Here at Board Matters, we are believers that history tends to repeat itself if we do not effectively learn from the past and make sustainable changes to minimise the bad in the future. As such, there is no better time than when a year comes to an end to reflect on the year that has gone (or the last two that have essentially blended together) and see what we can learn. One such Brisbane event came to light and there are lessons here that have been missed from history’s past; brought to you by the tale of a politician, a principal, and a public servant.

In July 2020, Queensland’s Crime and Corruption Commission (CCC) published their final report into allegations of interference with the Queensland Department of Education’s recruitment of a foundational principal for a new South Brisbane school. The matter was investigated by the CCC when complaints were received by a whistleblower against the former Deputy Premier and Treasurer of Queensland, Jackie Trad. Although no wrongdoing was ultimately found, and publication is not always required, the CCC published their report on the basis that doing so would best serve the public interest and promote public confidence in the government and its public servants being held to account.

The CCC’s investigation and report are concerned with the conduct of Department of Education staff but, in our view, contain important insights and broader lessons for boards and decision makers of all kinds and resonate far beyond the senior level State public servants in the CCC’s focus.

Summary of the CCC’s findings

Stretching to 176 pages, in summary, the CCC found that:

• the (then) Deputy Director-General’s over-responsiveness and relationship to the former Deputy Premier was considered to have resulted in an infected decision-making process of the recruitment of a school principal appointment clouded by perceived political influences;
• Trad was indirectly involved, outside of the selection and recruitment processes of the Department of Education, from the former Deputy Director-General’s (now) ill-advised informal ‘meet and greet’ invitation with the principal candidate who, unbeknownst to Trad, had already been approved for the role by the authorised selection panel;
• there was no prima facie case against Trad as her actions were not motivated by ‘any dishonest or corrupt intent,’ but the involvement nonetheless was commented to be an influential factor to the Department of Education’s ultimate decision. The CCC made particular note of its problematic nature as the Department of Education’s decisions in the public sector should remain free from all political influence;
• the (then) Deputy Director-General had inaccurately represented proposed enrolment numbers to overstate the appropriateness of a higher positioned principal role in order to justify the removal of the already selected principal, and further decisions made by the Department of Education from the misleading distributed data;
• Department of Education officials went to inappropriate lengths to mitigate the use of this false information and the actions of the former Deputy Director-General, to the extent that department officials were instructed to destroy and delete email records noting the misleading data and its uses; and as a result,
• the actions of the Department of Education and its officials were dishonest and neglectful of the ethical obligations incumbent upon them as members of the Queensland public service.

The investigation has since been forwarded to the Public Service Commission (PSC) for review in relation to the Department of Education’s actions. As of writing, the results of a PSC review are not publicly known. However, in what we can only assume in response to the forwarded review, the PSC released a directive in June reaffirming that “merit assessments must occur” in public sector recruitment. Sources have also reported that the report has been handed to the parliamentary crime and corruption committee, but no comment has been made to whether it has been tabled in parliament yet.

Though contexts may differ, there are lessons to be learned from this series of events and which are equally applicable to decision-makers of all kinds.

Lesson 1: Mind your influence

The CCC report highlights the obligation of public officials to promote public confidence that administration processes are free of inappropriate influences. Considered more broadly, boards and committees are also well served to remain continuously vigilant for actual or potential influence in their own decision-making processes.

Influence, whether indirect and unintentional (or the contrary), poses a significant risk to those charged with decision making power. The salient reminder here is two-fold; firstly, remain ever aware of your own level of influence on those decision makers around you and, secondly, as a decision maker, remain cognisant and alert to your own susceptibility to influence from others.

If you’d like to read and delve more into this topic of influence, you can do so by purchasing a copy of ‘The Role of the Company Secretary: Influence, impact and integrity’, written by the Managing Director of Board Matters, Jennifer Robertson.

Lesson 2: Ethics assist integrity

It goes without saying that board members ought to follow, individually and collectively, clear ethical principles when participating in decision making processes. In particular, communication lines should be transparent and clearly reported. Having accessible and established protocols for communication within any organisation builds effective relationships and interactions and mitigates the risk of incorrect assumptions and suspicions derailing appropriate conversations.

Obviously, embellishing or exaggerating information to further a misleading and borderline deceitful agenda is entirely unacceptable, unethical and can result in reputational (and possible legal) consequences. At the very least, to engage in such behaviour (and, to then perpetuate the misinformation) demonstrates a clear lack of integrity and ethical judgement.

Lesson 3: Ask to understand

Every decision or directive made has significance. It is critical, therefore, that decision makers be fully informed when determining their view and ‘signing (or voting) on the dotted line’. Humility and true curiosity are crucial in producing strong human leaders. For directors, it is important to continually analyse, and question, information and data presented to ensure it is fully understood. This applies equally where gaps are perceived or information presented remains silent on an issue.  Absent this, it is easy to unwittingly neglect underlying duties and obligations, such as those requiring directors to act with due care and diligence.

If the events investigated by the CCC prove insufficient motivation to ‘get curious’, parallels can be seen between these events and the events founding the notable decision in the James Hardie Group case.  To recap, James Hardie involved decision makers releasing information to the market which was, ultimately, found to be misleading. The decision of the High Court of Australia found that officers and non-executive directors of the company breached their statutory obligations under s 180(1) of the Corporations Act 2001 (Cth) to exercise their powers and duties with reasonable care and diligence and, importantly, stated:

“…the onus was on them [the officers] to be cautious when voting on the making of the announcement – either by seeking further information or by explicitly abstaining. They gave evidence that if they had known the terms of the announcement approved, they ‘would not have’ voted for it. This does not sit well with their conduct in leaving to other directors the task of devising the announcement’ [at pp 311].

Lesson 4: Legal compliance is the bare minimum

Accurate and complete recordkeeping and documentary trails are effective ways of demonstrating accountability and ensuring responsibility rests where it should within the bounds of legal compliance. It goes without saying that instructing, or acting on instructions, to destroy documents or records in an attempt to further deceitful or misleading actions is entirely unacceptable and, in some contexts, potentially illegal.

To support an organisation’s governance efforts, a clear and transparent document retention policy is crucial and, together with fulfilling legal obligations, can be an effective way to demonstrate legal compliance in its clearest form. If further convincing is required, consider the lesson learned by the British American Tobacco company in the infamous 2002 case.  In that High Court of Australia case, the document retention policy was heavily criticised as being more in line with destruction than retention. Directors and board members alike should remain vigilant and ensure they act, and are seen to act, within the boundaries of policy, the law and entirely transparently to mitigate the risk of criticism and, at worst, litigation.

Lesson 5: Look back to move forward

Without review and reflection, identifying lessons learned is impossible. It is important for decision making bodies to commit to regular evaluations of their processes in order to identify strengths as well as opportunities for improvement to ensure they are ‘fit-for-future’ and the evolving needs of the organisation. The review and reflect can be formal or informal, undertaken internally or aided by a third-party evaluator.  Regardless of the method chosen, ensuring an objective approach is taken to assessing performance and identifying areas of improvement will ultimately reap more benefits for the organisation and those it seeks to invest in.

If you wish to learn more about the benefits of a board evaluation within your own organisation, Board Matters and our team of governance specialists would be delighted to begin that conversation.

Despite the former Deputy Premier being cleared by the CCC in its decision, events like these highlight the importance of governance practices and structures being in place to ensure the lines of influence, integrity, accountability, and transparency are not blurred in the public sector or otherwise.