Posted 23/11/2016 by Philip Hamilton
Following the recommendations of a review conducted in 2015, the Australian Organ and Tissue Donation and Transplantation Authority Amendment (New Governance Arrangements) Bill 2016 (the Bill) proposes that the current Australian Organ and Tissue Donation and Transplantation Authority (OTA) Advisory Council be replaced by a governing Board that also assumes many of the responsibilities currently assigned to the OTA’s Chief Executive Officer (CEO). The Board would replace the CEO as the ‘accountable authority’ for the purposes of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). This appears to be the first time a governing board, rather than an individual, has been the accountable authority for a non-corporate Commonwealth Entity under the PGPA Act. In addition, the COAG Health Council would acquire a role in the process for appointing Board members. However, the new governance arrangements do not change the OTA’s functions. The Bill’s proposed commencement date is 1 July 2017.
Reform of organ and tissue donation and transplantation
As outlined in a Bills Digest and a Research Paper published by the Parliamentary Library in 2008, the Rudd Government introduced a suite of measures to institute a nationally consistent and coordinated system of organ and tissue donation for transplantation. A key source of advice was the National Clinical Taskforce on Organ and Tissue Donation initiated by the Howard Government in 2006.
Reporting in early 2008, the Taskforce recommended the establishment of the OTA with a governing board that was representative of clinicians, consumers, state-based organ donation agencies, and ‘individuals with experience in business and public life’.
Establishment of the OTA
Rather than following the Taskforce’s proposal for a governing board, the Australian Organ and Tissue Donation and Transplantation Authority Act 2008 (the Act) provided for the OTA’s CEO to have the pre-eminent role in functions such as developing policy, declaring standards, and making grants on behalf of the Commonwealth. The CEO is appointed by the responsible Commonwealth Minister alone. The CEO is advised by an Advisory Council, whose 10 to 16 members are appointed by the Commonwealth Minister after consultation with relevant state and territory ministers. In addition, the CEO can establish and make appointments to expert advisory committees.
Review in 2015
In May 2015, the then Assistant Health Minister Fiona Nash observed that, despite significant expenditure and some improvement since 2008, ‘organ transplant rates have not increased as quickly as intended’. The Minister commissioned Ernst and Young (EY) to review the implementation of the national reform agenda for organ and tissue donation, including the OTA.
Released in February 2016, the EY report found that ‘current governance arrangements are advisory in nature and do not provide any strategic oversight, performance monitoring, succession planning or mentoring of the CEO. The Review found that stakeholders were generally in support of the establishment of a Board of governance for the OTA’. EY advised that ‘States and Territories will need to be involved in the selection of Board members with the Board being skills-based, not representational.’
Proposed governance arrangements
The Bill generally reflects EY’s governance recommendations. A Board of eight members is proposed (seven appointees, and the CEO ex officio).
The Bill requires that the Chair of the Board must have substantial experience in or knowledge of public administration, business and/or management. EY’s recommendation that the Chair should be ‘an experienced leader of public hospital organisations, but need not be a clinician’ has not been included in the Bill, but has been adapted for the skill sets required of other Board members (see below). The Bill does not require the Commonwealth Minister to consult state and territory ministers on the appointment of the Chair. The Bill proposes that the Minister must consult the Chair about the proposed appointment of a CEO.
Broadly consistent with EY’s recommendations on eligibility, the Bill proposes that appointees to other positions on the Board must:
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have substantial experience in or knowledge of at least one of the following fields: public hospital administration; consumer health issues; promotion of health issues; community leadership or representation in relation to organ or tissue donation and transplantation matters; any other appropriate field of expertise
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have substantial clinical expertise in organ or tissue donation or transplantation or
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be a consumer of health services.
The appointment processes proposed in the Bill are consistent with EY’s recommendations:
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before appointing a Deputy Chair, the Commonwealth Minister must request and consider a written notice from each state and territory health minister nominating a person for appointment and
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before appointing other Board members, the Commonwealth Minister must request and consider a written notice from the COAG Health Council nominating one or more persons for appointment.
However, the Commonwealth Minister would not be obliged to follow the advice received from state and territory ministers and the COAG Health Council.
EY estimated that the establishment of a Board would incur additional costs of about $200,000 per annum, mainly for payments to Board members. However, this additional cost would likely be offset by the Bill’s proposed abolition of the Advisory Council, whose members are currently remunerated.
The OTA is currently, and would continue to be, a listed entity under the Public Governance, Performance and Accountability Act 2013 (PGPA Act).The Bill provides that the Board will replace the CEO as the OTA’s accountable authority for the purposes of the PGPA Act. The Minister’s second reading speech observed that ‘there are no existing non-corporate Commonwealth Entities currently adopting this model’; that is, a model where the accountable authority for a non-corporate Commonwealth Entity is a governing board rather than an individual. Although unused to date, this arrangement is provided for in item 3 of subsection 12(2) of the PGPA Act.
The new governance arrangements do not change the OTA’s functions, but are expected to improve the OTA’s performance in a highly complex area of health policy and service delivery.