Key Issues Company Secretary
Good governance —
a tool for better
management and
outcomes
By Ruth Shean, Director-General, Department of Training and Workforce
Development, Western Australia
• Practical challenges in
balancing information and
accountability requirements
with operational matters
• Guide developed for public
sector managers based on
ASX Corporate Governance
Council principles and
guidelines
• Practical examples and
tools used across Australia
in organisations to meet
accountability requirements
196 Keeping good companies May 2010
Life as a senior public servant isn’t easy.
The obligations which fall to them include
a wide range of legislative requirements
and cross-government standards and
guidelines. Just working out exactly what
you have to do is a challenge in itself,
even before taking into account the core
business in which your agency is engaged.
In 2007, as WA Commissioner for
Public Sector Standards, my colleagues
and I set out to coordinate the various
legislative and administrative obligations
of CEOs into a single document. We
did this to assist agencies develop codes
of conduct as required by the Public
Sector Management Act 1994 (WA). The
resulting guide is a matrix of must-dos and
might-want-to-dos, and prompts CEOs to
develop the framework of expectations to
best meet their agency needs.
I anticipated that such a document would
be warmly received; after all, it presented
obligations in a logical and coherent
manner. The first reaction, however,
when I briefed new CEOs, was not one
of comfort but one of alarm. Most CEOs
were shocked to see the breadth and
depth of obligation which came with their
leadership responsibilities.
My first piece of advice was always to
identify which officer was responsible for
each obligation. Until such time as every
task and responsibility was delegated, the
CEO was exposed to risk. But even that
exercise was a challenge, for many of the
obligations which fell to CEOs were seen
to be over and above their usual business.
And as CEOs would tell me, they could
spend most of their time on accountability
issues, and never get close to their
business.
The reality is that the role of public officers
has never been more complex. The public
expects increasingly high standards from
government. A Victorian State Services
Authority paper on trust in government1
quoted data from a World Values survey,
showing that trust in virtually all major
organised structural systems declines
over time.2 This is not to suggest that
the systems themselves have become
less trustworthy. Rather, it indicates a
better educated and sophisticated society
where individuals become more critically
evaluative over time — and where
expectations always exceed delivery.
In pursuit of ethical practice
I empathise with the senior public servant
who feels they have to choose between a
focus on accountability and information
one hand and good service delivery on the
other. I have been a CEO of government
line agencies for over eight years. In
positions like these, by far the biggest
challenge is the day-to-day operational
machine which needs constant attention
to keep running. When I was CEO of the
Disability Services Commission, every day
saw us making life-and-death decisions
on behalf of our clients. One difficulty
we faced was the pressure of operational
demand. First, human need is infinite, and
resources are finite. Worthy people with
worthy cases are always going to miss out
on services. Further, those services which
are well funded and well established are
by no means invulnerable.
Disability services were traditionally the
good welfare works of the charity sector.
There have been many reforms since then,
but the elements of disability that made
the sector so strong — the humanity
and the capacity for individual response
— are also by definition the ongoing
vulnerabilities of the sector.
In 20 years as a CEO in the field of human
services, I was confident that the best staff
I employed were those people grounded in
day-to-day practice, and for whom every
individual within their care was treated
as they would a family member. But as
happens in the home, accidents occur and
even in the most careful of households,
mistakes happen. In a single home, these
are usually manageable disasters. On a
system-wide basis, however, they present a
real risk for individuals, their carers and the
agencies that employ them. Physical injury,
medication errors and emotional responses
are relatively commonplace in our own
homes. When translated into a system
catering for hundreds of thousands of
individuals, these human frailties represent
a huge corporate risk.
This is one of the challenges which faces
so may people working to serve the public:
the divide between public expectation —
which espouses higher order principles —
and daily practice.
So, although we had set out the
accountability requirements of government
in our conduct guide, and encouraged
agencies to develop agency specific
requirements which represented good
practice in their own fields, we were still
aware that the risks which stemmed from
shortfall between public expectation and
daily practice remained a challenge for
senior public servants.
It was with this challenge in mind that we
developed the Good Governance Guide,
a risk assessment tool which combines
the across-government accountability
requirements into a single framework.3
The guide is based on the ASX Corporate
Governance Council Corporate Governance
Principles and Recommendations. We used
these principles for a couple of reasons.
First, we felt that these principles had
universal appeal and bore many similarities
to other governance frameworks. Second,
we had heard so much critical comment
that the expectations of government
CEOs exceeded those of their corporate
counterparts, and we wanted to develop an
approach which had a degree of corporate
appeal.
We translated these corporate principles
into principles and functions relevant to
public agencies. We worked through these
with CEOs of public sector agencies to
express them in a way which was unique
and appropriate to public sector practice.
This approach starts with the relationship
between senior public servants and their
Ministers, and includes reference to
legislation, reporting relationships, people
and financial management and specific
ethics and integrity matters.
The governance principles for the Western
Australia Office of Public Sector Standards
Commissioner (OPSSC) Good Governance
Guide are as follows.
• Principle 1: Government and public
sector relationship — The organisation’s
relationship with the government is clear.
• Principle 2: Management and oversight
— The organisation’s management and
oversight is accountable and has clearly
defined responsibilities.
• Principle 3: Organisational structure —
The organisation’s structure serves its
operations.
• Principle 4: Operations — The
organisation plans its operations to
achieve its goals.
• Principle 5: Ethics and integrity — Ethics
and integrity are embedded in the
organisation’s values and operations.
• Principle 6: People — The organisation’s
leadership in people management
contributes to individual and
organisational achievements.
• Principle 7: Finance — The organisation
safeguards financial integrity and
accountability.
• Principle 8: Communication — The
organisation communicates with all
parties in a way that is accessible, open
and responsive.
• Principle 9: Risk management — The
organisation identifies and manages its
risks.
These principles are then cross-referenced
to:
• standards
• operations
• monitoring and
• reporting.
This results in a matrix of nine cells by four
cells — 36 cells in all.
This is the fundamental structure of the
Good Governance Guide, and forms
the basis of a range of processes which
support good governance.
Nine governance principles
For mature organisations, it might be
enough simply to refer to the nine
governance principles to make sure that
the organisation’s accountability framework
captures the key areas. Agencies may
already have a quality assurance model
which has similar principles.
Operational matrix
By populating each of the cells in an
operational matrix, agencies can specify
how the higher order principles cascade
into standards, operations, monitoring and
reporting which are relevant and unique to
that agency. Empty cells can mean that there
is some work to be done. Those areas of
high importance to the agency may become
a special focus. In this way, accountability
isn’t an add-on, but the backbone of
business. It becomes a diagnostic approach
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Key Issues Company Secretary

