2019 Public Service Review: What it could mean for Governance and Accountability in the Public Service

Introduction

Looking back (longingly) to the pre-COVID era, the then eagerly-awaited Independent Review of the Australian Public Service (Review) was released by the Federal Government in December 2019.

The Review was a comprehensive thematic analysis intended to provide a long-term roadmap to help ensure that the Australian Public Service (APS) is fit-for-purpose for future decades. And, as acknowledged by the senior APS leadership, the Review highlights the need for the APS to adapt to meet the rising expectations of Australians and emerging opportunities and challenges – economic, social, technological and geopolitical.

An independent panel (Panel), chaired by David Thodey AO, conducted the Review, the largest exercise of its type in over 40 years. A product of extensive consultation and discussion with the APS, Government and many other stakeholders, the Review reached some challenging conclusions and made some far-reaching recommendations.

The Review concluded that, although the APS is not broken, it needs ‘a service-wide transformation to achieve better outcomes’¹. To become a high-performing institution, deep cultural change within the APS is required. The Panel noted that the APS needs ‘short-term change and long-term reform’² and ‘is not performing at its best today and it is not ready for the big changes and challenges that Australia will face between now and 2030’³.

The Prime Minister recognised that the Review had delivered a comprehensive reform agenda and presented the Government’s response in the document Delivering for all Australians released at the same time as the Review. Delivering for all Australians looks to build the APS’ capability and workforce to better support Australia and Australians in the years ahead. The Government contemplated ‘a three month sprint’ in early 2020 at senior levels of the APS to plan for implementation of the necessary reforms to the APS.

Since then, the COVID-19 pandemic has naturally dominated the attention of the Government. The pandemic’s effect on Delivering for all Australians is still to be assessed as we await further developments on the implementation of APS reforms. It will be very instructive to see how the priorities mentioned in the Government’s response are managed for the purposes of improving the APS.

One key theme of the Review was Improving leadership and governance arrangements – an area that has been hugely tested by the pandemic. We now look further at that theme’s role, and specifically at governance, as a major priority in achieving the objective of making the APS ’fit for purpose to serve all Australians now and in the decades ahead’⁴.

Governance

The Review made 40 recommendations for how the APS can achieve an ’organisation-wide transformation’⁵. These included:

• Streamline management and adopt best practice ways of working to reduce hierarchy, improve decision-making, and bring the right APS expertise and resources (Recommendation 32)
  
  This was agreed by the Government in its response.
  
  
• Clarify and reinforce APS leadership roles and responsibilities (Recommendation 38)
  
  Interestingly, this was not agreed to by the Government (on the advice of the Secretaries Board (the board of APS Heads)) which felt that the relevant senior roles and responsibilities worked effectively and did not need further clarifying legislation.
  
  
• Reform and energise the APSC (the Australian Public Service Commission) as a high-performing and accountable central enabling agency (Recommendation 40).
  
  This was agreed to by the Government in its response.

Notably, the Panel asserted that ’only good governance and empowered leaders can convert strategy to outcomes’⁶. Good governance is therefore absolutely key to delivery of better outcomes, in the Panel’s eyes.

And the Panel emphasised that clear roles and responsibilities backed up by the necessary accountability for performance and actions are ’critical to better governance and leadership’⁷. The Panel also saw effective performance management as another key to the delivery of better outcomes. In part, presumably, because good performance management can encourage proper accountability for the performance of responsibilities.

Aspects of Good Governance

The key Governance chapter Empower Leaders to Make a Difference emphasises the role of good governance in delivering better outcomes⁸. Interestingly, it refers to Commissioner Kenneth Hayne’s clarity on the importance of good governance as expressed during the Banking Royal Commission⁹. Commissioner Hayne’s observations on governance may well be a useful guide that the APS can apply, at a more micro-level, to its governance priorities.

Hayne recognised that the term ‘governance’ can ‘provoke a torrent of clichés [and] can provoke serious debate about definition’¹⁰. He viewed the term as referring to ‘the entirety of structures and processes by which an entity is run. By shaping how the business is run, governance shapes culture… It embraces not only how, and by whom, decisions are made, but also the values or norms that the processes of governance are intended to effect.’¹¹ Governance and culture are therefore inextricably linked.

