Newcastle's deputy lord mayor has defended his decision to remain on council chief executive Jeremy Bath's performance review panel after his partner was employed in the CEO's office last year.
Deputy lord mayor Declan Clausen was elected to sit on Mr Bath's performance review panel in February 2022 with fellow Labor councillors Nuatali Nelmes and Carol Duncan and Greens councillor John Mackenzie.
Cr Clausen's partner was appointed to a vacant permanent administrative role in the council's executive office in June 2023 before giving notice in September and leaving the role in December.
Cr Clausen declared a non-significant, non-pecuniary conflict of interest at a performance review panel meeting on December 21, 2023, due to his partner's former employment.
That meeting was the panel's first gathering to review the chief executive's performance in 2023.
The panel, working with an external facilitator, is preparing recommendations for the full council on Mr Bath's remuneration and performance targets for 2024.
Independent councillor John Church said the matter raised "serious questions".
"Were matters that were discussed in the CEO's office discussed around the kitchen table at home? We don't know," Cr Church said.
"Cr Clausen has been the first to criticise others about code-of-conduct issues. People in glass houses shouldn't throw stones."
City of Newcastle's executive director of corporate services and chief financial officer, David Clarke, said the panel had not met while Cr Clausen's partner worked for the council.
"The insinuation in the Newcastle Herald's enquiry that a former employee has some involvement or influence over the work of the CEO performance review panel is false and derogatory," he said.
"As they no longer work at City of Newcastle, any potential for perceptions of conflict of interest no longer exists."
Cr Clausen said he had proactively made appropriate formal disclosures to manage any potential perception of a conflict of interest before, during and after his partner's employment.
"My partner briefly worked at CN in 2023 after applying for a publicly advertised administration role caused by the resignation of a long-term staff member following an external promotion," he said.
"The role was consistent with his previous work as office manager for a NSW government minister. I did not have any involvement in this recruitment process."
Cr Clausen said he had fully complied with the law, council's code of conduct and his obligations as a councillor and the review panel had not met while his partner was a council employee.
"The CEO manages an organisation of more than 1300 individuals," he said.
"There is no connection between the CEO's performance, as determined against a detailed set of KPIs set by the full elected council in early 2023, and this one administrative role."
Cr Clausen said he also had acted in accordance with advice from Blackadder Associates, the external adviser engaged by the council to oversee the CEO performance review process.
"At the panel's January 2024 meeting, all panel members, including a non-Labor councillor, unanimously confirmed that they were comfortable with the disclosures I had repeatedly made, and the approach taken, and reiterated their agreement to my ongoing participation as a member of the panel," he said.
"I have not been notified of any complaints, nor any other concerns raised by any councillor, staff member or member of the public.
"Such accusations are serious. Any concerns should be properly lodged in accordance with the code of conduct."
The performance review panel also met in October 2022 to negotiate and finalise the terms of Mr Bath's new five-year contract to December 12, 2027, after the full council had voted earlier in the year to offer the chief executive a new deal.
Cr Church said he had not been made aware in an official capacity of Cr Clausen's conflict-of-interest declaration.
"It wouldn't be outside council's capacity to make this publicly known," he said.
"It's well below the most basic standard of good corporate governance."
Mr Clarke said personal connections did not "preclude someone from being employed by City of Newcastle provided this is appropriately disclosed in accordance with CN's Codes of Conduct, which are consistent with the Model Code of Conduct for Local Councils in NSW prescribed by the Office of Local Government".
"The panel is not a decision-making body and reports its recommendations to the full elected council," he said.
In its response to questions from the Herald, City of Newcastle provided comments from Stephen Blackadder, the independent facilitator of the performance review.
Mr Blackadder said he understood Cr Clausen had submitted the conflict of interest declaration "out of an abundance of caution".
"Panel members have noted the declaration, and in my view it should not have any bearing on the functioning of the panel," Mr Blackadder said.
Cr Duncan said the deputy lord mayor had been transparent about the potential perception of a conflict.
"It was discussed with the panel, and he has acted in accordance with the advice provided by the independent facilitator and City of Newcastle's governance staff," she said.
"No member of the panel expressed any concern."
The NSW Office of Local Government's Guidelines for the Appointment and Oversight of General Managers states governing bodies must establish a performance review panel led by the mayor, and delegate the task of undertaking the general manager's performance reviews to the panel.
The guidelines say performance review panels should comprise of the mayor, the deputy mayor, another councillor nominated by the council and a councillor nominated by the general manager.
Mr Clarke said Cr Clausen's partner had been appointed to a position in the executive office after a merit-based recruitment process.
"The role was publicly advertised in May 2023 with 22 applications being received and four applicants shortlisted for interview," he said.
"The interview panel did not include the CEO, lord mayor or any councillors.
"Following referee checks, the highest-ranked candidate was offered the role."
The council advised the Herald in September that the employee was due to finish in the role in October, but it said this week that this had been extended to December to allow for an appropriate handover period.
Cr Clausen's partner declined to comment.
