Governance and Management fails at the ABC
November 16th, 2018
The turmoil in mid-September 2018 at the ABC, one of the most publicly trusted organisations in Australia, has received huge publicity. Sacking of the Managing Director Michelle Guthrie followed only a few days later by the resignation of the Chair of the Board Justin Milne attracted both criticism and relief. Like the removal of Prime Minister Malcolm Turnbull only a few weeks earlier, the reasons for Guthrie’s removal remains unexplained.
What is clear is that there are serious doubts as to whether Guthrie was an appropriate person for the job. There are few doubts about Milne on the other hand. Like other members of the board he was appointed with little regard to the needs of the organisation by a process which sidestepped the protocols developed in previous times and the recommendations of a panel established as part of those.
Margaret Simons of Monash University in numerous media, Amanda Meade in The Guardian and Quentin Dempster (a former ABC staffer) in The New Daily have had important things to say about all this and Kerry O’Brien and Matt Peacock, both distinguished former ABC journalists, have also.
In an article a few weeks after the events of mid-September Simons expressed the view that the behavior of both Guthrie and Milne demonstrated a lack of maturity: “The ABC needs grown-ups in charge”. A Four Corners documentary in early November followed the events and interviewed both Guthrie and Milne. But we are no wiser as to the real reason for Guthrie’s departure though Milne’s argument, aired on the Four Corners program, that her leadership was unsatisfactory and a principal reason for her departure was based on gossip.
Two months after the turmoil, there is evidence that the legacy of Milne and Guthrie continues to have impact: a visit to the Ultimo studios by ACTU Secretary Sally McManus was closely monitored by the administration and readership targets are being set for one unit’s stories.
The ABC has suffered serious reductions in funding and there is a well-founded view that the organisation is unsustainable. More staff reductions will likely be required to add to the almost 1,000 who have already gone in the last several years since Prime Minister Abbott reneged on his promise to make no cuts to the broadcaster (or SBS). (There was a tiny increase in staff numbers in the last year.)
What is at the base of all this is a very serious, indeed critical, lack of process in organizational and leadership terms. Political interference based on no more than strong disagreement by government Ministers and Prime Ministers with some of the ABC’’s statements have had an impact even though they were not the subject of actual instructions. The role of the board is unclear to misunderstood, the importance of independence seems ignored, and the essentials of leadership not appreciated. Similar issues can be found in other organisations in business and government. And sport!
Milne sought the resignation of a senior journalist, Emma Alberici, economics correspondent and former presenter of Lateline on TV. She had written an article criticising the arguments advanced by the Government to justify substantial tax cuts for larger corporations. The government argued they would lead to more jobs and economic growth: Alberici wrote that they would not.
The Government’s position has been contradicted by economists including Nobel Prizewinner Joseph Stiglitz. In remarks at the presentation to him of the City of Sydney Peace Prize on November 15 2018 he referred to a study by economist Andrew Charlton which showed small cuts made in 2015 to small business (with turnover less than $2 million pa) mostly went to increase cash reserves though there was an increase in investment of 27%, a smaller increase in job numbers and a very small increase in wage rates). The general behavior of firms in paying dividends rather than investing has led to one commentator referring to their behavior as a Ponzi scheme. The evidence that firms do not devote the proceeds of tax cuts substantially to increasing wages, jobs or growth is substantial.
The question should be asked as to how the chair of the board of a public broadcaster can justify attacking media for reporting statements for which there is already substantial documented evidence. But of course that would be pointless!
The ABC is a public broadcaster and its funding is from taxpayers. The ABC is not an instrument of government policy like departments such as Home Affairs or Environment. The Government has failed to exercise its duty of care, especially in respect of independence and has contributed to a situation where the board lacks sufficient experience and knowledge and certainly is insufficiently diligent in its exercise of governance. It is more than regrettable that a board doesn’t even front up to defend staff of the organisation when they are unreasonably attacked!
Read more at ABC Turmoil: A crisis in governance and government.