Holgate affair represents a serious failure of governance

ISSUES: This week's inquiry gave Christine Holgate the platform to share how poorly she was treated. Picture: Karleen Minney

ISSUES: This week's inquiry gave Christine Holgate the platform to share how poorly she was treated. Picture: Karleen Minney

The Holgate affair is better thought of as a massive failure of governance - and should be be fixed accordingly.

Scott Morrison has made it a matter of politics, deliberately making it personal against Christine Holgate, and dumbing it down by using the ad man's speak of the abuse of "taxpayers' money", seeking to create the impression that he is concerned with waste and accountability.

His initial response in October was knee-jerk, confused but scathing of Holgate: "I was appalled and it is disgraceful and it's not on ... if the chief executive wished to stand aside, if she doesn't wish to do that, she can go."

Morrison had obviously been caught short by the revelations in Senate estimates concerning the Cartier watches - he "decided that there had to be an independent investigation done by the department, not by Australia Post, and that the chief executive should stand aside immediately ... if there are issues to be addressed with board members then they will be addressed then."

The longer the issue has run, the more political Morrison has made it.

And the more evident has been his hypocrisy, given his government's largesse, avoiding where possible accountability and responsibility.

The governance structure is that Australia Post is a government-owned enterprise - the Australian people are the shareholders.

The board, and its chair, are appointed by the government, to set the company strategy, to appoint the CEO to deliver that strategy, and to hold the CEO and management accountable in that respect.

As a provider of an essential service, Australia Post must take account of broader stakeholder interests, including the small businesses on which they rely.

The bonuses given by Holgate were for a large financial deal by which post offices could provide financial services.

Why didn't Morrison initially speak directly to the chair, to determine the bonus policy and Holgate's responsibilities and authorities in that respect?

As the subsequent review found, Holgate had done nothing wrong - having acted consistent with board policies and authorities.

Clearly, if the bonuses had just been paid in cash, even in much greater amounts, and not watches, the issue would not have attracted any attention.

But Morrison's judgment was blinded by the brilliance of those watches - and the opportunity to score some cheap political points - so he rushed into the Parliament and lost it.

The issue might otherwise have faded, but the Senate inquiry this week gave Holgate the platform to demonstrate just how poorly she had been treated, and exposed the weaknesses and complicity of the chairman and the minister as they sought to shift responsibility and duck accountability.

Holgate was given no alternative but to resign by "the men in suits" - who displayed clear gender bias, if not misogyny.

The chair, ignoring his role in her treatment and his failure to support her, thought she had been treated "abysmally", but insisted that the board does not owe her an apology - he said she was a highly effective chief executive who had made an "error of judgement".

He claimed that Holgate had agreed to stand aside during an investigation, a claim Holgate contests and accuses him of fabricating his evidence.

In what was obviously a deliberate attempt to add more hurt to Holgate's injury, the board announced a replacement CEO the day before she was to appear before the Senate committee.

The minister, similarly ignoring his sins of omission and commission, has denied Holgate's testimony that she was dismissed from her role by the government.

To date, the chair has refused to resign, claiming it would further hinder the organisation going forward.

And, of course, Morrison has refused to apologise to Holgate - the barricades are up.

It is a key feature of corporate governance and responsibility to recognise that a fish rots from the head - it is the board that should take ultimate responsibility for the company's activities and performance.

There is no detail as to whether Morrison rang the chair when the story broke.

However, an effective chair would already have exercised their authority to hold the CEO accountable.

Clearly, she had no case to answer, but the weak chair buckled because Morrison wanted her gone.

In governance terms, Morrison should apologise, Holgate should be reinstated, the chair removed and the board restructured.

John Hewson is a professor at the Crawford School of Public Policy, ANU, and a former Liberal opposition leader.

This story Hewson's View | Holgate affair represents a serious failure of governance first appeared on The Canberra Times.