Corporate governance

The Secretary and deputy secretaries oversaw all significant foreign, trade and investment, and development policy, as well as the department’s corporate management. The executive was also responsible for placements of senior executive staff. The deputy secretaries supported the Secretary through management of the department’s work units. Members of the executive represented the Government at meetings in Australia and overseas and chaired key corporate governance bodies.

Portfolio and whole-of-government coordination

The department worked closely with portfolio agencies—the Australian Secret Intelligence Service, the Australian Trade and Investment Commission, Tourism Australia, the Export Finance and Insurance Corporation and the Australian Centre for International Agricultural Research—to ensure a seamless and cohesive approach to implementing the Government’s agenda. The Secretary met regularly with portfolio counterparts at agency heads’ meetings to enhance high-level coordination on policy and corporate issues, including the Government’s economic diplomacy agenda.

The department’s leading coordination role across Australia’s overseas network is set out in the Prime Minister’s Directive: Guidelines for the Management of the Australian Government Presence Overseas. Working closely with other government agencies, the department helped achieve whole-of-government objectives, including hosting and participating in major international meetings, delivering a quality aid program and responding to consular crises.

The Secretary and members of the executive met counterparts from other government departments and agencies regularly to support cohesive responses to current and emerging foreign, trade and investment, and development policy matters, as well as shared management challenges.

 

Governance mechanisms

The department maintained a structure of management bodies and meetings designed to share information, provide robust corporate governance, convey priorities, and propagate strong and ethical organisational values.

The Departmental Executive (DE)—comprising the Secretary and deputy secretaries, and other senior officers—is the department’s primary formal governance body.

The DE met weekly, with a focus on strategic resource management and priorities, including the budget and other cross-cutting policy matters. A subset of the DE also reviewed the performance and priorities of overseas posts and departmental divisions under the
Post/Division Business Review process.

The following committees, chaired at deputy secretary-level, support the DE:

The Audit and Risk Committee provides independent assurance and advice on the department’s risk management and fraud control, internal control and compliance framework, and its external accountability responsibilities. It assists the department to comply with its obligations under legislation by recommending improvements to management systems, key business processes, corporate governance and financial and performance reporting.

The committee has three departmental members and four independent external members. Other designated departmental officers and representatives from the Australian National Audit Office (ANAO) attend meetings as observers. The committee met six times during 2015–16.

Comprising members drawn from across functional areas, the Ethics Committee met four times during 2015–16 to promote high standards of ethical behaviour and oversee the department’s conduct and ethics policies and procedures, including investigations. The committee considered departmental policies on child protection, anti-bullying and harassment, outside employment and post separation employment.

The Workplace Relations Committee, with its elected staff representatives and union and management representatives, is the department’s principal forum for consulting and informing staff and exchanging views on the workplace. The committee met six times, including to consider the new enterprise agreement, the Functional and Efficiency Review, postings and promotions, flexible work arrangements and the new performance management framework.

The Indigenous Taskforce is a standing forum which sets the department’s strategic vision and provides high-level oversight for Indigenous issues. It met three times and oversaw the delivery of the department’s Reconciliation Action Plan and the Indigenous Peoples Strategy. It also reviewed issues relevant to the recruitment, career development and retention of Aboriginal and/or Torres Strait Islander employees and provided a forum for the Indigenous Employees Network to canvass issues with members of the DE.

The Aid Investment Committee met seven times in the reporting period, providing oversight of Australia’s aid investment portfolio and giving strategic guidance on Aid Investment Plans for major country and regional programs. The committee assessed high-risk and/or high-value investment proposals for alignment with government policy, development impact and value for money.

The Development Policy Committee met seven times in the reporting period, providing strategic vision, policy consistency and guidance on development policy issues across the aid program, and promoting alignment with Australian foreign, trade and investment policies. The committee considered new and emerging international development policy issues (including the 2030 Agenda for Sustainable Development) and sector strategies (such as the Gender Equality and Women’s Empowerment Strategy).

The ICT Steering Committee is the department’s governance body for information and communications technology matters. In partnership with the department’s business areas, the committee sets the strategic direction for ICT and oversees its effective management and operation. The committee met four times to consider business requests for ICT resources, determine ICT investment priorities, review the business technology strategy and monitor the performance of high-risk projects.

The Departmental Security Committee was established in October 2015 following a review of diplomatic security. The committee, which includes representation from a range of divisions with security interests, is the department’s governance body for security matters. It sets the strategic direction for the department’s security responsibilities for staff, property and information, and oversees their effective management and operation. The committee met three times in the reporting period.

The Trade and Investment Policy Committee was established in May to provide consistent strategic-level oversight of the trade and investment policy and negotiations agenda, and to promote policy consistency and coherence. An important focus of the committee’s work is promoting an integrated approach to bilateral trade and investment relationships, spanning negotiations, compliance, implementation, facilitation and promotion. Its agenda also includes domestic economic and related policies with trade, investment and/or competitiveness dimensions.

Regular planning and evaluation took place across the department to ensure efficient and effective allocation of resources to support the Government’s foreign, trade and investment, and development policy objectives.