to business vulnerability and a basis for
annual reporting.
Accountability map
As indicated earlier, we operate under a
multiplicity of accountability requirements
nowadays, and finding your way through
these can be a challenge. So, if you are
lost in regulation, the accountability
map lets you look at the mandatory
requirements from different angles.
To simplify the information and cater for
different user needs, the accountability map
presents this information in different data
sets. For instance, you could choose to look
at the accountability map by principle. So
if you assigned a colleague with the task
of checking the organisation’s compliance
with all mandatory requirements relevant
to ethics and integrity concerns, you could
interrogate the accountability map to this
end.
Practice exemplars
How an agency translates its compliance
obligations into policies and practices
largely depends on the size, risk exposure
and type of business that the organisation
conducts. In order to help organisations
define the approach best fitting their
needs, the Good Governance Guide
provides a collection of practice examples
and tools used across Australia to illustrate
how other organisations have attempted
to meet the same or similar accountability
requirements.
Compliance checklist
The compliance checklist is a tool which
assists in reporting an organisation’s
governance. The checklist can be used
internally to enhance an agency’s
understanding of the governance concepts
applicable to the WA public sector and
the agency. It can also serve as a reference
tool for communicating with external
stakeholders.
The checklist relies on information already
available in the agency’s annual report
or website. It doesn’t add to reporting
activities but streamlines existing
information and helps to present this in a
simple and easy-to-read format accessible
to a wide variety of audiences.
The checklist cross-references the nine
principles with existing policies and
reporting, and allows the agency to
identify shortfalls and duplications.

