PM Transcripts

Tonight I am announcing details of a review into the corporate governance of Commonwealth statutory authorities and office holders. The review will be undertaken by Mr John Uhrig AC and fulfils an important election commitment.
The performance of statutory authorities and office holders is critical for business and the overall health of the Australian economy. This is particularly the case in the areas of taxation and regulation, where businesses have the right to expect the highest levels of efficiency, fairness and transparency in their dealings with Government.
The objective of the proposed governance review is to improve the performance of statutory authorities and office holders and their accountability frameworks. The review will examine structures for good governance, as well as the relationship between statutory authorities and office holders and portfolio ministers, the Parliament and the public, including business.
A specific focus of the review will be on a select group of agencies with critical business relationships, including the Australian Taxation Office, the Australian Competition and Consumer Commission, the Australian Prudential Regulation Authority, the Reserve Bank of Australia, the Australian Securities and Investments Commission, the Health Insurance Commission and Centrelink.
In addition to analysing existing governance arrangements, the review will also address the selection process for board members and office holders, the mix of experience and skills required by boards, their development requirements and their relationship to Government.
The Government is fortunate to have secured the services of Mr Uhrig, a distinguished business leader and former Chairman of Rio Tinto and Westpac, to conduct the review. It is expected that Mr Uhrig will report directly to me after a six month review process and will be supported by a secretariat provided through the Department of Finance and Administration. Consultation with ministers, private sector stakeholders and statutory office holders will be an important part of the review.
An expected outcome of the review is the development of a broad template of governance principles. As a second stage to the process, and following the review, the Government will assess statutory authorities and office holders against these principles. Reforms will be undertaken on a whole-of-government basis.
The terms of reference for the review are attached.
14 November 2002REVIEW OF CORPORATE GOVERNANCE OF STATUTORY AUTHORITIES AND OFFICE HOLDERS
TERMS OF REFERENCE
The review is to examine and report on improving the structures and the governance practices of Commonwealth statutory authorities and office holders, with particular attention being paid to those that impact on the business community.
The objective of the review is to identify issues surrounding existing governance arrangements and to provide policy options for Government to improve the performance and get the best from statutory authorities and office holders, and their accountability frameworks.
 An expected outcome of the review is the development of a broad template of governance principles and arrangements that the Government may wish to extend to statutory authorities and office holders, and potentially beyond, to a wider range of public sector bodies.
 The template should be developed taking into account the improvements achieved over the last six years in the public sector based on legislation and arrangements already in place.
In undertaking the review, consideration will need to be given to the unique status of the Commonwealth as owner or shareholder, as the sovereign government and the source of regulatory authority.
The review should address the following issues:
Existing Governance Frameworks
 Analysis of existing governance arrangements for statutory authorities and office holders.
- The analysis is expected to include how statutory authorities and office holders relate to outsiders (including clients and customers) and how internal authority is shared, exercised and appropriately limited.
Existing Government Stewardship
 Selection processes for board members and office holders, the mix of experience and skills required by boards, their development requirements and their relationship to Government and agency management.
 The relationship between statutory authorities and office holders and portfolio Ministers and Departments, the Parliament and the public, including business.
Good Governance
 Determination of best practice corporate governance structures, including formal accountability and risk management requirements, existing within the private sector and public sector.
 Opportunities to improve the governance arrangements for statutory authorities and office holders, particularly those that have critical business relationships such as: the Australian Taxation Office, Australian Competition and Consumer Commission, Australian Prudential Regulation Authority, Reserve Bank of Australia, Australian Securities and Investments Commission, Health Insurance Commission and Centrelink.
- Consideration will need to be given to whether existing relationship structures between statutory authorities and office holders and portfolio Ministers and departments, the Parliament and the public, including business, can be improved to achieve better outcomes.
 Initiatives that may be undertaken to improve the performance and bottom line results of statutory authorities and office holders, including accountability and reporting mechanisms.
 Initiatives that may be applied by the Government to drive, where appropriate, the behaviour of statutory authorities and office holders towards better performance.
Governance Going Forward
 Development of a template of governance principles and policy options that the Government may wish to extend to statutory authorities and office holders.
 Development of principles to assist with determining administrative structures and selection processes that would be likely to be the most effective in implementing particular government policies and programmes.
An important component of the review will be consultations with Ministers, the private sector and key agency CEOs and statutory office holders.
A report to the Prime Minister and the Minister for Finance and Administration should be produced within six months from commencement.