Corporate governance and procurement among concerns for Racing Commission of Inquiry

Corporate governance, directors’ duties, procurement processes and contract management were among many of the matters considered in the Queensland Racing Commission of Inquiry. The Inquiry's findings were presented to the Premier on 7 February 2014.

The State Government had announced in May 2013 that it would establish an inquiry into Racing Queensland and a Commission was subsequently appointed with the Honourable Margaret White AO as Commissioner. The Commission was required to conduct an inquiry into the operations of the former racing control bodies in Queensland, being Racing Queensland Limited (RQL) and its predecessors, over the period from 1 July 2007 to 30 April 2012.

The Commission considered extensive terms of reference relating to the racing industry in Queensland, including the operation and management of the racing control bodies and the level of their oversight by government.

Many of the recommendations of the Commission do not affect government directly as they concern the actions of companies limited by guarantee. However, they are a timely reminder about some basics that are required for good corporate governance of any organisation. These basics relate to the following:

  • having procurement, financial and human resources policies is only one half of the equation -- staff need to be aware of the policies and be able to apply them, and there needs to be a culture in the organisation where compliance is required
  • if you engage a contractor to carry out procurement for you, you will not be able to measure if you are getting value for money if the contractor does not follow a structured procurement process
  • if your role requires you to be a director of a company, then you must be familiar with the duties that come with that position, especially the duty to act in the best interests of the company
  • if a contract dispute arises, getting legal advice that you are confident you can rely on is an important first step in dealing appropriately with the dispute
  • if you are making significant payments in the run-up to the caretaker period, make sure that the reasons for the need to make the payments are carefully documented
  • understanding when a conflict of interest arises and how to manage it will lead to better decision-making.

Of particular interest to government is the recommendation of the Commission about the future regulation of the racing industry. The report contains an interesting discussion in chapter 6 about how the separation of regulatory and policy-making functions can lead to more independent and rigorous regulation.

Crown Law represented the interests of the State of Queensland at the Inquiry.

The information in this publication is provided for general purposes only. It is not to be relied on as a substitute for legal advice. Crown Law and the Department of Justice and Attorney-General accept no liability for losses caused by reliance on the material in this publication. Formal legal advice should be obtained for particular matters.

Published: 5 February 2014

Author: Melinda Pugh and David French