Commonwealth of Australia Explanatory Memoranda

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AUSTRALIAN BROADCASTING CORPORATION AMENDMENT BILL 2006

                        2004-2005-2006


THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA


                            SENATE




     AUSTRALIAN BROADCASTING CORPORATION
              AMENDMENT BILL 2006


             EXPLANATORY MEMORANDUM




    (Circulated by authority of Senator the Hon. Helen Coonan,
Minister for Communications, Information Technology and the Arts)
               AUSTRALIAN BROADCASTING CORPORATION
                        AMENDMENT BILL 2006

                                      OUTLINE

The Australian Broadcasting Corporation Amendment Bill 2006 (the Bill) amends the
Australian Broadcasting Corporation Act 1983 (the ABC Act) to abolish the staff-
elected Director and deputy staff-elected Director positions.

The Bill addresses an ongoing tension relating to the position of staff-elected
Director. A potential conflict exists between the duties of the staff-elected Director
under paragraph 23(1)(a) of the Commonwealth Authorities and Companies Act 1997
to act in good faith in the best interests of the ABC, and the appointment of that
Director via election by ABC staff. The election method creates a risk that a staff-
elected Director will be expected by the constituents who elect him or her to place the
interests of staff ahead of the interests of the ABC as a whole where they are in
conflict.

The difficulties associated with such a position were recognised in the June 2003
`Review of the Corporate Governance of Statutory Authorities and Office Holders' (the
Uhrig Review) at pages 98 and 99. That Review concluded: `The Review does not
support representational appointments to governing boards as representational
appointments can fail to produce independent and objective views. There is the
potential for these appointments to be primarily concerned with the interests of those
they represent, rather than the success of the entity they are responsible for governing.'

The Bill resolves these issues by abolishing the staff-elected Director position.


                       FINANCIAL IMPACT STATEMENT

The Bill is not expected to have a significant financial impact on Commonwealth
expenditure or revenue.
                                           2


                               NOTES ON CLAUSES

Clause 1 - Short title

Clause 1 provides for the citation of the Australian Broadcasting Corporation
Amendment Act 2006 (the Act).

Clause 2 - Commencement

Clause 2 of the Bill provides that the Act commences on the later of:

(a)    15 June 2006 (the end of the term of office of the current staff-elected
       Director); and

(b)    the day after Royal Assent.

Clause 3 - Schedule(s)

Clause 3 gives formal effect to the amendments and other items set out in Schedule 1.
                                             3


                                 Schedule 1 - Amendments


Australian Broadcasting Corporation Act 1983


ITEMS 1 - 2 (Subsection 12(1))

Subsection 12(1) of the ABC Act provides that the ABC Board consists of:

(a)       a Managing Director;

(b)       a staff-elected Director; and

(c)       not less than 5 nor more than 7 other Directors.

Items 1 - 2 remove provision for a staff-elected Director on the ABC Board.


ITEM 3 (Subsection 12(4))

Subsection 12(4) validates acts of the Board during certain periods where board
vacancies exist, including:

      ·   a vacancy in the staff-elected Director position; and

      ·   a 6 month period where the number of directors referred to in paragraph
          12(1)(c) falls below 5.

Item 3 removes reference to the position of the staff-elected Director.


ITEM 4 (Subsection 12(4A))

Subsection 12(4A) validates actions of the Board while it includes a staff-elected
Director or deputy staff-elected Director whose election is invalidated by a defect or
irregularity.

Item 4 repeals the subsection.


ITEM 5 (Sections 13A and 13B)

Sections 13A and 13B prescribe details about the offices of staff-elected Director and
deputy staff-elected Director.

Item 5 provides that sections 13A and 13B are repealed.


ITEM 6 (Subsection 17(1A))
                                            4




Subsection 17(1A) deals with the requirement of the Commonwealth Authorities and
Companies Act 1997 for the disclosure of interests by the staff-elected Director. This
subsection is rendered redundant by the abolition of the position of staff-elected
Director.

Item 6 provides for the repeal of the subsection.


ITEM 7 (Subparagraph 18(2)(a)(ii))

Item 7 is a technical amendment consequent upon the repeal of paragraph 18(2)(aa)
by Item 8.


ITEM 8 (Paragraph 18(2)(aa))

Paragraph 18(2)(aa) sets out circumstances in which a staff-elected Director may be
removed. This paragraph is rendered redundant by the abolition of the position of
staff-elected Director.

Item 8 provides for the repeal of the paragraph.


ITEM 9 (Subsection 18(3))

Subsection 18(3) deals with circumstances under which a staff-elected Director may
be removed from office. This subsection is rendered redundant by the abolition of the
position of staff-elected Director.

Item 9 provides for the repeal of the subsection.


ITEM 10 (Subsection 21(7))

Section 21 deals with acting Directors, and subsection 21(7) provides that it does not
apply to staff-elected Directors. This subsection is rendered redundant by the
abolition of the position of staff-elected Director.

Item 10 provides for the repeal of the subsection.


ITEM 11 (Cessation of staff-elected Director and deputy)

Item 11 is intended to avoid any doubt about the effect of the abolition of the offices
of staff-elected Director and deputy staff-elected Director. It provides that if there is a
person holding either of those offices when items 2 and 5 commence, that person
ceases to hold the office on commencement of the relevant item.