New governance arrangements for CASA
3 February 2004
Shortly after my appointment was announced last year, I made a point of saying for the record that I considered CASA to be an improved safety regulator, compared to some years ago. I also said that together with CASA’s management and staff I would aim to continue that improvement.
In my first public statement after joining CASA I emphasised that I was not in the business of making change just for the sake of it, that some changes would occur early in the scheme of things, and that others would occur more slowly, but they would come. And I emphasised then that the changes I do make will be carefully considered and measured against the goal of building an even better and more effective organisation.
One of the first tasks I undertook was to define the governance and management processes under which I see CASA moving forward. I am now in a position to let you know about the basic direction and reporting arrangements I am introducing. The senior management group was informed of these arrangements earlier today and I want to ensure that staff are advised at the earliest opportunity.
The arrangements are intended to achieve an appropriate framework for strategic guidance and financial control by the CEO, reflecting the new legislative provisions under which we operate. They provide for a unified control of CASA’s operations, with a greater emphasis on individual accountability and a move away from collective responsibility. It is a starting point, the foundation on which an even better CASA will be developed.
The improvement process will be ongoing, but at a rate which can be properly managed and in a way that is sensitive to the needs and interests of all at CASA, and will build on the improvements made in the last few years. There will be further announcements as the program moves forward and you will be kept fully informed of initiatives and developments.
Direction and Reporting
Most of you will already be aware of the new high-level governance arrangements which came into place with amendments to the Civil Aviation Act, towards the end of 2003. As Chief Executive Officer I am directly responsible to the Minister. He provides broad direction reflecting government policy and priorities, and I report to him on CASA’s performance in meeting that strategic direction. As CEO I have ultimate responsibility for that performance, and I fulfil this responsibility by setting strategic policy, issuing directives to senior management, and exercising financial control. Operational reporting to me as CEO will be by way of governance and function reports, and compliance with directives that I issue.
Office of the CEO
To help support the new responsibilities applying to the role of the CEO, I have established an Office of the CEO. The CEO and the Chief Operating Officer (Bruce Gemmell) are the core positions in the Office. Finance, to be headed by a Financial Controller, and Risk and Audit, will report directly to the Office of the CEO. Where required, specific legal advice will be provided to the CEO by the General Counsel, although for most purposes the Office of Legal Counsel will report to the COO. The Office of the CEO will have a small support staff which will include adviser positions providing strategic level input in areas such as research, planning, and operational analysis. It is intended, for example, that Corporate Planning will move from Corporate Development to the Office of the CEO.
CEO Management Processes
As CEO I have sole final decision-making responsibility. There is no longer a Board, and it is no longer appropriate for there to be an executive group acting in a collective decision making role. I have therefore established the CEO Reporting and Planning Meeting as CASA’s single formal high-level reporting forum. There will be a meeting once a month. Written divisional activity reports and proposals will be provided to both the CEO and the COO ahead of the meeting. However, the meeting will be structured on the basis of the COO, who has overall responsibility for CASA’s operations, reporting to me on operational outcomes, and bringing forward proposals for decision.
The COO may ask individual executives to attend the meeting to present specific divisional reports or proposals, although divisional heads will not normally be present as a group. The focus of the meeting will be on governance, function reporting, compliance with directives, and ensuring the requirements of the Civil Aviation Act are being met.
Some of you will be aware that I have put in place a financial due diligence exercise, and a CEO’s review of CASA IP. Those activities will be finalised over the next few weeks.
My focus as CEO will be on strategic issues, and on significant policies having general application. It will be the responsibility of the COO to establish policies specific to particular operational issues.
CEO Directives
I have put in place a procedure under which over time I will issue a series of CEO Directives. The Directives will deal with significant matters, some operational, some behavioural, some structural, which need to be addressed if CASA is to move ahead in the way I intend. The Directives will state what is to be achieved, and who is to be responsible. A specific time limit for completion will be set. Each Directive will normally be forwarded through the COO to a nominated senior executive who will have specific responsibility for the outcome.
The Directives will be outcome-oriented, and it will be for management to determine how the task contained in the Directive will be undertaken.
I have today issued fourteen Directives. The first four Directives relate to the need to review elements of the Regulatory Reform Program. This will involve a delay in the bulk of the overall Program, although hopefully the delay will not extend beyond 30 June 2004. There are two Directives covering reviews of Particular Parts, and another Directive relates to the planning needed to accommodate the overall delay, and the specific reviews.
Other Directives involve the Airline Office audit program, the establishment of a Design and Manufacturing Office, and a change in the authorisation requirements for CASA IP Statements of Work. There are also Directives on identification of risks, review of CASA policies, changes to the Compliance resources focussed on GA, and the GA audit program. Complaints handling is also addressed.
All but one of the Directives, which is confidential for the present, are available on the web site.
Operations Structure
Under the new arrangements, all operational areas, including Corporate Services, Corporate Affairs and OLC will report to the Chief Operating Officer, who in turn reports to the CEO. CASA IP will be treated a project, also reporting to the COO.
The intention is to have a single management group. The COO is to develop, by 1 March 2004, the processes by which CASA’s operations will be managed. These processes are to be as simple as possible, with clear lines of responsibility, and short lines of communication.
Establishment Review
To ensure that resources across CASA are allocated and organised to effectively enable us to meet our obligations under the Act, and our current and future challenges, I plan to undertake an organisational review. This will commence in early March and will be undertaken by myself and the COO. I do not have any predetermined view of what the outcome of this review might be. Staff and their representatives will be consulted.
Conclusion
As I said at the outset, what I have announced today establishes a structural base from which we will move forward. It is a beginning, not an end. There are other issues that need to be addressed, and they will be. I have been encouraged by the positive attitude shown at the meetings and discussions I have had with many of you over recent weeks, and further such meetings are scheduled. That positive response re-affirms my belief that we can make the changes that are necessary, that we can get CASA to where it needs to be, and that we can do so in a way that makes CASA an even better and more satisfying place in which to work.
The attached links will take you to some of presentation material I gave to senior management this morning, as well as to the initial CEO Directives. I would expect to inform industry of these initiatives over the next day or so.
Powerpoint presentation to senior management (124 kb PDF)
CEO Directives
Bruce Byron
Chief Executive Officer
3 February 2004