Table 1: Checklist used in WA public sector agencies

Operational element Applicable policy/ Annual report Comply (Y/N)

other document reference

Principle 1: Government and public sector relationship — The organisation’s relationship with the government is clear
1.1 A document defines responsibilities
and accountabilities between the chief
executive officer and the Minister
1.2 Processes exist to manage
communication and other interaction
between ministers and other
parliamentary representatives and
the organisation
1.3 Communication and other interaction are
recorded and monitored

198 Keeping good companies May 2010

 Operational element Applicable policy/ Annual report Comply (Y/N)
other document reference
Reporting The organisation’s annual report identifies
compliance levels against the relevant
standards

Annual compliance reporting addresses

compliance with WA’s requirements for
good governance

All material matters are reported to the

relevant oversight bodies

Principle 2: Management and oversight — The organisation’s management and oversight is accountable and has clearly
defined responsibilities
2.1 A document defines roles, responsibilities
and accountability for all relevant levels
of management (eg those involved in
setting the organisation’s key strategic
goals and outcomes and monitoring
organisational performance)
2.2 Where boards and committees exist, the
relationship between the parties must be
clearly defined
2.3 A strategic plan outlines the
organisation’s key strategic goals and
outcomes and outputs
2.4 Operational plans and programs of work
exist that define critical success factors
and outline how key strategic goals and
outcomes will be accomplished at all
levels of the organisation
2.5 A delegations framework defines
authority levels
2.6 Performance measures are defined and
monitored for the organisation’s strategic
goals
Reporting The organisation’s annual report identifies
compliance levels against the relevant
standards

Annual compliance reporting addresses

compliance with WA’s requirements for
good governance

All material matters are reported to the

relevant oversight bodies

Principle 3 : Organisational structure — The organisation’s structure serves its operations

3.1 Policies ensure that the organisation’s
structure serves its key strategic goals and
outcomes

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Operational element Applicable policy/ Annual report Comply (Y/N)

other document reference
3.2 Processes exist to manage structural
change and the relationships between
business units
3.3 Performance measures identify how well
the structure delivers against strategic
plans
Reporting The organisation’s annual report identifies
compliance levels against the relevant
standards

Annual compliance reporting addresses

compliance with WA’s requirements for
good governance

All material matters are reported to the

relevant oversight bodies

Principle 4: Operations — The organisation plans its operations to achieve its goals
4.1 Policies enable operations to deliver
against the organisation’s key strategic
goals and outcomes
4.2 The organisation’s operational plans
and programs of work support the
organisation’s key strategic goals and
outcomes and are regularly adjusted to
changes in strategic and environmental
imperatives
4.3 Infrastructure is in place to enable the
organisation to implement its operational
plans
4.4 A proper and adequate record is
maintained of the performance of the
organisation’s operations as aligned with
its key strategic goals and outcomes
4.5 Business process and outcome specific
key performance indicators track the
organisation’s performance against its
strategic and operational plans
4.6 Performance evaluation and audits are
conducted
Reporting The organisation’s annual report identifies
compliance levels against the relevant
standards

Annual compliance reporting addresses

compliance with WA’s requirements for
good governance

All material matters are reported to the

relevant oversight bodies

200 Keeping good companies May 2010

 Operational element Applicable policy/ Annual report Comply (Y/N)
other document reference

