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Corporate Governance

Corporate governance provides the framework of authority, accountability, direction and control through which the Clean Energy Regulator sets objectives, monitors delivery and reports performance. It is designed to ensure that all officers understand their personal accountabilities as employees under the Public Service Act 1999 and, where applicable, as delegates of the Clean Energy Regulator.

The Clean Energy Regulator’s governance processes and policies include risk management, business planning, performance agreements, audit and assurance, fraud prevention and control, Chief Executive Directions and Chief Executive Instructions.

This framework supports the Clean Energy Regulator’s culture, which promotes and upholds the Australian Public Service values and Code of Conduct. It enables the Clean Energy Regulator to monitor and improve its performance and ensures compliance with relevant legislation.

Strategic and business planning

The Clean Energy Regulator’s business planning framework matured during 2012–13 with the development and publication of the Clean Energy Regulator 2012–15 Corporate Plan and the publication of the Clean Energy Regulator’s Statement of Intent, which was presented to the then Minister for Climate Change and Energy Efficiency on 10 December 2012. Both documents are available on the Clean Energy Regulator website.

These documents define the following strategic objectives:

  • ensure regulated entities are meeting their obligations, reporting correct information and receiving entitlements
  • protect the integrity of the instruments (units)
  • administer the schemes effectively
  • build confidence in the market and the Clean Energy Regulator
  • provide data and information to assist decision makers.

Under section 39 of the Clean Energy Regulator Act 2011, the Clean Energy Regulator is required to prepare a corporate plan spanning three years. The plan is integrated with the business planning framework and provides context and guidance to the Agency by referring to the major legislative milestones and deliverables that shape its priorities.

The business planning framework is also integrated with the risk management framework, the internal resource allocation process, and individual and organisation performance measurement and reporting.

At the start of 2012–13, the Clean Energy Regulator implemented operational performance reporting to measure and review its performance and to assist executive decision-making. The Clean Energy Regulator uses business performance measures to evaluate its progress in achieving objectives and priorities. Performance reporting is focused on the achievement of legislated milestones, organisational priorities and resource usage, and the administration of regulatory schemes. The performance report has been further developed to be modular and flexible, to reflect the different phases in the life cycle of each of the schemes and to identify trends and provide comparisons across reporting periods.

Committees

The Clean Energy Regulator’s committee structure provides leadership and oversight of the Agency’s operations and performance.

Executive Board

The Executive Board comprises the Chief Executive Officer (Chair), the General Counsel, and all executive general managers. It is responsible for planning, reviewing and approving papers that will be referred to the Regulator for information and decision-making.

The Executive Board meets before each Regulator meeting.

Senior Leadership Team

The Senior Leadership Team has the same membership as the Executive Board. However, the mandate and scope of the two committees differ. The Senior Leadership Team gives effect to the strategic direction of the Agency through policy setting and allocation of resources. It makes decisions on the day-to-day business of the Clean Energy Regulator on issues relating to finance, people and operations management.

The Senior Leadership Team meets at least fortnightly.

Extended Leadership Team

The Extended Leadership Team consists of the Chief Executive Officer (Chair), the General Counsel, all executive general managers, and all general managers. The Extended Leadership Team enables divisions to share information and collaborate and focuses on the operational concerns of line managers.

The Extended Leadership Team meets fortnightly.

Audit Committee

The Audit Committee consists of an independent member (Chair), a Regulator member, and two senior executive officers. It provides independent assurance and assistance to the Chief Executive Officer on the Clean Energy Regulator’s risk, control and compliance framework, and its external accountability responsibilities under the Financial Management and Accountability Act 1997. The Audit Committee provides assurance on the preparation of the annual financial statements and oversights the internal audit work program.

The Audit Committee meets at least quarterly.

Procurement Review Committee

The Procurement Review Committee comprises the Manager Finance and Procurement Section (Chair), the General Counsel, and two senior executive officers. The committee ensures that major procurement activities are conducted in accordance with the Australian Government’s financial and procurement policies. It is responsible for reviewing the establishment of any standing offer, multi-use list and memorandum of understanding related to sourcing goods or services from an Australian Government department.

The Procurement Review Committee meets weekly.

Security Management Committee

The Security Management Committee consists of the Agency Security Executive (Chair), the Chief Information Security Officer, the General Manager Regulatory Strategy and Intelligence Branch, the Information Technology Security Advisor, the Agency Security Advisor, and the Assistant Agency Security Advisor.

The committee is a centralised source of strategic direction and advice on the Clean Energy Regulator’s protective security and information technology policies and practices. It is ensures that the Agency is compliant with relevant statutory obligations, including the Protective Security Policy Framework and the Australian Government Information Security Manual.

