–06
	Agree (%)	Neither agree nor disagree (%)	Disagree (%)	Not sure (%)
My organisation actively encourages ethical behaviour by all of its employees.	85	11	4	0
My agency has policies and procedures in place that assist employees manage conflicts of interest.	71	17	7	5
My agency provides me with information about updates, changes or revisions that relate to financial and other delegations.	70	18	8	4
My agency has policies and procedures in place to ensure that appropriate assessments of risk are conducted.	69	18	7	5
My agency operates with a high level of integrity.	67	22	9	2
I understand how my agency’s decision-making processes operate (e.g. relevant committee structures and how committees are linked).	64	21	14	1
I know where I can find my agency’s Chief Executive Instructions (CEIs).	63	12	20	5
My manager would take appropriate action if decision-making processes were found not to be objective.	63	20	12	6
In general, employees in my agency appropriately assess risk.	63	23	9	6
In general, employees in my agency effectively manage conflicts of interest.	62	22	9	7
My agency has procedures and systems that ensure objectivity in decision-making.	62	22	12	4
My agency provides me with information that clearly outlines the agency’s decision-making processes.	55	25	16	4
My agency encourages the public to participate in shaping and administering policy.	47	27	16	10
Source: Employee Survey

Analysis of the connection between the summary 'Governance factor' and other employee engagement indicators suggests that there is a link between employee perceptions of governance and some aspects of employee engagement. For example, results on the 'Governance' factor were positively related to how satisfied employees were with the overall say they have in decisions that impact on their work and, less strongly, to levels of job satisfaction.

The results on the 'Governance' factor were also positively correlated with results on the other employee engagement factors identified through factor analysis (see Appendix 4). The strongest relationship was with the 'Senior leaders/culture' factor followed by the 'Merit' factor.

These results are consistent with international and Australian research that has linked effective governance with high levels of employee engagement. For example, Vogl linked organisational ethics with high levels of employee performance and the capacity to attract and retain staff .³⁰ The OECD has also suggested a link between the integrity of governance processes and the competitiveness of the public sector as an employer, with potential employees more likely to view the public sector as an employer of choice where it displays governance institutions and mechanisms that promote integrity.³¹ Overall, the results suggest that the ramifications of good governance arrangements may potentially extend beyond their obvious benefits to organisational performance.

F. Vogl 2001, ‘Corporate Integrity and Globalisation: The Dawning of a New Era of Accountability and Transparency’ <http://www.ethics.org/resources/speech_detail.cfm?ID=33>
K. Aijala 2002, ‘Public Sector—An Employer Of Choice: Report On The Competitive Public Employer Project’, <http://www.oecd.org>

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