Principle 5: Ethics and integrity — Ethics and integrity are embedded in the organisation’s values and operations
5.1 The organisation’s values and code of
conduct reflect the WA Code of Ethics
and define the standards of official
conduct and professional behaviour
expected of all employees
5.2 The organisation’s ethics and integrity
risks are identified and policies and
operational processes address them (eg
procurement, conflict of interest)
5.3 People management frameworks define
the response to non-ethical behaviour
5.4 Processes are in place to provide
supervision and assistance and enable
follow up of non-compliance (eg
through public interest disclosure)
5.5 A structured process is in place to
monitor official conduct and professional
behaviour (eg compliance audit,
performance management)
Reporting The organisation’s annual report identifies
compliance levels against the relevant
standards

Annual compliance reporting addresses

compliance with WA’s requirements for
good governance

All material matters are reported to the

relevant oversight bodies

Principle 6: People — The organisation’s leadership in people management contributes to individual and organisational
achievements
6.1 Policies enable the attraction, retention
and management of people
6.2 Plans ensure that processes, decisions
and actions are based on the principles
of fairness, equity and diversity, and are
consistent, transparent, impartial and
open for review
6.3 People management frameworks cover
the whole employment continuum
6.4 Structured procedures are in place to
monitor adherence to human resource
policies and processes
6.5 Feedback processes identify issues in
people management practices

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Operational element Applicable policy/ Annual report Comply (Y/N)

other document reference
Reporting The organisation’s annual report identifies
compliance levels against the relevant
standards

Annual compliance reporting addresses

compliance with WA’s requirements for
good governance

All material matters are reported to the

relevant oversight bodies

Principle 7: Finance — The organisation safeguards financial integrity and accountability

7.1 Finance policies define the key strategic
goals and outcomes for which the
organisation’s finances must be employed
7.2 A formal audit charter specifies roles
and responsibilities, composition and
structure of all audit functions
7.3 Processes ensure the proper recording
of financial transactions consistent with
applicable accounting standards
7.4 Financial operations contribute towards
the organisation’s key strategic goals and
outcomes and uphold the highest level of
integrity
7.5 Structured processes are in place to
monitor and audit financial performance
against budget and key strategic goals,
both at executive level as well as by an
independent audit committee
Reporting The organisation’s annual report identifies
compliance levels against the relevant
standards

Annual compliance reporting addresses

compliance with WA’s requirements for
good governance

All material matters are reported to the

relevant oversight bodies

Principle 8: Communication — The organisation communicates with all parties in a way that is accessible,
open and responsive
8.1 Communication policies ensure the
organisation’s communication is open,
accessible and responsive
8.2 Policies ensure information is
disseminated through correct channels,
in a timely manner and to the right target
group

202 Keeping good companies May 2010

 Operational element Applicable policy/ Annual report Comply (Y/N)
other document reference
8.3 Processes ensure proactive, transparent
and responsive internal and external
communication
8.4 Processes assist in complying with
legislation on record keeping, public
interest disclosure and freedom
of information, in safeguarding
the confidentiality and integrity
of information, and in preventing
unauthorised, false or premature
disclosure
8.5 An audit strategy exists to monitor
compliance with communication policies
and strategies
Reporting The organisation’s annual report identifies
compliance levels against the relevant
standards

Annual compliance reporting addresses

compliance with WA’s requirements for
good governance

All material matters are reported to the

relevant oversight bodies

Principle 9: Risk management — The organisation identifies and manages its risks
9.1 Policies exist for the governance and
management of material risks (eg
reputational, financial or physical,
including occupational safety and health)
9.2 The organisation’s risk exposure is
evaluated and remediation plans are
implemented
9.3 Preventive measures for key risk
categories are in place
9.4 Procedures are in place to monitor
incidents from the identified risk
categories (data analysis)
Reporting The organisation’s annual report identifies
compliance levels against the relevant
standards

