Leadership lessons from the Balranald public inquiry

Taking time to read the lengthy inquiry report, it is clear that a decision to dismiss an elected council and appoint an administrator is never done lightly. And it is not something that happens out of the blue. In the case of Balranald, there was a considerable history of complaints and issues raised with the Office of Local Government (OLG) going back seven years. During this time, there were multiple matters investigated or referred to the OLG for action. This ultimately culminated in the inquiry and then the decision by the Minister.

The initial enquiries into Balranald Shire Council centred on its financial sustainability and in particular, its asset management. Whilst this was a primary focus of OLG enquiries, the financial performance of Council turned out to be a symptom of deeper cultural issues within the organisation. For example, lack of respect towards staff, poor morale, reluctance to make tough decisions, unclear strategic direction and inadequate communication with the community. These were all contributing factors which impacted upon the effective governance of Council and, ultimately its financial position.

During the interventions by the OLG, it was noted that there was a lack of focus by the elected Council on setting the strategic direction. There was also a lack of understanding that councillors have a strategic, rather than operational, role. This confusion was evident on two levels – both in several Council decisions and then separately in the actions of specific councillors. This caused several issues including ongoing conflict with Council staff and difficulties in the implementation of Council decisions.

The lesson is that councillors should focus on their strategic role and setting the direction of Council. The operational matters should be left to the General Manager and Council staff. Councillors must also accept this fact and leave it to the General Manager to implement decisions.

The inquiry report observed the tendency of the elected Council to make “knee-jerk” decisions and flip flop on decision making. Overall, the Council did not demonstrate strong and effective leadership when considering contentious issues, contrary to the guiding principles in the Local Government Act 1993. There was also a tendency of councillors to “attempt to sheet home the responsibility to staff”. There was a cost to this reactive decision making and indecision – a high turn over of staff and low staff morale and a loss of community confidence.

Under the Local Government Act 1993, councillors must be ‘active and contributing’ members of the governing body. In the case of Balranald Shire Council, some councillors were not active contributors to the debate in the Chamber, with a small minority dominating the meetings. A lack of inclusiveness and robustness in the debate can lead to poor outcomes and can reduce the legitimacy of the decision.

The report highlighted that some of the issues at Baranald Shire Council could be attributed to the conduct of certain individual councillors. In the case of interactions with Council staff, one councillor was the key contributor, with other councillors powerless to prevent this behaviour. On some isolated occasions, the inquiry noted that one or two other councillors encouraged this poor behaviour. In this sense, it was a minority of councillors doing the wrong thing that undid the whole council.

The report found that the Council tended to close meetings when difficult matters were under consideration and often without proper grounds under the Local Government Act 1993. Sixteen Council meetings were examined in the report, all of which were closed to the public without proper grounds. The report highlighted that all councillors and the Mayor must understand what constitutes proper grounds to close a meeting and correctly apply the requirements of the Act and the Code of Meeting Practice. Council staff also need to properly understand the reasons when a meeting can legitimately be closed for confidential reasons.

The inquiry noted that over the past seven years, there had been four General Managers at the Council. All of which were impacted in some way by the events that transpired – often in a deeply personal way. Many staff were also directly and personally impacted by the events at the Council.

The ongoing dysfunction of the elected council had significant impacts on everyone involved including senior management. One General Manager noted that “it was one the most stressful periods of his life” working in that environment. Another stated that his mental health was suffering due to the situation.

Finally, the inquiry recognised that Council did not adequately consult or communicate with its community. As noted earlier, it also had a culture of closing meetings to the public when making difficult decisions. This lack of transparency and availability of information resulted in an estranged community that ultimately lost confidence in the Council.