There
is a law in each well-order'd nation
To curb those raging appetites that are
Most disobedient and refractory.
Troilus
and Cressida Act 2, scene 2
This post is assesses the recent Ministerial appointments
in the Indigenous affairs portfolio, and makes a series of reform
recommendations.
Appointments to Board positions in the Indigenous
Australians portfolio generally fly under the radar. Yet, they involve the management
and oversight of billions of dollars in Indigenous-directed assets, and bestow
considerable power and influence, not least the power to appoint Individuals to
the Boards of myriad subsidiaries of statutory corporations, which themselves
control substantial financial resources. These appointments, and the actions of
Boards, receive far less media attention than Ministers and senior bureaucrats.
Accordingly, the appointments of Directors to government owned corporations, and
the actions of those corporations, deserve far more attention than they
normally receive both by the media and (dare I say) academia.
Perhaps the most consequential recent appointment was that
of Ms Jodi Broun as CEO of the NIAA. She has a term of five years, which took
effect on 14 February. The Minister’s 12 January 2022 media release provides
some biographical background (link
here). Broun is an experienced public servant and I expect her to make a
positive and well informed contribution to the administration of NIAA and the
Indigenous Australians portfolio.
In relation to the Indigenous Land and Sea Corporation (ILSC),
the Minister has made a number of new appointments (link
here, link
here). Following the expiry of the term of the former Chair, Mr Eddie Fry,
Mr Ian Hamm has been appointed. A Yorta Yorta man and experienced public
servant, Mr Hamm’s three year term began on 1 December 2021. Also appointed
were Ms Gail Reynolds-Adamson, Ms Kate Healy and Mr Nigel Browne. On 15
February, the Minister announced that Ms Kristy Masella would join the ILSC
board for a three year term beginning 16 March 2022. On 7 April 2022, the
Minister announced the reappointment of Mr Roy Ah-See, but did not mention the
term.
In relation to Indigenous Business Australia (IBA), the Minister
announced on 21 December 2021 the appointment of Mr Richard Callaghan from
South Australia, and the reappointment of three Directors, Mr Eddie Fry
(chair), Mr Rick Allert, and Ms Shirley Macpherson. The Ministers media release
made no mention of the terms of appointment (link
here).
Shortly after the Minister’s December announcement, on 21
December 2021, I published a post regarding these reappointments (link
here) based on the absence of any information regarding the terms of the
reappointments. Information in the Government Business Directory at the time indicated
that the reappointments would expire in February 2022. In that post I focussed
on a number of unanswered questions regarding serious governance issues within
the ILSC Board and the Minister’s own acknowledgement of his loss of confidence
in Mr Fry as Chair. It now transpires that the Government Directory entry for
the IBA Board has been updated to show that the terms of appointment for the
reappointed IBA Directors are not three months, but three years, ending on 17
December 2024 (link
here). With regard to that eventuality, my previous post made this comment:
A more worrying possibility is
that the Ministers recent announcement applies to the post February terms of
the three Directors. If so, this would lock in a serious failure of good
governance principles.
For the full context of this comment, I recommend readers
consult my earlier post (link
here) and the links included there.
More recently, the Minister announced the appointment of Mr
Joshua Gilbert to the IBA Board (link
here). While the media release makes no mention of the term, the Government
Directory indicates it is a three year term.
The Minister has also made a number of other recent statutory
appointments. Ms Vonda Malone has been appointed as CEO of the Torres Strait
Regional Authority (link
here), Ms Tricia Stroud has been appointed as Registrar of Indigenous Corporations
(link
here), perhaps the key regulatory appointment in the Indigenous Australians
portfolio. The Minister also announced the appointment of Mrs Suzanne Hullick
and Mr Justin Ryan to the Interim Board of the Northern Territory Aboriginal
Investment Corporation on 6 April 2022 (link
here). For a discussion of some of the risks facing this new corporations,
see my earlier November 2021 post (link
here).