The Security Management Committee meets monthly.

Staff Consultative Committee

The Staff Consultative Committee consists of the Executive General Manager Corporate Services Division (Chair) and representatives from management, each division, the Community and Public Sector Union, and the Media, Entertainment and Arts Alliance. The committee provides a forum for consultation between senior managers and employee representatives on workplace issues, and allows the views of employees to be taken into account in the decision-making process.

The Staff Consultative Committee meets monthly.

Work Health and Safety Committee

The Work Health and Safety Committee consists of the Executive General Manager Corporate Services Division (Chair), the Manager People, Performance and Support Section (Deputy Chair), and representatives from management, each division, the Community and Public Sector Union, and the Media, Entertainment and Arts Alliance. It provides for a participatory approach to the prevention of work-related injury and illness and considers any matter relevant to employees’ health and safety raised by employees, management or Health and Safety Representatives.

The Work Health and Safety Committee meets monthly.

Risk management

During 2012–13, the Clean Energy Regulator continued to utilise the risk management framework it had inherited from the Department, while adopting new likelihood and consequence tables tailored to the Clean Energy Regulator’s operating environment. The framework is based on the Australian–New Zealand standard for risk management, AS/NZS ISO 31000:2009.

The Clean Energy Regulator identified six strategic risks that align with the objectives. These risks shape the Clean Energy Regulator’s business priorities, and the identification and management of operational risk.

Fraud prevention and control

The Clean Energy Regulator’s fraud control plan was finalised and approved during 2012–13, outlining strategies to prevent, detect and respond to fraud. Corporate and legislative scheme fraud risk assessments were completed and integrated into enterprise risk registers, ensuring that ownership and responsibility sits at appropriate levels. The assessments underpinned improved control measures and delivery of tailored fraud awareness training across the Clean Energy Regulator.

The Clean Energy Regulator has several means of receiving allegations of fraud from both internal and external sources. The Clean Energy Regulator treats all allegations of fraud seriously and is committed to maintaining confidentiality and protecting those who provide information concerning alleged fraud.

The Agency now has a mature intelligence function with the capability to collect and analyse allegations of fraud. An agency-wide investigations team has been established, to commence on 1 July 2013, and will enhance the Clean Energy Regulator’s ability to investigate and respond to allegations.

To avoid conflicts of interest, a direction issued to officers under the Public Service Act 1999 requires officers to refrain from acquiring or disposing of interests in an organisation at a time when the Clean Energy Regulator is considering making a decision that affects that organisation.

During 2012–13, the Clean Energy Regulator signed memoranda of understanding with the Australian Taxation Office, the Australian Competition and Consumer Commission and the Australian Energy Regulator. These arrangements, together with membership of a working group under the Heads of Commonwealth Operational Law Enforcement Agencies, have enhanced the Clean Energy Regulator’s capacity to share information relevant to fraud and to discuss risks and controls.

Negotiations are underway with the Australian Crime Commission and the Australian Transaction Reports and Analysis Centre to further extend domestic information-sharing capacity. Discussions have also commenced with the European Commission and the California Air Resources Board with a view to future international memoranda of understanding.

Internal audit

The Chief Internal Auditor is responsible for the efficient and effective operation of the Clean Energy Regulator’s internal audit function, reporting directly to the Chief Executive Officer and the Audit Committee. The Chief Internal Auditor and the internal audit function reside within the Corporate Services Division.

The Clean Energy Regulator’s Audit Committee held its inaugural meeting on 28 August 2012 in compliance with section 46 of the Financial Management and Accountability Act 1997. Details of the committee’s role and membership are provided on page 63. The Audit Committee provides independent assurance and assistance to the Chief Executive Officer on the Clean Energy Regulator’s risk, control and compliance framework.

During 2012–13, the Audit Committee held quarterly meetings in August, December, March and June, and financial statement meetings in September and October. The Audit Committee approved the Audit Committee Charter, the Internal Audit Committee Charter, its internal work program and internal audit reports on performance and compliances issues. The Audit Committee also reviewed the Clean Energy Regulator’s financial statements, Certificate of Compliance, fraud control plan, risk management framework and business continuity plan.

Oakton Services Pty Ltd provides internal audit services to the Clean Energy Regulator and finalised four internal audits during the year, covering:

  • contract management
  • financial processing controls
  • controls associated with the implementation of the carbon pricing mechanism and the Jobs and Competitiveness Program
  • the Clean Energy Regulator’s Certificate of Compliance under the Financial Management and Accountability Act 1997.

Audit findings include recommendations that are categorised according to the level of operational risk associated with them. The Chief Internal Auditor is responsible for monitoring and reporting on the actions arising from the recommendations.

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