Probity and Ethics: Doing the Right Thing

October 3, 2023

Honesty, fairness, impartiality, transparency, and accountability are paramount principles to ensure the probity of process and robust decision-making. Government organisations and staff are trustees of the public interests and money; hence they should be the moral exemplar, held to the highest standards, and have a duty to uphold the values, act with transparency, and accountability, and achieve the best value for money.

Society’s ethical expectations are higher than ever, and doing the right thing is critical to building, maintaining, and fostering a healthy culture, trust, and reputation. It ensures robust and good decision-making, sustainable outcomes, and the best and most efficient allocation of resources.

In upholding integrity and probity, public employees must comply with their public duties whilst ensuring their personal and professional relationships and interests, including indirect interests such as those of their friends and family, do not present a conflict. In upholding integrity and probity, all parties, especially those in senior positions, must set the tone and base their decision on legislation, policies, and ethics.

Robust frameworks and education are paramount to ensure compliance with one’s obligations and ensure accountability of those who fail to observe their duties - intentionally or not. Communication and training are the starting point for providing stakeholders with a clear outline of their roles and responsibilities relating to conflict of interest, record management, transparency, supervision, and accountability.

Recent cases illustrate the consequences of failing to have, implement and or comply with framework and standards:

Sydney Metro

The use and management of some consulting services by Sydney Metro is currently under review by a Parliamentary Inquiry. Sydney Metro is under scrutiny for awarding contracts worth millions of dollars to companies whose Directors were also executives at the organisation. Questions about Sydney Metro mismanagement of conflict of interest have been raised during the inquiry:

Given that you had [employee] sitting within Sydney Metro for ... almost ten years and he is also the Managing Director of [advisory company], what steps did Metro take to make sure the information he was privy to at Sydney Metro was not then used to benefit [advisory company] Bellgrove Advisory in relation to these contracts?

What steps does Metro take to ensure the information obtained by these consultations or contractors sitting within Metro is not then taken and misused in order to benefit their company by getting more work
out of Metro?[1]”.

It is alleged that that consulting firms with links to Sydney Metro executives were awarded contracts estimated worth of $13 million.

NDIA and Synergy360

The procurement and use of consulting firms by Services Australia and the NDIA was referred to the National Anti-Corruption Commission (NACC) for investigation. The recommendation is based on allegations relating to improper relationships and undisclosed conflict of interest and financial misconduct.

A total of 19 contracts amounting to approximately $374 million are at the heart of the allegations of undisclosed conflict of interests by APS executives and suppliers, and inadequate record keeping.

The investigation noted that Mr Stuart Robert, former NDIA Minister, met several times with suppliers during the tender processes. There were no probity advisors or other public servants at those meetings, there were no notes or records of the discussions. The supplier paid significant funds to a consultancy company, in which the Minister and his friend allegedly would have pecuniary interests in and benefited from.

Both cases are recent and follow many others where staff in government agencies failed to comply with established the probity principles, commonly through mismanagement or nondisclosed conflict of interests. This has resulted in significant reputational damage and loss of public confidence.

failure to declare or properly manage any conflict of interest[2]; “undisclosed personal relationship[3]”; “inadequate responses to reported conflict of interests[4]”; “falsely declared that [they] had no actual, perceive of potential conflict of interest[5]; “failure to declare [their] interest in real property[6]”, “failure to make a number of pecuniary interests disclosure[7]”.

Same narrative, different characters - repeatedly. It raises the question: What is the root cause? Generally, the failure to have, maintain, and implement robust probity frameworks and poor organisational culture are at the centre of it. The fix?

How to Build and Enhance Your Organisation's Probity Posture

1. Probity Principles

Live and breathe probity:

Fairness and lack of bias

Transparency and accountability

Confidentiality and security

Value for money

Audit trail

Failure to adhere to probity principles erodes public trust.

2. Good Governance

Compliance with policies and procedures.

Having policies and procedures in place alone is not sufficient. They need to be applicable, relevant and current to the public organisation. Effectively communicating policies and procedures to all staff and ensuring their compliance is imperative.

3. Tone from the Top

An effective the tone from the up is key to ensuring healthy organisational culture. It leads compliance, sets the standard , serves as a moral example and reinforces that undesirable behaviours are unwelcome. It fosters a safe environment whereby people feel free to speak up. Leadership is paramount to ethical culture.

4. Probity Awareness

Government staff must be aware of their roles, responsibilities, and probity principles. They should live and breathe probity in their day-to-day roles. Probity awareness training is vital. Training and education should be continuous.

5. Probity by Design

A robust probity framework designed to meet the public sector organisation’ needs, appetite, and profile will enable the organisation to meet its objectives. Probity is an enabler: it supports the operations and decision-making processes. It produces robust and defensible outcomes. It enhances reputation and community trust levels.

6. Conflict of Interests

Most organisations have a conflict of interest policy in place, yet most policies fail to address full gamut of the risks most organisations face. A conflict of interest policy must have a fit for purpose definition of ‘conflict’, and assist with COI risk assessment and available management strategies. It should also provide that conflict of interests’ declarations should be current and revisited. See here for more information about how to enhance your Conflict of Interests Policies.

7. Confidentiality

Confidentiality of information, particularly in procurement, is crucial to ensure the fairness and equity of major procurement and grants processes. Confidentiality Deeds and policies are effective tools, particularly when managing conflict of interests.

8. Guidelines and Protocols

Guidelines and protocols should be available to provide staff and stakeholders with directions and instructions on how to exercise their role whilst ensuring compliance with the probity principles. These should be part of the probity framework and tailored to the organisation. Protocols and guidelines may cover topics like communication, negotiations, conflict of interest management and any other relevant area.

9. Record Keeping

Recording all activities and decisions made throughout the tendering of grant processes is crucial. Good record keeping is good governance. Communications, including emails and notes of oral conversations should be documented. Notes and minutes of meetings should be taken and kept. It ensures accountability, transparency and support a defensible outcome. It allows an effective audit trail.

10. Reporting Channels

Public sector organisations must have reporting internal channels available and encourage staff and stakeholders to report issues. There should be clear process for the reporting of suspected misconduct , including relevant protections as provided at law, e.g., whistleblower protections and the Public Interest Disclosure Act. See here for further information about Whistleblower disclosures.

Further Information?

If you would like to explore how Centium can help your organisation enhance its probity posture, please do reach out to Joan Cavalieri, Director Probity & Ethics on Email: joan.cavalieri@centium.com.au.


Footnotes:

[1] Public Accountability and Works Committee, NSW Government’s Use and Management of Consulting Services 5 September 2023 – 915am.

[2] ICAC – Operation Galley

[3] ICAC – Operation Keppel

[4] ICAC – Operation Keppel

[5] ICAC – Operation Ember

[6] ICAC – Operation Witney

[7] ICAC – Operation Witney

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