The Queensland government's recruitment processes for state-owned corporations have come under scrutiny by the Queensland Audit Office, with a report finding positions should be advertised publicly to improve transparency and that no data is collected on the diversity of board members.
In its latest report, the Queensland Audit Office examined how four state government departments — which were responsible for the largest government boards — appointed and renewed members.
The review included Queensland Health; the Department of Employment, Small business and Training; the Department of Regional Development, Manufacturing and Water; and Queensland Treasury.
These are responsible for overseeing 50 large state entities — with combined assets of $228 billion — that deliver energy, health, ports, water and rail services across Queensland.
Queensland Auditor-General Brendan Worrall made six recommendations to improve processes, including that the Department of the Premier and Cabinet (DPC) update its guidelines for departments who managed recruitment for boards of those entities.
"These guidelines are 12 years old and do not provide strong guidance to departments on the benefits of a regular, formalised skills-gap analysis, of advertising positions openly, or on the importance of appointing people quickly," Mr Worrall wrote in his report.
He also recommended that the DPC collect information on the diversity of board members and report, publicly, on how boards reflected the broader community.
"The government set a target in 2015 to achieve gender balance on most government boards," he said.
"In 2021, the proportion of women on most boards was 53.7 per cent.
"While the Department of the Premier and Cabinet collects data and reports on the proportion of women on government boards and bodies, it does not collect it on other aspects of diversity.
"For example, it does not know how many Aboriginal and Torres Strait Islander people, [or] people from culturally and linguistically diverse backgrounds, or people with disability, are on the boards."
Mr Worrall reported that the audit office had found that, while the state government departments completed suitability checks of such things as potential conflicts of interest, criminal history , bankruptcy and disqualified directors' databases — only one checked academic qualifications.
"The Department of Health is the only department that has been checking academic qualifications," he said.
It also revealed less than half — 47.2 per cent — of the current board members of large entities reported they had attained a higher education qualification.
It also found that only a little more than one-third of members — 36.3 per cent — reported they had completed specific courses focused on board governance, such as a director's course.
Improved transparency needed for position advertising
The report was also critical of Queensland Treasury for not publicly advertising board vacancies, but noted there was no legal requirement for it to do so.
"This narrows the field of applicants — it can give the impression that appointees are not independent and it is not in line with better practice, as advised by the Australian Institute of Company Directors and others," Mr Worrall said in the report.
"Queensland Treasury has not developed selection criteria, formed selection panels, or advertised vacancies to fill board positions for government-owned corporations.
"It has used Queensland Register of Nominees (QRON), internal networks and recommendations from chairs or the minister, to search for suitable candidates
"A lack of openness about how government identifies and appoints board members can create a perception that it is making appointments for reasons other than securing highly qualified, experienced and diverse candidates."
Electricity, transport, water and financial entities — such as Stanwell, CS Energy, CleanCo, the Gladstone Ports Corporation, the Port of Townsville, North Queensland Bulk Port, Sunwater, Queensland Treasury Corporation and Trade and Investment Queensland — are examples of corporations with boards that have the state's Treasurer as a shareholding minister.
Queensland Treasury committed to improving processes
In a response to the report, director-general Rachel Hunter said the Department of Premier and Cabinet was supportive of the recommendations.
The department had committed to collecting and reporting diversity data, and said it would further review the guidelines for government boards, committees and statutory authorities.
Under-Treasurer Leon Allen said Queensland Treasury was committed to continuous improvement regarding board appointment processes.
"In relation to the report's recommendation to more openly advertise, Treasury does advertise but will move to broaden its current advertising of vacancies via the Queensland Register of Nominees (QRON) platform, by notifying industry bodies such as the Australian Institute of Company Directors," he said.
"We do not agree that the considered lack of advertising and engagement with chairs has led to a perception that members are not independent, or that boards do not have the diverse skills needed.
Report a 'damning indictment', Opposition says
Opposition integrity spokeswoman Fiona Simpson said the report's findings were a "damning indictment" of the Palaszczuk government.
"The Auditor-General report paints a picture of a government completely disinterested in the guidance boards should provide to deliver essential services," Ms Simpson said.
"[This] report proves the Palaszczuk government is losing control of the basics of good governance and is failing to deliver essential services for Queenslanders.
"If advice isn't coming from their mates, they're not interested."
