We show you how to write a strong public sector good governance
framework using the Lighthouse Model.
With the release of Dr Kerry Schott's Interim Report on NSW
Public Sector Management in late January 2012 and the creation of
the NSW Public Service Commission in November 2011, good governance
reform is an immediate public sector priority in NSW. Getting the
basics right through writing strong good governance frameworks is
now essential. Here, we show you how.
What is a public sector good governance framework?
A good governance framework is a conceptual structure and set of
rules that outlines how an organisation is managed and controlled.
Good governance frameworks should be developed for all new
government bodies and programs, including departments, state owned
corporations, and other non-departmental government agencies both
at a general level and for each major project being managed by the
agency. This will maximise the potential for government bodies to
perform at an efficient level, achieve their objectives and enhance
public confidence in their decisions, while still conforming to
their obligations and responsibilities. It should also result in
decisions being made at the appropriate level within the
Public sector good governance frameworks are built upon six
underlying principles: accountability, transparency and openness,
integrity, stewardship, efficiency, and leadership.
How to write an effective framework – what is the
Pen poised – where do you start? The NSW
Auditor-General has created a 'lighthouse model' of good
governance, based on the ASX Corporate Governance Principles and
Recommendations, and adapted to the public sector. This model
reinforces how good governance can shine a light on what agencies
and government are doing. Using the 17 key components of the
Lighthouse Model is an ideal way of developing an effective public
sector good governance framework.
NSW Government agencies surveyed by the NSW Auditor-General in
2009 and 2011 performed well against several targets: creating
strategic and business plans; board structure; financial reporting;
and timely annual reports. However, many were graded poorly in
connection with continuous disclosure, risk management processes,
stakeholder communication and fraud control.
In building effective good governance frameworks, Australian
public sector organisations start from an excellent platform. The
OECD has identified Australia as having "a strong culture of
professional commitment among staff in the public administration, a
highly skilled and professional public administration with
experience of working with regulatory reform in government and a
strong and well embedded institutional framework."
However, the changing shape of government services necessitates
old and new agencies to remain vigilant to emerging challenges.
Auditor-General for Australia Ian McPhee advises that the most
successful projects are delivered by "switched on teams
following sounds governance practices" and warns that demand
for more integrated government services will continue, must drive
agencies to "contribute across the full spectrum of delivery
mechanisms", and employ adaptable governance arrangements that
extend beyond form to substance.
For this reason, our drafting tips seek to establish active
procedural steps rather than merely espouse the virtues of esoteric
notions of transparency and accountability. Agencies should strive
an approach that focuses on strategic imperatives of an
organisation rather than merely the formal requirements;
governance frameworks that are easily accessible and credible
to staff, and driven from the top, so that each staff member is
well supported and guided in their daily tasks and decisions by a
comprehensive set of ideal behaviours and values;
an alertness to cost-shifting in other jurisdictions where
federal programmes complement state or local government programmes;
regular reporting and monitoring, complemented by revaluation
of performance expectations and adjustments where necessary.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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