11/05/2021 - 08:00

Who’s onboard with political ties?

11/05/2021 - 08:00

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What are the qualifications that make an individual suited to sit on a government board?

Who’s onboard with political ties?
Michael Barnes has chaired the state’s treasury corporation since 2014. Photo: Attila Csaszar

MISSING from the media release announcing that director, public servant and social worker Helen Creed would join the board of Water Corporation this past month was any mention of her professional ties to the union movement.

Despite substantial experience leading the United Workers Union’s state branch for 12 years and serving as its national president, Ms Creed was highlighted instead for her executive experience with the Department of Communities, and her board positions at Tourism WA and the Zoological Parks Authority.

Dave Kelly, who made the appointment as the state’s water minister, hailed the move as an important step for growing the representation of women on state government boards, while omitting that he was her immediate successor in the role of UWU’s state secretary prior to his election to state parliament in 2013.

A spokesperson for Mr Kelly was contacted by Business News to provide further details on the minister’s working relationship with Ms Creed and why these details were not highlighted in the state government’s announcement of her appointment.

Business News is not suggesting any impropriety on the part of ministers, directors of Water Corporation or any senior officials in the appointment.

Instead, this information is intended to highlight the professional experience of those who are appointed to the boards of state-owned enterprises and how they come to be appointed in the first place.

These positions are, after all, just one of the spoils of government, and Labor had made a campaign issue of the gender imbalance on government boards ahead of the 2017 state election.

Ms Creed’s hiring ostensibly contributes to the state government’s goal of achieving gender parity on government boards, as do initiatives such as OnBoardWA, an online portal aimed at growing the representation of women on government boards.

And while close to 60 per cent of appointments to government boards during Labor’s first term in office were women, OnBoardWA’s own guidelines suggest these appointments can be made through the assistance of recruitment firms, existing networks and job advertisements, potentially bypassing those who apply through OnBoardWA.

A spokesperson for the Department of the Premier and Cabinet was contacted by Business News to provide further details on how many board appointees have been hired because of applications lodged via OnBoardWA.

All of this is to suggest that, while many board positions are filled through statutory requirements and other political initiatives, shareholding ministers are often given a free hand to nominate whomever they see fit to sit on the boards of dozens of state-owned enterprises.

Data & Insights indicates that at least 10 ministers oversee appointments to paid positions on the boards of state government-owned businesses, with Premier Mark McGowan the shareholding minister charged with appointments to the boards of Gold Corporation, Western Australian Treasury Corporation, Insurance Commission of Western Australia, Lotterywest, and GESB.

That’s the most of any shareholding minister besides Rita Saffioti, the state’s ports, planning and transport minister, who oversees appointments to the state’s five major ports authorities.

Mr Kelly, meanwhile, has a hand in appointments to Water Corporation, Forest Products Commission, ChemCentre, and Aqwest, while Reece Whitby, Bill Johnston and Tony Buti get a say in appointments to the boards of three state government-owned businesses, and Stephen Dawson, John Quigley, John Carey and Roger Cook oversee one of these businesses each.

These businesses collectively employ hundreds of directors and paid out approximately $8.8 million to directors this past financial year, not including dividends or other remuneration.

While many of these appointees are uncontroversial, drawn from the boards of NFPs and ASX-listed entities as well as the senior levels of the bureaucracy, some come to the job with unique political ties.

That was the case this past September when then-treasurer Ben Wyatt nominated former premier Alan Carpenter to serve on the board of DevelopmentWA.

Mr Carpenter’s position, for which an annual salary has not yet been published, gives him a statutory role on the boards of both the Western Australian Land Authority and the Metropolitan Redevelopment Authority, as well as strategic oversight of one of the state’s largest land developers.

Mr Carpenter’s appointment was also noteworthy, in part, because of his professional experience, which, prior to leaving state politics in 2009, included stints as a journalist for Seven West Media and the Australian Broadcasting Corporation.

Granted, the former premier did hold an array of ministries, including state development, in the early 2000s, as well as nine years in executive management with Wesfarmers and two years on the board of Perth-based insurer HIF.

It is not unexpected, therefore, that Mr Wyatt drew on a former colleague for such an appointment, with Mr Carpenter one of a handful of state politicians who now serve on government boards.

Among others are: Jim McGinty, a former attorney general and health minister who collects an annual fee of $34,203 as a board member of Lotterywest; Tom Stephens, a former regional development minister now on the board of the Pilbara Port Authority; and Sharryn Jackson, the on-again, off-again federal representative for Hasluck who is paid $17,405 per annum as chair of Workcover.

And the list doesn’t include those who would go on to become politicians, like Lara Dalton, who unsuccessfully contested the seat of Geraldton in 2017 before winning it in 2021.

Ms Dalton was appointed to the board of the Mid West Ports Authority in 2019, a role for which she earned $28,581 this past financial year.

