Chapter 3
Staff-elected director
3.1
The second component of the bill, contained in Schedule 2, reinstates
the position of staff-elected director to the ABC Board.
3.2
The position of staff-elected director was created by a legislative
amendment to the ABC Act in 1985. However, the origins of the position can be
traced to the position of staff-elected commissioner introduced by the Whitlam
government in 1975.[1]
3.3
The position was removed by an amendment to the ABC Act in 2006.[2]
At that time the Australian Labor Party, Australian Greens and Australian
Democrats Senators voted against the abolition of the position of staff-elected
director.[3]
3.4
The CPSU, Friends of the ABC and Mr Quentin Dempster, a former staff‑elected
director, were all strongly in favour of the reinstatement of the position. Dr
Kristin van Barneveld, Deputy National Secretary, CPSU, argued that a staff
elected director is:
...able to bring current knowledge and to provide those
skills to the board, and being able to make sure that decisions that are made
at the board level are decisions that, potentially, are the right decisions for
the organisation.[4]
3.5
Similarly, Mr Dempster described his experience in the position:
What I found in my time there was that you could have a
discussion, a very constructive discussion, and say: ‘How are we going to
handle this because there’s going to be a lot of hurt. Let’s work out where
this can be communicated to the staff.’ So the staff-elected director can be a
very positive force, assisting the ABC... [T]he staff-elected director can be a
part of the governance of the organisation and to give a sense of ownership of
the entity and its responsibilities and its reputation.[5]
3.6
Mr Dempster's submission traces the history of the position and gives a
range of examples in which the staff-elected director has protected the best
interests of the ABC, and particularly its independence.[6]
3.7
Mr McDonald, former Chair of the ABC Board, argued against the
reinstatement of the position on the basis that the Managing Director of the
ABC is already a member of the Board and is 'capable of representing the
interests of the staff'.[7]
3.8
However, Mr Dempster argued that:
The managing director can represent the staff view in terms
of saying, ‘They are not going to like this’ or ‘This should be good because we
are going to expand these services and there will be more creative
opportunities’. In that sense any managing director or chief executive is able
to say what the implications for the staff are. What I have been trying to say
is that the position has evolved as a very beneficial conduit to the governance
and management of the ABC.[8]
3.9
The reason behind the removal of the position in 2006 was that the
position 'is not consistent with modern principles of corporate governance' due
to the apparent tension between the interests of staff and the organisation as
a whole.[9]
In his second reading speech to the amending legislation in 2006, the then
Minister explained:
This tension is manifested in the potential conflict that
exists between the duties of the staff-elected Director under the Commonwealth
Authorities and Companies Act 1997 to act in good faith in the best
interests of the ABC, and the appointment of that Director as a representative
of ABC staff and elected by them. The election method creates a risk that a
staff-elected Director will be expected by the constituents who elect him or
her to place the interests of staff ahead of the interests of the ABC where
they are in conflict...
There is a clear legal requirement on the staff-elected
Director that means he or she has the same rights and duties as the other
Directors, which includes acting in the interests of the ABC as a whole. The
Government is of the view that there should be no question about the
constituency to which ABC Directors are accountable.[10]
3.10
However, both Mr Dempster and the CPSU gave evidence that this tension
does not in fact exist. Dr van Barneveld stated:
[T]he staff elected director is a board member like everybody
else and is subject to the legislative constraints of a board member like
anybody else. As I said in our submission, they most certainly are not the
representative of the staff.[11]
3.11
The CPSU explained that the role of representing staff interests is
carried out by unions, and not the staff-elected director:
We take offence at any suggestion that the staff-elected
director is the representative of staff on the board. That is the role of
unions. There are three unions covering employees at the ABC, and we defend our
role as being the representatives of staff. No staff-elected director has ever
made a claim to be the representative of staff and, in fact, past staff-elected
directors have communicated this directly to staff.[12]
3.12
Mr Dempster agreed with these statements and explained that:
When you are being approached, lobbied or emailed, [the
staff-elected director would say] ‘That's not something for me; take it up with
your representatives’.[13]
3.13
The committee notes that the duties of all ABC Board members include:
- ensuring that the ABC's functions are performed efficiently and
with maximum benefit to the people of Australia;
- maintaining the ABC's independence and integrity; and
- ensuring that the gathering and presentation of news and
information by the ABC is accurate and impartial.[14]
3.14
ABC Board directors also have a range of other obligations under Part 3,
Division 4 of the Commonwealth Authorities and Companies Act 1997,
including obligations to act in good faith, not to improperly use their
position or information from it to gain an advantage, and to disclose conflicts
of interest. The staff-elected director will not be, and was not previously,
exempt from these obligations and is accordingly bound, like any other director,
to act in the best interests of the ABC as a whole and to maintain its
independence and integrity.
