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Thursday, 30 September 2010
Page: 266


Mr ALBANESE (Minister for Infrastructure and Transport) (9:27 AM) —I move:

That this bill be now read a second time.

The National Broadcasting Legislation Amendment Bill 2010 amends the Australian Broadcasting Corporation Act 1983 (ABC Act) and Special Broadcasting Service Act 1991 (SBS Act) to introduce a new merit based appointment process for the ABC and SBS boards and to restore the position of staff elected director on the ABC board.

The intention of these amendments is to achieve better long-term outcomes for both boards and consequently improve governance in our national broadcasters.

This bill fulfils two important and longstanding commitments by the Labor Party. First, we undertook in our national platform in 2007 to end political interference in the ABC by introducing a transparent and democratic board appointment process that appoints non-executive directors on merit, and we undertook to deal with SBS board appointments in the same way as with the ABC. Second, we committed to restore the staff elected director on the ABC board.

Merit based appointment of non-executive directors

ABC and SBS board appointments were previously made by the Governor-General on the recommendation of the government of the day, as per the ABC and SBS Acts. These acts specify general criteria against which candidates are to be assessed but provide no process for appointments and no requirements around transparency in how candidates are selected.

In practice this has raised concerns about ABC and SBS board appointments being politically motivated. Commentators have also perceived that political appointments may have diminished the level of expertise of particular board members on complex technological and financial issues facing the national broadcasters.

Therefore the government has developed a new appointment process whereby an independent panel will conduct a merit-based selection process for non-executive directors to the ABC and SBS boards and advise the government on suitable appointments.

Guidelines were released in October 2008 outlining the new process, with appointments being made in March 2009 and June 2010. The merit-based selection process takes the politics out of the appointment process and focuses on getting the best candidates on boards.

These amendments will formalise this new appointment process in the legislation for both broadcasters and ensure it is used consistently for all future non-executive director vacancies. The legislation also ensures the nomination panel conducts its selection process at arm’s length from the government of the day.

Features of the new process include:

  • Assessment by an independent nomination panel at arm’s length from the government.
  • Vacancies will be widely advertised, at a minimum in the national press and/or in major state and territory newspapers, and on the website of the Department of Broadband, Communications and the Digital Economy.
  • Assessment of candidates will be made against a core set of published selection criteria which may be supplemented by additional criteria where appropriate for specific positions, for example to address particular skill gaps.
  • The nomination panel will provide a report to the minister with a short list of at least three candidates for each vacant position.
  • The minister will select a candidate from the short list and will write to the Governor-General recommending the appointment as required under the acts.
  • In accordance with the government’s election commitment, the appointment of current or former politicians or senior political staff will be prohibited.
  • Where the vacancy is for the chair of the ABC board, the Prime Minister would select the preferred candidate in consultation with the minister. The Prime Minister would confer with cabinet and once cabinet approval was granted, the Prime Minister would consult with the Leader of the Opposition before making a recommendation to the Governor-General.

The legislation provides for the nomination panel to be appointed by the Secretary of the Department of the Prime Minister and Cabinet and sets out processes for its operation. The nomination panel is independent and the legislation states it is not subject to direction by the government.

While the minister (or in the case of the chair of the ABC board, the Prime Minister) may select a candidate who has not been recommended by the nomination panel, they are required to table a statement of reasons in both houses of parliament within 15 sitting days of the announcement of the appointment. This is consistent with the principle of ministerial responsibility whereby the ultimate responsibility for government appointments is with the relevant minister.

The new legislation will provide increased certainty for the boards regarding appointments and tenure. It will strengthen the process and entrench clear rules of appointment and security of tenure for the nomination panel. It will set out how they function and underscore the independence of the panel from government.

Staff-elected director on ABC board

Prior to 2006, the ABC Act provided for the inclusion of a staff-elected director on the board.

The staff-elected director enhances the ABC’s independence by providing the board with a unique and important insight into ABC operations. The staff-elected director is often the only individual with the expertise to examine the advice to the board from the ABC’s executive.

The staff-elected director has the same duties, rights and responsibilities as all other non-executive directors. Like any other ABC director, the staff-elected director’s primary duty is to act in the best interests of the corporation. The only difference between the staff-elected director and other ABC directors is their means of appointment.

There is nothing in the present act or amendment that says the duties of the staff-elected director are different to those of the other non-executive directors on the board.

It is the responsibility of the board to ensure that all directors are aware of their primary duty to act in the interest of the corporation as a whole. This point was made by the Australian National Audit Office in 1999 when it noted in its discussion paper about corporate governance that a written code of conduct, approved by the board, setting out ethical and behavioural expectations for both directors and employees was a ‘better practice’ governance principle for the board of a Commonwealth authority or company.

Conclusion

The measures in this bill deliver on the government’s commitments. They will increase the transparency and democratic accountability of the ABC and SBS boards and help ensure they continue to provide Australians with high-quality broadcasting services, free from political interference.

I commend the bill to the House.

Debate (on motion by Mr Chester) adjourned.