To be clear, there are no legal or ethical barriers that prevent ministers from appointing colleagues or political allies to board positions, and it is not unusual for politicians to rely on their existing networks to fill these positions.

Take, for instance, the appointment of Ross Love as chair of Water Corporation in September.

Mr Love is by all appearances well qualified for the job, having spent 25 years with Boston Consulting Group and served an 18-month stint with the Minderoo Foundation.

Mr Kelly’s accompanying announcement, however, made no reference to Mr Love’s party patronage, which included time spent as an adviser to deputy premier Mal Bryce in the 1980s and as chief of staff to premier Carmen Lawrence in the 1990s.

Affiliation to a party is not in and of itself disqualifying and does not reflect on how any board member discharges their duties while on the board, and in the case of Mr Love may simply have been a result of him being the most qualified for the role.

“Clearly, ministers would feel more comfortable knowing the people they’re appointing, and so would therefore look at their own networks [when making these appointments],” John Phillimore, executive director of the John Curtin Institute of Public Policy, told Business News.

“It comes down to … where people know you from, both back at university and through networks in the political, industrial, commercial, and not-for-profit areas.

“It doesn’t hurt to have those connections, but you do want the person to ideally have other skills and expertise.

“You wouldn’t want people just known from politics and don’t have a broad range of experience.”

Daniel Smith, founder and executive director of CGM Communications, broadly agreed, saying it stands to reason that ministers would look to their networks when making these appointments.

“If you want to be considered for a role, people have to know that you’re interested,” Mr Smith said.

“You need to be known to the people who make the decisions; you can’t expect to be recruited if nobody knows you want [that role].”

Few would argue that figures like Messrs McGinty and Stephens were appointed without adequate experience.

Mr McGinty, who was a secretary for UWU prior to representing Fremantle in the state assembly between 1990 and 2009, has accrued significant experience as a board director in retirement, including as chair of the North Metropolitan Health Service and not for profit Communicare.

None of those roles are remunerated, per financial disclosures to the Department of Health and the Australian Charities and Not-for-profit Commission.

Mr Stephens, meanwhile, was appointed to the board of the Pilbara Port Authority after representing electorates in the state’s north for more than 30 years and came to the board with experience as the interim chair of the Gascoyne Development Commission and as a director of Lost and Found Opera.

While neither was required to have that experience prior to their appointment, other positions are constrained by legal requirements; that is, while some boards appear dominated by appointees of either major party, statutory requirements limit the scope and nature of who can be appointed as a director.

For example, WorkCover’s board initially appears heavily weighted towards Labor appointees, with six of its seven members, including Ms Jackson, hired during Mr Johnston’s tenure as the state’s industrial relations minister.

On closer inspection, however, two of its members – including agency chief Chris White and the department’s director general, David Smith – serve in an unpaid, statutory position, with a further four required by law to have experience in employers’ interests, workers’ interests, insurance matters and accounting.

The board of Racing and Wagering WA, for instance, mandates three of its eight board members be drawn from the thoroughbred, harness and greyhound racing codes, while the Small Business Development Corporation similarly mandates a split of regional and metropolitan based small business owners as directors.

Some boards even allow for some political bandwidth, with GESB’s board split between three members appointed by the state’s treasurer and another three members elected and nominated by UnionsWA.

The board’s chair, John Langoulant, serves in an independent capacity.

Highest earners

One might also consider that these appointments often carry remuneration that, in some instances, can rival salaries offered in the private sector.

That appears to be the case for Western Power chair Colin Beckett, whose salary of $132,000 appears roughly on par with his annual income of $162,500 accrued as deputy chair of ASX-listed oil and gas explorer Beach Energy.

Other big earners include Mike Hollett, who in the year to June appeared to have earned an annual salary of $517,000 as chair of Water Corporation, and Michael Barnes, who officially earned nothing for his position as chair of the WATC but had an annual salary of more than $500,000 as the state’s under-treasurer.

Other appointments come with far less lucrative pay packets, with major figures such as Sam Walsh, the chair of Gold Corporation, receiving a modest salary of up to $70,000 for his work as chair.

A position on the Metropolitan Cemeteries Board, for instance, comes with an average annual salary of just $8,000 to provide strategic direction of the burial, cremation and commemoration at six of Perth’s cemeteries.

Chairing the Animal Resources Authority, meanwhile, earns Tony Tate as little as $1,840 annually for the pleasure of overseeing an organisation that provides laboratory animals for research and testing purposes in WA.

All of which is to say that, while some of these positions come with great fanfare and remuneration, others are often filled by those with a passion for public service.

“I don’t think you’re going to get rich sitting on a government board,” Mr Smith said.

“Directors fees aren’t huge; what you can draw from that is that the people who are putting their hands up to do these things are doing so to make a positive contribution to the state, and I think that should be welcomed.”

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