3.15
Based on the evidence presented by the CPSU, Mr Quentin Dempster and the
Friends of the ABC, the committee believes that the reinstatement of the
position of staff elected director is in the best interests of the ABC.
3.16
However, Mr McDonald raised two pertinent points in relation to the
position of staff-elected director, that the committee considers should be
incorporated into the bill. The first relates to the burden on staff-elected directors
of campaigning for the position, and the pressure that the possibility of a
second term places on staff-elected directors. Mr McDonald explained:
I think the most burdensome part of it was that, in the
arrangements then—and at least these provisions are an improvement, if they are
passed—their term was for two years only and they could stand for another two
years. But it meant that if they wanted to do another term they were in a
position of campaigning or passively campaigning for a chunk of that time. So
they had to deal with all these pressures, all these inquiries and all these
bombardments. If this provision for a staff elected director were to go
through, I would urge the legislators to think seriously about limiting the
term of the staff elected director to one term only. I think the five years is
a big improvement on the previous two years and I think it would be an even
further improvement if they could never stand again, so that they did not have
to ever think about their re-election.[15]
3.17
The former staff-elected director, Mr Dempster supported this proposition
put forward by Mr McDonald.[16]
3.18
The committee accepts the argument by Mr McDonald, and supports limiting
the period a staff-elected director may serve to one term. Accordingly, the
committee recommends that the bill be amended to provide that a staff-elected director
may only serve one five-year term, and is not eligible for re-appointment.
Recommendation 5
3.19
The committee recommends that the bill be amended to provide that a
staff-elected director may hold office for a maximum of one five-year term.
3.20
The second issue that Mr McDonald raised that the committee feels should
be reflected in the bill is why the ABC Board and not the SBS Board is to have
a staff‑elected director:
If it is good and necessary for the ABC, why is it not good
and necessary for SBS?[17]
3.21
Mr Dempster agreed that this was a good suggestion.[18]
3.22
The committee did not receive any evidence on the specific situation of
the SBS, but notes that the SBS Act currently provides that in appointing
directors:
...the Governor-General must have regard to the need to
ensure that the Directors include a person who the Governor-General is
satisfied, having regard to consultations between the Minister and
representatives of industrial organisations representing employees, has an
appropriate understanding of the interests of employees.[19]
3.23
However, this provision does not require that the director be a current
staff member. The committee is convinced of the benefits of having a current
staff member on the board of the ABC, and considers that the same principles
that justify the position on the ABC Board warrant the extension of the
position to the SBS Board.
Recommendation 6
3.24
The committee recommends that the SBS Act be amended to include a
staff-elected director on the SBS Board.
Conclusion
3.25
Overall, the committee considers that this bill represents a much needed
reform to two aspects of the governance of public broadcasters in Australia – a
merit‑based selection process for ABC and SBS Board appointments and the
inclusion of a staff‑elected director. Subject to the amendments
contained in recommendations 3–6 of this report, the committee recommends that
the Senate pass the bill.
3.26
Appendix 3 contains suggested amendments to the bill to reflect
recommendations 3–6.
Recommendation 7
3.27
Subject to the amendments contained in Recommendations 3–6 of this
report, the committee recommends that the Senate pass the National Broadcasting
Legislation Amendment Bill 2010.
Senator Doug Cameron
Chair
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