Organisational governance

Achieving excellence in governance was one of the critical challenges identified in the State of the Service Report 2005–06. Effective governance processes are essential to the operation of the APS, as they provide the framework within which agencies can achieve their business goals. They can also affect public confidence in the capability and integrity of the APS, the ability of agencies to attract high-quality staff, and overall levels of employee satisfaction.

ANAO defines governance as:

…the set of responsibilities and practices, policies and procedures, exercised by an agency’s executive, to provide strategic direction, ensure objectives are achieved, manage risks and use resources responsibly and with accountability.¹

Good governance comprises both performance and conformance. Performance relates to the requirement for an agency to use its governance arrangements to contribute to its overall performance and delivery of goods, services or programmes. Conformance relates to the requirement for an agency to use its governance arrangements to ensure it meets the requirements of the law, regulations, published standards and community expectations of probity, accountability and openness.² Governance can cover a very broad range of issues, including an agency’s approaches to decision-making, financial management, regulation and information management.

There has been a growing focus on governance in both the public and private sectors in recent years. In the APS, this focus has reflected the findings of a number of ANAO performance audits, the implementation of the Government’s response to the Uhrig Review of the Corporate Governance of Statutory Authorities and Office Holders, and the findings of the Palmer and Comrie reviews of immigration cases.³ There has also been a strong focus within the APS on reviewing and reducing internal red tape and regulatory burdens on business and the community.

Developments in Australia have reflected a renewed emphasis on good governance in the public sector internationally. In Canada, for example, in August 2006 the Federal Government announced further reforms to strengthen accountability requirements for government agencies in the wake of the AdScam election advertising scandal. The international focus on regulatory reform has also increased. The UK released an action plan identifying ways to reduce red tape in December 2006 and the European Commission has set a target to reduce the administrative burden by 25% across 13 policy areas by 2012.

Last year’s State of the Service report noted that the Commission, in consultation with Finance, was undertaking work to identify good practice governance principles for the APS. This work has resulted in the preparation of a publication titled Building Better Governance.⁴ The publication has identified a number of basic building blocks that can be considered when establishing or reviewing governance arrangements.

This chapter examines a number of key governance developments affecting the APS in 2006–07. It then focuses on assessing APS performance against the basic building blocks of governance identified in Building Better Governance. Issues relevant to governance in the APS are also discussed in a number of other chapters of the State of the Service report, in particular, Chapters 10 and 11.

1 ANAO and PM&C 2006, Implementation of Programme and Policy Initiatives: Making Implementation Matter, Better Practice Guide, Commonwealth of Australia, Canberra, p. 13, <http://www.anao.gov.au>

2 ANAO 2003, Public Sector Governance Vol. 1, Better Practice Guide, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>

3 Commonwealth Ombudsman, Inquiry into the Circumstances of the Vivian Alvarez Matter, (Report by the Commonwealth Ombudsman of an inquiry undertaken by Mr Neil Comrie), September 2005, <http://www.ombudsman.gov.au> and M. J. Palmer, Inquiry into the Circumstances of the Immigration Detention of Cornelia Rau: Report, July 2005, <http://www.minister.immi.gov.au>

4 Australian Public Service Commission 2007, Building Better Governance, Commonwealth of Australia, Canberra, <http://www.apsc.gov.au>