In accordance with the PGPA Act, the department published its Corporate Plan 2015–2019 and developed the first Annual Performance Statement for inclusion in this Annual Report. The Foreign Affairs and Trade Portfolio Budget Statements 2015–16 outlined the department’s performance expectations and planned use of resources.

The executive conducted rolling reviews of the performance of divisions, posts and state and territory offices against their individual business plans. These business plans report against the priorities in the department’s Corporate Plan and Values Statement. In 2015–16, the executive conducted 30 Division Business Reviews and 49 Post Business Reviews.

As part of the review process, we sought feedback from more than 30 Commonwealth government agencies and key stakeholders. This feedback helped identify opportunities for further or improved collaboration between the department, government agencies and other stakeholders in support of whole-of-government objectives.

The Office of Development Effectiveness (ODE) is an operationally independent unit of the department which monitors and assesses the effectiveness of the aid program and the quality of the department’s performance reporting. The work of ODE is overseen by the Independent Evaluation Committee (IEC).

In 2015–16, ODE published seven evaluations of the department’s development programs:

• Banking our aid: Australia’s non-core funding to the Asian Development Bank and World Bank
• Evaluation of the Australian NGO Cooperation Program
• Gearing up for trade: Australia’s support for trade facilitation programs
• Investing in teachers
• Evaluation of the contribution of Australia Award Scholarships to women’s leadership
• Mid-term review of empowering Indonesian women for poverty reduction (MAMPU): Verification of the performance story and forward plan
• 2015 Quality review of aid program performance reports.

ODE also quality assured the robustness of the department’s development performance reporting, drawing upon its annual spot check of performance ratings assigned by aid managers to individual investments and a quality review of aid program performance reports. The ODE assessment of DFAT’s Performance of Australian Aid report was endorsed by the IEC and published as an annex to that report.

ODE’s work plan for 2016 and 2017 was endorsed by the IEC and approved by the Secretary. Evaluation topics were selected on the basis of policy relevance, materiality, potential for learning, and risks to aid effectiveness.

The department’s Conduct and Ethics Unit (CEU) provides an ethical advisory service and investigates allegations of fraud and misconduct against staff, including locally engaged staff (LES) overseas. We investigated 39 allegations—nine were substantiated and disciplinary action taken. The department dismissed four officers and, in two of those cases, matters were referred to the Commonwealth Director of Public Prosecutions. We terminated the engagement of three contractors, demoted one officer and formally reprimanded another.

The CEU upholds and promotes the APS Values and Employment Principles through e-learning training modules, face-to-face training, and pre-posting conduct and ethics briefings for heads of mission, deputy heads of mission and senior administrative officers.

The department supports staff to report wrongdoing in the APS, in keeping with the Public Interest Disclosure Act 2013 (PID). The department’s PID policy is available on the department’s intranet and external website, and the department provides an e-learning course for staff.

The department is committed to reducing the risk and incidence of fraud and corruption across its operations both within Australia and overseas. Our Fraud Control and Anti-Corruption Plan stresses zero tolerance for dishonest or fraudulent behaviour by employees, clients, contractors and recipients of Australian aid program funds. The zero-tolerance approach represents a set of principles and actions that are applied to prevent, detect, investigate and respond to fraud and which comply with the Commonwealth Fraud Control Framework.

The department safeguards Australian funds against the risk of fraud and corruption, including by training our staff and partners, effective design and monitoring of aid investments, and supporting partner governments and other institutions in their efforts to combat fraud and corruption. In 2015–16, we delivered training to 1,185 department, partner government, multilateral, contractor and NGO staff in Canberra and overseas.

The department continued to promote a culture of positive engagement with risk through the application of the DFAT Guide to Better Risk Management. The guide articulates the principles that govern risk management, explains roles and responsibilities and provides step-by-step instructions on how to assess and manage risk. It encourages officers to engage with risk in a positive and transparent way to facilitate innovation and improve policy development and service delivery.

All divisions, posts and state and territory offices maintain risk registers and record key risks in their individual business plans. Risk registers were reviewed by the executive as part of the Division/Post Business Review process. We also used the risk registers to generate a Critical Risk List for consideration by the Audit and Risk Committee and the executive.

The department continued to strengthen its business continuity planning to ensure the availability of essential business services during and after a major disruption to key organisational capabilities. In December 2015, the department held a desktop exercise to test and validate its Business Continuity Plan (BCP). The exercise concentrated on the first 24–48 hours of a major business disruption and tested after-hours emergency management, the maintenance of core functions, and the restoration of business-as-usual services. The exercise confirmed that the BCP enables effective management of a major disruption to Canberra-based operations.

In 2016, the department used the lessons learned from the exercise to further strengthen its BCP. The department will hold annual business continuity exercises to re-validate and continually improve business continuity planning.

As part of the department’s business continuity framework, all posts and state and territory offices maintain individual business continuity plans, which are exercised and reviewed at least annually to ensure their effectiveness and currency.

The department’s Internal Audit Branch, under the direction of the Chief Auditor, focuses on improving the quality, accountability, efficiency and effectiveness of the functions and processes used to develop and implement foreign, trade and investment, and development policy.

The internal audit program is designed to provide assurance that critical policies and procedures are complied with and identify areas for improvement in administrative and program functions and processes. The program is delivered using a combination of internal resources and external providers.