As news trickles out that the NBN will be rolled out initially in regional areas and there will be large cross-subsidies from city users to regional users - all decisions made by government – it is interesting to ponder what role the board of the NBN plays. After all, these are the kinds of decisions one would expect to made by the board of a supposedly commerical entity (note rates of return falling as a result of government meddling).
According to the NBN’s website:
Role of the Board
Establishing and overseeing a sound corporate governance framework is a primary responsibility of the Board. The Board sets the strategic direction for the Company and its senior management guides the development of Company operations. The Board ensures the Company meets its accountability obligations to the Government by submitting Corporate Plans and Annual Reports, ensuring compliance with Government policies and overseeing the development and implementation of a robust risk management framework. NBN Co will submit its first Corporate Plan at the end of May 2010.
The Board comprises two executive directors including the Chief Executive Officer/Chair and six non-executive Directors appointed to provide a mix of skills and experience essential to guide NBN Co toward successful delivery of the National Broadband Network. The Board has delegated specific powers and responsibilities to Board committees including the Audit Committee and the People and Performance Committee.
What is difficult to fathom is if the Government is to make all the key decisions, why have a board at all? As Kevin Morgan so perceptively writes, in yet another excellent article in today’s Australian, NBN Co is really the equivalent of Postmaster-General’s Department, Mark 2.
These developments also beg the question as to appropriateness of having the NBN off-budget (you will recall various government ministers scolding companies for putting business entities off balance-sheet, and indeed this being part of the issue with the GFC and corporate collapses). I say bring the NBN in to Budget appropriations and then we can have a clearer view as to how much this folly is costing us.