Other recent non-statutory appointments made include Ms Fiona
Cornforth and Ms Catherine Liddle as co-chairs of the Indigenous Expert Group
guiding the implementation of Supporting Healing for Families (link
here) and the reappointment of Mr Daniel Bourchier to the Board of Outback
Stores (link
here). The Government also announced
the appointments of Ms Gina Castelaine and Ms Cara Peek, two new members of the
revamped Indigenous Reference Group on Northern Australia, on 24 December 2021
(link
here). This body has recently been renewed by Minister Littleproud after it
was effectively sidelined by Minister Pitt. To date, there has been no critical
assessment of the success or otherwise of the IRG in advancing the interests of
Indigenous Australians within the Government’s Northern Australia policies. The
processes for the appointment of members of the IRG are particularly opaque, it
not even being clear which Minister makes the appointments, and which portfolio
is responsible for taking any policy recommendations forward.
Discussion
Given the number of Ministerial appointments, the significance
of the bodies they are charged with managing, and the powers bestowed on Boards
to appoint Directors to subsidiaries of Commonwealth corporations, the
information provided by governments should be much more extensive and accessible
than it is.
There is no requirement for a Minister to announce appointments,
and as is apparent from a close reading of Minister Wyatt’s announcements,
there is no requirement for the Minister to identify the term of the
appointments, nor the basis of appointments (merit based selection process or
ministerial selection). Nor is there any requirement for the Minister (or
appointees) to publicly identify potential conflicts of interest nor to explain
how they are to be managed. The quality of transparency in relation to the management
of portfolio bodies is underwhelming, and contributes to the creation of an
environment where the public interest can be set aside in favour of political agendas
and machinations.
Issues that I would point to as potential or actual issues
of concern in the Indigenous Australians portfolio include:
·
attempts to co-opt Boards to ensure that they
will give favourable consideration to Ministers’ views and wishes;
·
attempts to stymie future governments’ capacity
to bring new expertise or skills onto Boards; or to build in a level of
internal conflict beyond a Ministers term of office to ensure a continuity of
policy;
·
the use of appointments as rewards; and
·
making appointments that assist in moderating
the capacity of key intermediary organisations to exercise truly independent
judgment on issues that may come before the intermediary in the future.
I have necessarily articulated these issues at an abstract
level, and note that they often involve what might be termed preparatory moves
by a minister akin to a general positioning troops on high ground in advance of
a possible battle. In other words, they involve strategic political management and
do not necessarily involve inappropriate action. Nonetheless, to the extent
that they occur, they are highly likely to be inconsistent with the public
interest.
A particular issue of more serious concern is the
reappointment of Mr Fry to the IBA without any explanation from the Minister in
regard to his previous loss of confidence in him at the ILSC, and without any
formal response being published to the recommendations of the Thom report. This
report commissioned by the Minister only came to light as a result of an FOI
request. The previous ILSC Board had also lost confidence in Mr Fry (expressing
a formal lack of confidence in his leadership on a number of occasions). Adding
to the aberrant sense of distorted reality around the Minister’s decisions
regarding the ILSC and Mr Fry was the Minister’s decision to reappoint Mr Ah
See, — one of those ILSC Board members who had expressed deep concern with Mr
Fry’s governance approach — to the ILSC Board. Mr Ah-See is widely respected in
Government circles and was a former co-chair of the Prime Minister’s Advisory
Council under the current Government (link
here). Rather than setting a benchmark for standards of governance in the
portfolio, the Minister seems to be having a bet each way. The real issue here
is this: is the Minister focussing on the wider public interest, or has he
cobbled together a shabby compromise due to pressure from deeper political
forces in play protecting Mr Fry? My money is on the latter.
Other issues raised by these appointments include the
overlap between government activities in general and the appointments of some
individuals. For example, Mr Bourchier is an ABC journalist, and Ms Kate Healy
is a partner in PwC’s Indigenous consulting arm. Both of these organisations
can be expected to have dealings of one sort or another with the Minister and
his portfolio. While both individuals appear eminently qualified for their
appointed roles and it seems unlikely that either individual would place
themselves in a position of actual or potential conflict of interest, there is
a risk that the Government is attempting to exercise a more nuanced form of
influence directed to subtly encouraging a pro-government attitude in matters
of a general nature within both the ABC and PwC Indigenous Consulting.