Annual compliance reporting addresses

compliance with WA’s requirements for
good governance

All material matters are reported to the

relevant oversight bodies

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Key Issues Company Secretary
Maturity model
The maturity model is an interactive tool
designed to assist public sector bodies
• identify their governance risk profile
• assess the state of their current
governance framework and
• plan any future improvements if
necessary.
The maturity model further allows public
sector bodies to:
• compare their performance over time as
well as
• compare their performance (on a
de-identified basis) with that of other
agencies.
At the moment, access to the maturity
model is restricted to public sector bodies
and their registered users. To obtain
access to the system for a public sector
organisation, send a formal request to
ggg@opssc.wa.gov.au nominating your
organisation’s authorised key contact for
the purpose of using the model.
Next steps
This work on governance represents the
collaborative efforts of our own team
who worked at OPSSC. I would like to
acknowledge in particular the leadership
of Gretta Fenner and Penny Bird, and
the input of many CEOs and senior staff
from with the Western Australian State
Government. I am now in the fortunate
position of being able to apply our own
tool. As the inaugural Director-General of
the newly formed Department of Training
and Workforce Development, I have
found two immediate applications for this
approach.
First, an immediate task in establishing
this new department as we demerge from
the previous Department of Education
and Training has been to set up an
accountability framework under which the
Department will operate. The framework
has provided an excellent starting point
for the accountable operation of the
Department. The operational matrix
has guided my thinking during the
establishment of the structure, and
204 Keeping good companies May 2010
The compliance checklist
is a tool which assists in
reporting an organisation’s
governance. The checklist can
be used internally to enhance
an agency’s understanding
of the governance concepts
applicable to the WA public
sector and the agency. It can
also serve as a reference tool for
communicating with external
stakeholders.
The checklist relies on
information already available
in the agency’s annual report
or website. It doesn’t add
to reporting activities but
streamlines existing information
and helps to present this in a
simple and easy-to-read format
accessible to a wide variety of
audiences.
enforced a discipline on every stage of
our work. Times such as these are usually
marked by the hurly-burly of uncertainty
and new expectation. The operational
matrix has given me a framework for
systematic pursuit of sound structure and
management. Importantly, it is now being
devolved to the responsibility of others
within the department: our accountability
will be a shared responsibility.
Second, and perhaps more important,
is the facility which the framework will
enable us to fulfil one of our largest
responsibilities: the oversight of the
Western Australian technical and further
education (TAFE) sector. Under the
Vocational Education and Training Act
1996 (WA), public colleges are established
as bodies corporate with a governing
council. Our department holds a central
agency responsibility with respect to the
colleges. We execute this responsibility
through service level agreements, and
oversee college performance against a
range of key performance indicators.
Clearly, a detail of reporting has evolved
in this relationship, much of which is seen
by both the colleges and the Minister as
being overly burdensome. TAFE college
managing directors report to four different
entities: to their governing councils,
the Department, the Minister and to
Parliament. We are keen to streamline
their reporting while minimising risk to the
government. The Good Governance Guide
has given us an excellent framework for
this task.
The Good Governance Guide was borne
out of a desire to simplify the maze of
responsibility and regulation which besets
government agencies. I am pleased to
report that it has delivered splendidly on
this goal.4
I do remind my colleagues that, as with
all tools, it is just a tool. It must be used
judiciously. And remember, that while it
is useful, in no way does it replace the
essential elements of good management
– walking around, listening, planning, and
using sound commonsense.
Ruth Shean can be contacted on
(08) 9238 2402 or by email at
Ruth.Shean@dtwd.wa.gov.au
Notes
1 State Services Authority, 2007,
A Matter of Trust — Trust in Government.
See www.ssa.vic.gov.au [8 April 2010]
2 See www.worldvaluessurvey/org/services/
main/htm [8 April 2010]
3 Chartered Secretaries Australia has also
developed a number of Good Governance
Guides for use in the public sector
environment. See www.CSAust.com/
GGG/PublicSector
4 The Good Governance Guide is currently
hosted by www.opssc.wa.gov.au. Agencies
interested in contributing to this collective
approach to governance can contact us
through the Department of Training and
Workforce Development in Perth