Government boards need stronger policies to handle conflicts of interest, an audit finds.

The Australian National Audit Office (ANAO) has highlighted gaps in managing conflicts of interest on government boards, despite largely effective efforts across four Corporate Commonwealth Entities (CCEs). 

The audit, covering the Australian Sports Commission (ASC), Food Standards Australia New Zealand (FSANZ), Infrastructure Australia (IA), and the National Portrait Gallery of Australia (NPGA), calls for improved policy documentation, training, and thorough handling of board members’ disclosures.

Conducted over the period from 1 July 2021 to 31 December 2023, the audit aimed to assure Parliament of these boards’ integrity in managing conflicts of interest. 

It found that while these boards generally met legislative requirements under the Public Governance, Performance and Accountability (PGPA) Act 2013 and PGPA Rule 2014, “the arrangements implemented by boards had shortcomings in sufficiently documenting policies and procedures”, as well as in preparing “management plans for potential conflicts of interest”.

In total, 66 board meetings were reviewed, with 37 recording declarations of interest.

Issues arose in the documentation of these declarations and in assessing whether declared interests represented material personal interests that required action. 

For instance, the NPGA lacked a comprehensive conflict of interest policy specific to its board, while ASC and FSANZ had no plans to address conflicts involving board members with other government roles.

The audit’s recommendations included urging the NPGA to update its policy to specify board-specific requirements, while calling on ASC and FSANZ to assess conflict risks for government-affiliated board members and document suitable mitigation measures. 

A further recommendation advised all four boards to create procedures for recording conflict assessments. 

Additionally, the Department of Finance was advised to improve training to promote consistent awareness across government boards, as the audit found many relied on limited induction processes and lacked ongoing training and monitoring mechanisms.

All four boards and the Department of Finance have expressed support for the ANAO’s recommendations. 

These findings resonate across Australian government boards, especially in the context of risk management, documentation, and conflict policies. 

According to the ANAO, “accountable authorities of CCEs should assess these risks and develop appropriate arrangements to manage conflicts of interest, including policies and procedures that are tailored to entity risks”.

The full report is accessible in PDF form, here.