Review of Commonwealth Government Business Enterprises ...

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2.2.4 The Australian Institute of Company Directors (AICD) has a code of conduct for directors of
corporations. 6 However, this does not apply to employees and contractors.
2.2.5 Further, Finance considers it important that GBEs should avoid activities that could give
rise to questions about their political impartiality. In particular, GBEs should not make
direct or indirect political donations or participate in activities sponsored or in support of
partisan political causes. This is refected in the revised Guidelines.
2.2.6 As a general guide, Finance considers that a code of conduct for GBEs should cover the
following areas: being professional and apolitical; customer service; work practices and
performance; confict of interest; relationship with suppliers; gifts and benefts; outside
employment; appropriate use of assets and resources; and confdentiality of information.
Proposed Change: (New)
2.4 Boards should continue to regularly monitor the ongoing independence of each director
and the board generally to ensure that they continue to exercise unfettered and
independent judgement.
2.5 In particular, the government expects GBE boards to establish and maintain a code of
conduct for directors, employees and contractors and to ensure that GBEs, in undertaking
their business, avoid activities that could give rise to questions about their political
impartiality. For example, GBEs should not make direct or indirect political donations or
participate in activities sponsored or in support of partisan political causes.
2.6 The code of conduct may cover the following matters: being professional and apolitical;
customer service; work practices and performance; confict of interest; relationship
with suppliers; gifts and benefts; outside employment; appropriate use of assets and
resources; and confdentiality of information, including in electronic form.
2.3 Board Appointment and Performance
2.3.1 The selection of suitably qualifed people to the governing board of a GBE is an important
responsibility of the Shareholder Minister(s) and the government. Board appointments are
the most direct way that the Shareholder Minister(s) can infuence the performance of a
GBE. Equally, board planning is an important component of the overall risk management
strategy of a GBE and should form part of the board’s regular activities.
2.3.2 Finance considers that the process proposed will increase transparency, accountability,
and importantly, ensure the calibre and diversity of candidates appointed to GBE boards
continues to be appropriate to the importance and scale of these signifcant Australian
public sector entities.
2.3.3 The proposed changes are consistent with the government’s policy principles on
transparent and accountable public administration and draw on government appointment
processes used internationally. They also refect developments in the private sector, the
revised ASX guidelines, 7 and the work of the Commonwealth Government’s Corporations
and Markets Advisory Committee (CAMAC), 8 whose recent publications focus on the need
to enhance board diversity and quality.
Exposure Draft
6 Australian Institute of Company Directors. “Code of Conduct”, page 1 (September 2005). Refer to
http://www.companydirectors.com.au/General/Search?q=Code%20of%20Conduct
7 ASX Corporate Governance Principles and Recommendations Second Edition August 2007,
http://asx.ice4.interactiveinvestor.com.au/ASX0701/Corporate%20Governance%20Principles/EN/body.aspx?z=1&p=-1&v=1&uid=
8 Australian Government Corporations and Markets Advisory Committee (CAMAC): March 2009 report, Diversity on Boards of Directors
(www.camac.gov.au), http://www.camac.gov.au/camac/camac.nsf/byHeadline/PDFFinal+Reports+2009/$fle/Board_Diversity_B5.pdf