Understanding corporate governance in the Australian public sector: a social capital approach

Abstract

Purpose - The purpose of this paper is to identify factors that affect corporate governance in Australian state government departments. Design/methodology/approach - A qualitative analysis of semi-structured interviews with 65 executives and middle managers from 25 departments across Australia is used. The interviews identified managers' perceptions of the structures and practices of governance in four nominated areas: strategic planning, auditing, risk management and capacity building. A social capital model is utilised to analyse the data along structural, relational and cognitive dimensions. Findings - Aligned with the structural dimension, frequent departmental and leadership changes and the size and complexity of departments are reported as major barriers to good governance, while well-structured committees are perceived to strengthen governance. Aligned with the relational dimension, a culture of good working relationships between staff and strong leadership are recognised as critical for strong governance while, aligned with the cognitive dimension, a lack of shared understanding of risk, a short-term focus, and unclear individual roles and organisational goals are seen as barriers to effective governance. Research limitations/implications - The evidence is based on perceptions of participants and may not reflect actual practices nor the perceptions of others. Originality/value - A contribution of this study is the application of social capital theory to advance understanding of public sector governance. The study adds insights into the behavioural and organisational factors that encourage or impede effective governance based on the experiences of managers from key governance functions.

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