At a more systemic level, the lack of diversity in appointments
suggests the risk of governance failures is built into the present selection
processes. The current Government appears
to have made many appointment decisions that suggest a process of churn has
been underway from within a small group of appointees, By 2025, Mr Fry and Mr
Allert will each have had in excess of ten years as remunerated appointees on
the IBA, ILSC, and various Commonwealth subsidiaries such as Voyages Pty Ltd. Ms
Reynolds-Adamson was previously a Director of IBA for eight years from 2006 to
2014. Mr Joseph Elu who (understandably in my view) resigned from the ILSC in
the middle of its governance issues (clear evidence of the cost of the
dysfunction) had previously been Chair of the IBA for 11 years. Mr Ah-See had
been a Director on the IBA before being appointed to the ILSC. Ms Shirley
Macpherson was previously a longstanding Chair of the Aboriginal Development
Commission (forerunner of IBA), a longstanding Chair of the ILC (forerunner of
the ILSC), and is now a member of the IBA Board. By 2025, she will likely have
accumulated around thirty years on key Boards in the Indigenous portfolio.
Taken together, this accumulation of repeated appointments suggests an
extremely serious level of insularity and resistance to bringing in fresh
talent. It is no wonder that the ILSC experienced the internal crisis of
governance discussed above.
To be clear, I am not suggesting that the individuals
appointed are necessarily unqualified, nor that this is an issue limited to the
present Government. Lax selection processes have an inbuilt tendency to
encourage Ministers to re-appoint from within a small select group of potential
appointees. I am suggesting, however, that this is a real issue, and that it is
unacknowledged and under-recognised. To the extent that poor governance is the
result, Indigenous Australians are the losers.
So
what are the solutions?
Listed below are some high level ideas that would in my
view improve the systemic quality of corporate governance within the portfolio bodies
across the Indigenous Australians portfolio. While I am under no illusions that
governments of any stripe will be attracted to reforms of this kind, I do consider
that these are issues that the Coalition of Peaks, and the yet to be
established Indigenous Voice might take up and prosecute.
First, there is a need for the establishment of a legislated multi-partisan/independent
selection committees that proposes a merit based short list to the minister for
each vacancy on the Board of a portfolio body. The process used for the ABC (link here), and largely ignored by recent Prime Ministers, is
one potential model.
Second, I would go further and propose that any legislation should
provide that where Ministers ignore an independent selection committee
shortlist in making an appointment, the nominee should be required to stand
down with a change of government.
Third, there should be a legislated requirement in the First
Nations portfolio for the NIAA to maintain a current, comprehensive and
publicly available register in one location on its web site of all Ministerial
appointments and re-appointments to portfolio bodies over the previous twenty
years. Further, when Directors are listed, a footnote should list all prior
appointments within the portfolio (and in related portfolios e.g. Indigenous
health). A separate register of short Director biographies should be linked to
the main register.
Fourth, there is an urgent need for much greater transparency over the
appointments of Directors to subsidiaries of Commonwealth statutory
corporations, their terms and remuneration, and any identified potential
conflicts of interest. Indeed, these appointees should be included within the
register recommended above. Further, there is a need for much greater financial
transparency over these entities. To mention just one example, they are Commonwealth
owned bodies, yet access to their accounts is only available from ASIC upon the
payment of a fee. Indigenous Australians in particular deserve to have full access
to this information without a fee. This could be achieved by a requirement that
all documents with ASIC should also be made available on the relevant websites.
Fifth, an independent body
such as the Law Reform Commission should be tasked to undertake a short and
sharp inquiry with public submissions to draw out any other reforms that might
be required to appointments processes for portfolio bodies in the Indigenous
Australians portfolio.
Finally, I would note that one
of the reasons for improving the quality of governance in key portfolio bodies
such as the ILSC and IBA in particular is that it is clear to me that their
shelf life as statutory corporations within the Australian government system is
within one or two decades of coming to an end. In a chapter in a recent book on
Self Determination (link here),
I argued the case for transitioning these bodies into a form of First Nations ownership
and control. Amongst the key preconditions for such a process is to ensure that
they have been governed effectively in the periods leading up to such a
transition, and that their Boards are truly governing these corporations in the
interests of First Nations rather than facilitating the political machinations
of Governments. Any such transition will be complex and will require careful
planning from within the existing corporations. In turn, this will require
Boards that are prepared to think long term, and undertake the hard work of persuading
governments of the potential benefits of giving up control of these key
institutions.
Unfortunately, I have very little
confidence that Australian governments, present and future, or the current
Boards in the Indigenous Australians portfolio would bring the level of vision
required to even start this process, let alone bring it to a constructive
conclusion. This is why Board selection processes are strategically important
for First Nations interests, and why the Coalition of Peaks and the future
Voice should work together to persuade the Australian Government to change
these processes for the better.