Failures of governance are almost always intertwined with poor culture and both tend to have deep roots.

Tasmania's Premier Jeremy Rockliff is, and has been often referred to as, 'a good bloke' and at a personal level he is. However, this state needs more than a 'good bloke' leading our state and governing for all Tasmanians.

Government businesses are under the Premier's ultimate responsibility, along with the shareholder ministers including the Treasurer. The Premier and his shareholder ministers have, over the past 10 years, presided over such a consistent deterioration in the state's corporate governance standards to the point whereby the debacle of the new Spirits, the greatest governance failure in the state's history, became inevitable.

I disagree with Minister Jo Palmer who, when tasked with responding to an area outside her portfolio, was quoted as stating the government was not interested in looking back on the history of the project. Minister Palmer may be right we don't need to contain our focus to just this area of failure. However, this state simply does not have the economic engine to endure repeated mistakes of the size of the Spirits saga. The ferries fiasco isn't a lone data point, a small blip on an otherwise unblemished governance record, rather it forms part of a consistent downward trend in governance standards reflected by a "no interest of looking back" approach.

Perhaps at no other stage in our lifetimes has the state government committed to so many large intergenerational infrastructure projects where the consequences reach far beyond the current election cycle. Large commitments bring large responsibilities with heightened obligations to ensure governance standards are optimised to avoid a repetition of this mess.

Sadly, overserving this failure is a bit like watching an episode of Grand Designs. Not surprisingly, by Christmas the budget is blown, a new builder engaged, credit cards are maxed out, everyone has fallen out and divorce is imminent. Sitting in a borrowed caravan, rain stops progress and the couple are left bewildered and confused as to the cause of the calamity as their umpteenth deadline whooshes by.

The construction of Berth 3, at the Devonport Port, follows the same plot but, as yet, no one is living in a caravan.

While the couple can be forgiven for ambition overriding competence, the same can't be said for government boards and ministers. These boards have failed the government business itself, the owners of the business and the state.

Every Tasmanian as owners of these GBEs has a right to be angry, frustrated and deeply disappointed.

If we are to learn from this and prevent future failures we must understand the underlying factors.

The failure of both boards and the minister to take any action proportionate to the quantum of the crisis until well after the commencement of the PAC Inquiry is staggering when you consider the number of directors, department employees and ministers involved that knew, or ought to have known.

This isn't a slight oversight by a junior staffer during a short caretaker period, this is systemic collective failure of many directors and a minister asleep at the wheel for almost three years.

Debacles such as these are not the problem in and of themselves but rather are symptoms of a deeper cultural dysfunction. Failures of governance are almost always intertwined with poor culture and both tend to have deep roots.

At the Legislative Council Short Inquiry into TasPorts, the chair and chief executive took an adversarial approach to members seeking information relevant to the assets we own and the people we represent.

This is unprofessional and reflective of a poor culture.

These problems with culture are not new. In 2019, the TasPorts chief executive was questioned in the media about the poor culture and high management turnover. The frequent turnover of senior staff at TasPorts should and was ringing alarm bells. For an organisation that has a monopoly over its services, culture rather than revenue should have been its priority.

Yet, in the inquiry it was disclosed that some of the employee surveys have not been completed for some time. For an organisation with an average retention rate of about four years, it emerges that the average employee has not completed a survey.

The absence of surveys suggests a board with an indifference to shifting the needle on culture and is consistent with an ongoing trend in senior management turnover. These cultural problems have a knock-on effect for governance. The lack of a permanent chief financial officer exposes the company to unnecessary risk. The absence of such a role allows the chairman acting in a manner that demonstrates micromanaging or acting more akin to an executive director to go by unchallenged. When coupled with a close relationship with the chief executive, this threatens to subordinate the remainder of the board and as chair of the audit and remuneration committees, can pose a serious conflict of interest.

A retrospective look at these governance matters is crucial if we are to fully understand this mess.

On the government side related to TT-Line, the failure to have two individual ministers as shareholder ministers, creating a lack of critical analysis and accountability, represents another failure of governance.

It's apparent that having the unwavering self-belief of two ministers is not sufficient to offset the critical scrutiny of none.

Central to board culture is the ability to evaluate and estimate risk in an accurate manner. Common behaviours or biases appear to have emerged as this crisis became apparent that appear to have the boards and minister thinking that all is well and that the situation is under control when it simply isn't.

We need the government and our government businesses to work for the benefit of Tasmania. Many of the controls put in place to ensure good governance have been stretched, broken or circumvented. Where we see a concentration of objectives pushed too far towards shareholder return away from acting in the interests of Tasmania. This can apply to our state-owned energy companies as well. If it shifts too far, the purpose can be lost.

Is our Premier, 'the good bloke' up to the task? He doesn't have much time to prove he is.

The Mercury, Wednesday 30 October 2024