Review of Commonwealth Government Business Enterprises ...

2.3.4 These changes aim to make GBE director appointment processes more structured and
open, and to keep the ongoing composition of the board under review. This approach has
been used successfully in other jurisdictions including New Zealand where the Crown
Ownership Monitoring Unit (COMU) has the objective of developing an active and open
approach to board composition and renewal with a view to maintaining the best balance
of skills and experiences that match the strategic direction and needs of the GBE. 9 In
addition, the changes refect developments in appointment processes in the private
sector and international governments. Principally the recommended changes incorporate
current Government policy (in respect of merit and transparency in senior Government
appointments, and gender and diversity targets). The changes also aim to improve board
planning and ensure that recommended candidates represent the best possible feld.
2.3.5 The proposed changes also refect the importance of the cost and timeliness associated
with any board appointment process. Consideration has been given to the need to
balance the requirement for greater accountability, independence and rigor against the
need for effciency and cost-effectiveness. The New Zealand COMU has quite a mature
recruitment model which also includes an on-line application system for members of the
public. However, given the broad range of activities undertaken by Australia’s GBEs, we
consider that allocating greater responsibility to GBE boards for the sourcing of suitably
qualifed candidates for director positions will result in the generation of a stronger feld of
appropriate candidates in a more effcient manner. For each vacancy, boards will need to
determine whether to arrange to publically advertise upcoming vacancies and/or to identify
candidates via executive search processes.
2.3.6 There have been a number of studies over recent years that have concluded that
organisations with gender diverse boards have a higher level of organisational
effectiveness and fnancial performance than their more male dominated counterparts.
For example, the CAMAC report on ‘Diversity on Board of Directors’ 10 examined the issue
of diversity on boards, including the participation of women. It concluded that a focus on
a more robust and open approach to board appointments will foster a governance culture
that embraces diversity in the composition of corporate boards.
2.3.7 Gender diverse boards show greater evidence of diversity of thought and perspective and
at the same time, greater unity and collegiality. Unity is a fundamental strength of an active
and independent board and implies a focus on the importance of the board as a whole,
active support by all directors for decisions made, an atmosphere of trust, respect and
confdence amongst members and a combination of internal dissent and external solidarity.
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9 New Zealand Crown Ownership Monitoring Unit, ‘Selection Criteria’ http://www.comu.govt.nz/board-appointments/what-we-look-for/
10 Australian Government Corporations and Markets Advisory Committee (CAMAC): March 2009 report,
Diversity on Boards of Directors (www.camac.gov.au)
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