So, what might the implementation of good governance within the APS look like?

We focus on three areas that typically have a big impact on good governance: accountability, the role of information and a culture of oversight and challenge.

Accountability

As Commissioner Hayne stated: ‘notions of accountability lie at the heart of governance. Who is to be held accountable for what is done or not done? How are those who are accountable held to account?’¹²

The Review contemplates greater accountability as being needed within the APS. The Review’s recommendations in this area and its analysis focused at the senior end of the APS.

However, a culture of accountability, and owning one’s responsibilities, should be reflected at all levels of the APS, not only at the top. This points to the need for clear lines of accountability within the APS’ departments and agencies: as Hayne noted in the context of the banking sector: ‘without clear lines of accountability, consequences were not applied, and outstanding issues were left unresolved’¹³. Which inevitably blocks the delivery of good outcomes.

Information

Any organisation making a decision needs an appropriate level of data on which to base that decision. The Panel recognised that the APS ‘needs to use data to provide better advice to the Government and better services to all Australians. This requires building capability in data and digital expertise.’¹⁴

Where individual managers or executives within the APS make a decision or where a decision or strategy is being overseen or reviewed, are relevant questions being asked, such as:

• Do we have the right information?
• What do we have to do to get better information if what we have is deficient?
• Are we doing enough with the information in order to make the decision or oversee or review the relevant decision or strategy?

With the right information, comes the ability to challenge and test decisions or strategies. And, importantly, it is up to the organisation, and its various management and non-executive levels to keep considering the information at its disposal and how it might be improved.

These concerns about the effective use of information within the APS link to the various recommendations made around the theme in the Review on Embrace Data and Digital. These included recommendations on building data and digital expertise and improving the structure and management of digital functions across the service.

A culture of challenge through diversity

Dynamic, transformed organisations value collaboration but also embrace the idea of testing or challenging pre-conceived notions or traditional decision-making. This attitude will be important to drive the transformation that the Review and the Government sees as necessary for the APS.

A culture of constructive challenge is especially important at senior levels in major organisations, for example where non-executive leaders perform the necessary supervisory tasks of holding executive functions to account. That culture of constructive challenge contributes to the strength of accountability and also depends for its effectiveness on the availability of the right information.

The Review captured this in its Recommendation 25 – strengthen the APS by recruiting, developing and promoting more people with diverse views and backgrounds. The Panel noted that ‘Diversity — of background and life experience as well as in expertise and viewpoints — creates challenge, provokes thought and encourages change. It provides different insights, which are especially valuable in tackling the complex and ambiguous problems faced by government each day.’¹⁵

Interestingly, the Government agreed to this recommendation only in part, stating that it is committed to shaping an APS that reflects the people and communities it serves and acknowledged that the APS leadership is currently engaged in actions to increase diversity and inclusion across the APS, through renewed Indigenous, gender and disability employment strategies. The APS leadership did not consider additional goals were needed to advance this work.

These three areas are not the only governance and culture issues that the APS will be considering, but they are very much among the important priorities for the development of a successful, transformative and modern organisation.

And, prudently, the Review repeats (and attributes to the APS) what is arguably Commissioner Hayne’s most important recommendation in the Banking Royal Commission final report: ‘the APS needs to continuously assess whether its culture and governance are right for its operating environment, identify any problems, make necessary changes and assess whether shifts have been effective.’¹⁶

Implementation of APS reforms

The public awaits with interest further developments on the APS’ progress in implementing the various recommendations agreed to by the Government in Delivering for all Australians.

What is clear from the experience of other sectors is that matters of governance for the APS will need constant work and oversight, and adjustment as the conditions of the operating environment within which a department or agency works change (as they inevitably will). Governance and culture are never fixed once and for all.

Good governance concepts can sometimes be described in great detail and abstract phraseology. However, APS public servants (whether senior or junior) will be best served by clear demonstrations in their working day of effective governance, straightforward easy-to-access guidance and a clear re-setting of service expectations on what good governance (and culture) looks like. Providing this to APS public servants will go a long way to achieving the quality decision-making and accountability that any successful organisation needs in order to learn, progress and develop into a world-class performer.