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Wednesday, 24 May 2006
Page: 98


Mr LLOYD (Minister for Local Government, Territories and Roads) (4:32 PM) —I move:

That the bill be now read a second time.

The Australian Broadcasting Corporation Amendment Bill 2006 amends the Australian Broadcasting Corporation Act 1983, the ABC Act, to abolish the staff elected director and deputy staff elected director positions.

The position of a staff elected director is uncommon amongst Australian government agency boards. The position at the ABC was introduced in 1975. It was abolished in 1978, reintroduced in 1983 and given legislative backing in 1985.

The position of a staff elected director is not consistent with modern principles of corporate governance and a tension relating to the position on the ABC board has existed for many years.

This tension is manifested in 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 ABC staff and elected by them. The election method creates a risk that a staff elected director will be expected by the constituents who elect him or her to place the interests of staff ahead of the interests of the ABC where they are in conflict.

This matter was recognised in the June 2003 Review of the Corporate Governance of Statutory Authorities and Office Holders, otherwise known as the Uhrig review, at pages 98 and 99. That 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.

It has been suggested by some that the Uhrig review was not applicable to the ABC. This is incorrect. The Uhrig review was given a broad brief and its findings are relevant across government. The terms of reference of the review included ‘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 of corporate governance structures in both the public and private sectors. The Uhrig review principles are considered generally applicable and all statutory authorities are being considered in relation to them.

There is a clear legal requirement on the staff elected director that means he or she has the same rights and duties as the other directors, which includes acting in the interests of the ABC as a whole. The government is of the view that there should be no question about the constituency to which ABC directors are accountable.

Evidence presented by a former staff elected director to the recent Senate Environment, Communications, Information Technology and the Arts Legislation Committee hearings on this bill confirmed that staff elected directors are, at times, placed under pressure by staff to act in ways which are not consistent with their roles as directors.

The bill resolves these tensions by abolishing the staff elected director positions. This change will contribute to the efficient functioning of the ABC board, is in line with modern corporate governance principles and will provide greater consistency in governance arrangements for Australian government agencies.

The bill is intended to give effect to the abolition of the staff elected director positions as close as possible to the expiry of the term of the current staff elected director.

Despite the abolition of the staff elected director position on the ABC board, the government expects the ABC board and management to continue to take the interests of staff into account in its deliberations.

I commend the bill to the House, and I present the explanatory memorandum to the bill.