Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Hansard source

I will take up Senator Moore’s invitation. There has never been from me any suggestion that the rationale for the Australian Broadcasting Corporation Amendment Bill 2006 is about any particular person. I will in fact amplify that later on in my remarks. I hope I can conclude tonight. If I cannot, obviously I will seek leave to continue my remarks when possible.

I thank honourable senators for their contributions to this debate, whatever their perspectives. I acknowledge that there is a great deal of interest in this matter. The bill before the Senate amends the Australian Broadcasting Corporation Act 1983 to abolish the staff-elected director and deputy staff-elected director positions. The position of staff-elected director is an unusual one amongst Australian government agency boards. Indeed, this is a significant part of the underpinning rationale for the government’s actions on this matter. In fact, at the ABC, interestingly, the position did not exist until 1975. It was abolished in 1978, reintroduced in 1983 and given legislative backing in 1985. The board of the other national broadcaster, SBS, interestingly and by contrast, does not include a staff-elected director.

The government is moving to reform the structure of the ABC board because the position of a staff-elected director is not consistent with modern principles of corporate governance and tension has surrounded the position on the ABC board for some years. The tension between the expectations of staff electing the director and the proper duties required of a director, I think, is clear. The potential conflict that exists between the duties of the staff-elected director, under the Commonwealth Authorities and Companies Act 1997, to act in good faith in the best interests of the ABC and the appointment of that director as a representative of the ABC staff, elected by them, does of course throw up some conflict.

The election method creates a risk that a staff-elected director will be expected by those who elect him or her to place the interests of staff ahead of the interests of the ABC where those interests are in conflict. In fact, as I understand it, Senator George Campbell said in this chamber that in his view the staff-elected director was there precisely for the purpose of representing the program-making staff. This matter was recognised—that is, the potential conflict and the undesirable consequences that that can give rise to—in the June 2003 Review of the corporate governance of statutory authorities and office holders, otherwise known as the Uhrig review. The review concluded:

The review does not support representational appointments to governing boards as representational appointments can fail to produce independent and objective views. There is the potential for these appointments to be primarily concerned with the interests of those they represent, rather than the success of the entity they are responsible for governing.

On a practical level, this has led to difficulties—and we do not shy away from the fact that there have been difficulties—in respect of board confidentiality. As has been well referred to in this debate and elsewhere, the current staff-elected director felt unable to agree to a revised board protocol that dealt with, amongst other things, the secure handling of confidential board information. This puts the staff-elected director in a conflicted position if there are expectations that confidential information made available to the director through their position on the board will then be made available to constituents, in potential breach of obligations to the ABC. I would have thought that this would be an untenable position for the board.

Tension surrounding the position on the ABC board has, as I have said, been manifest for many years. In 2004, in a very well-publicised example, this led to the resignation of a director of the highest calibre, experience and value to the ABC board, that being Mr Maurice Newman AC. Another former staff-elected director, Mr Henschke, confirmed during the recent Senate committee hearings that staff-elected directors are at times placed under pressure by staff to act in ways that are not consistent with their duties as directors. The government, then, is of the view that there should be no question about the constituency that ABC directors are accountable to. To resolve this problem, the government has decided to take the step of introducing the bill to abolish the staff-elected director positions.

A number of matters have been raised during the debate in the chamber and also in the hearings of the committee that looked at the bill. Senator Conroy, as I understand it, raised the issue that the findings of the Uhrig review that I referred to earlier in my remarks were not applicable to the ABC. The government does not agree with this assertion. The Uhrig review was given a broad brief and its findings are considered to be relevant across government. The terms of reference of the review were clear. I want to put on record a particular part of the review:

A key task was to develop a broad template of governance principles that, subject to consideration by government, might be extended to all statutory authorities and office holders. ... the review was asked to consider the governance structures of a number of specific statutory authorities and best practice corporate governance structures in both the public and private sectors.

Although the Uhrig review itself focused on particular agencies, its principles are considered generally applicable and all statutory authorities are being considered in relation to those findings. The proposed change in the bill is consistent with the Uhrig review’s conclusions about representative appointments. The position is also endorsed by Professor Stephen Bartos, who is a director of the National Institute for Governance. Professor Bartos said in his submission to the Senate committee that the removal of the staff-elected director ‘is consistent with the current corporate governance approach found in most Australian companies and increasingly in public sector bodies’.

Debate interrupted.