As the banking Royal Commission prepares to deliver its final report this week, former royal commissioner Robert Fitzgerald AM outlines why it’s important for directors to learn from the findings and take action.
Commissioner Fitzgerald, who personally interviewed hundreds of victims/survivors as part of the Royal Commission into Institutional Responses to Child Sexual Abuse, is seeing results from the commission’s powerful work and will speak frankly at the Australian Governance Summit on: Reflecting on the Royal Commissions.
What do you hope your audience will take away from your session at the AGS?
My hope is that board members and leaders at the conference will get an insight into outstanding learnings from recent royal commissions about the need for good, ethical and proactive governance. They need to understand how to create ‘fit for purpose systems’ to keep organisations ethically sound and the importance of transparency and accountability both within the organisation and publicly to safeguard the organisation’s values and reputation.
Why is it important for directors to be across such landmark reports?
Royal Commissions are very unique beasts with extraordinary legal powers. They give us an insight into individual and organisational conduct in a way that is not possible by any other means. They do show us what’s gone wrong but most importantly they give us an opportunity to learn what is needed to fix those problems for the long term. So it is really important that leaders engage in the reports from the Royal Commissions, reflect on their findings and embrace their calls for reform.
What do you see as lasting impacts of Australia’s latest royal commissions?
Australia has had over 130 royal commissions since 1900. Each has added value in understanding industries and institutions. Royal Commissions have wide-reaching powers of interrogation. They are inquisitorial by nature, don’t apply the normal rules of evidence, they cost a great deal and they take an enormous amount of energy and effort to conduct. And I think they should be used very sparingly.
The recent work of the Royal Commissions into trade unions, banking and financial services and child sexual abuse really goes to the heart of how we govern our institutions in Australia.
Royal Commissions identify individual wrongdoing and individuals should be held to account. As importantly, they expose organisational wrongdoing and boards should be held to account both legally and otherwise. But I think for all organisations, there are great opportunities to learn so as not to repeat the mistakes of the past.
I hope the recent Royal Commissions will drive home the need for real changes to the way in which organisations are governed, managed and held to account. I hope that changed organisational cultures, where values are lived out in practice at every level, are a lasting impact of such inquiries.
We can do much better and I do think ultimately it’s about applied values, ethical conduct and openness and accountability, both internally and publicly. The more open and accountable organisations are internally, the more open and accountable they are externally. And we now know bad practices and misconduct flourish in the dark.
What are the key priorities for governance this year?
There are three things that are going to confront Australia this year. First we need to think about whether we have the right regimes to monitor and hold to account all sorts of institutions. There’s a lot of discussion about whether we have the right regulatory mix and frameworks and getting the right regulatory response is important.
Secondly, we need to examine if we actually have a proper and helpful understanding of good governance. Everyone talks about governance but the question is – what actually is good governance? The royal commissions may help us in answering that question.
Thirdly, we need to look at what is the nature of ethical conduct in the delivery of goods and services in all public or private organisations. Surely, the least we should expect is for organisations to keep their promises to their members and consumers, to act in their best interests and to deliver goods and services in a responsible, lawful and ethical way. However, all the royal commissions suggest many institutions do not.
Whistleblower legislation is due to pass Federal Parliament. Should all boards be on notice that more transparency is on the way?
The banking Royal Commission has demonstrated that somebody always knows what has gone on and somebody will always tell. So whether disclosure comes from formal whistleblowers or otherwise, organisations can never again believe that what happens inside stays inside.
Formal whistleblowers need to be protected, but there must be avenues and spaces within organisations for people to safely raise concerns when they see bad conduct or practices.
Where do they have a voice? Where can they safely go within the organisation, including at the most senior level, to raise their concerns? They need to be able to go right to the very top ,yet many organisations repress those sorts of views and people. Frankly, the Royal Commissions show the dangers of such a repressive approach both for the organisation, as well as for well-intentioned individuals.
Are you personally satisfied with progress on recommendations from your own Royal Commission?
The Royal Commission into Institutional Responses to Child Sexual Abuse has had an extraordinary early take-up in relation to its recommendations. We saw during the life of the commission many institutions and governments reacting to our findings.
Despite this, I think it is a very long journey, even though there have been some very quick wins. We have witnessed the empowering of victims/survivors, new redress arrangements and a National Apology. We have seen the introduction of child safe standards, improved education of staff, children and parents, improved complaint-handling and oversight processes and changes to some civil liability and criminal laws across the nation. But getting widespread genuine cultural change in institutions will take time. The more closed and less transparent the organisation is and the less the leadership is open to change, the longer and more difficult that road will be.
So whilst it is far too early to say the job is done, and it certainly isn’t, the early signs are positive. The hard truth, however, is that the safety of children will always be an issue requiring the greatest vigilance by every organisation involved with young people.
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