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CASA Annual Report 2004-05 - Part 3: Corporate Report

Part 3: Corporate Report

Governance

Corporate governance changes were introduced in the Civil Aviation Amendment Act 2003, which became law on 21 October 2003.

These changes:

  • abolished the CASA Board, but retained CASA as an independent statutory authority;
  • designated the Director of Aviation Safety as chief executive officer, responsible for managing CASA under the Minister; and
  • gave the Minister stronger and more direct control over CASA's governance and accountability.

Under the CASA corporate governance arrangements, the Director of Aviation Safety (the CEO) is directly responsible to the Minister for CASA's management.

Under the Civil Aviation Act, the Minister may require CASA to act in accordance with directions or notifications about:

  • the way its functions are performed and powers are exercised (section 12)
  • strategic directions (section 12A)
  • supplying documents and information to specified nominees (section 12B)
  • reporting (section 12D).

Section 12C of the Act also provides the Minister with the power to enter into an agreement with the Director (CEO) about the performance of CASA's functions and the exercise of CASA's powers. The Director (CEO) must take all reasonable steps to comply with the terms of an agreement.

In order to ensure regulatory independence, directions from the Minister about the performance of CASA's regulatory function can only be of a general nature. This restriction also applies to notices under section 12A and an agreement under section 12C.

There were no statutory directions or notifications under sections 12, 12A, 12B or 12D in 2004-05.

Executive Responsibility

Mr Bruce Byron, AM began a five-year term as Director of Aviation Safety and chief executive officer on 1 December 2003. Mr Byron is also the sole director of CASA for the purposes of the Commonwealth Authorities and Companies Act 1997.

Under the CASA corporate governance arrangements the role of the Director/CEO includes:

  • managing CASA's day-to-day operations
  • deciding the objectives, strategies and policies to be followed by CASA
  • ensuring that CASA works within the broad framework of the Government's policies and priorities
  • ensuring that CASA performs its functions in a proper, efficient and effective manner.

Mr Gemmell acted as the Chief Executive Officer on two occasions during the reporting period. Mr Rob Collins acted as Deputy Chief Executive Officer and Chief Operating Officer in these periods.

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Audit and Risk Committee

As required by the Commonwealth Authorities and Companies Act 1997, CASA maintained an audit committee throughout 2004-05 to support effective corporate governance. The committee comprised:

  • Barbara Yeoh, Chair (April 2004 to present)
  • Martin Dolan (April 2004 to June 2005)
  • Michael Lewis (April 2004 to present)
  • Bruce Gemmell (April 2004 to present)
  • Mr David Andersen (Secretary)

Audit and Risk Committee

See Appendix 1 for details of the qualifications and experience of Audit and Risk Committee members.

There were seven meetings of the Audit and Risk Committee during 2004-05. All members were present at each of the meetings they were eligible to attend.

The committee operates under a charter and, as constituted since April 2004, has an independent chairperson. It reports to the Chief Executive Officer and has direct access to internal and external auditors, the Chief Financial Controller, the CASA Risk Manager, General Counsel and senior management.

The committee assists in assuring compliance with CASA's obligations under the Civil Aviation Act, the Commonwealth Authorities and Companies Act and other applicable legislation, regulations and codes of practice and conduct.

It is also specifically charged with overseeing the risk management function.

During the year, the committee:

  • provided a forum for communication between the Chief Executive Officer and CASA's internal and external auditors
  • provided guidance on the effective management of risk
  • advised the Chief Executive Officer on aspects of internal and external audit, accounting procedures, systems, controls, and financial reporting
  • promoted accurate, quality and timely disclosures of financial and other information to the Chief Executive Officer and other key stakeholders, such as the Minister
  • examined internal audit reports.

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Management structure

The CEO's responsibilities call for a practicable balance between leadership and operational involvement. As part of the 'Building a New CASA' programme of reforms was the release of the new high-level organisational structure which was implemented on 1 July 2005. While only a part of a larger reform process, this new structure aligns CASA more closely with the way the aviation industry operates.

The management structure during the reporting period, and the management structure post 1 July 2005 allows the Chief Executive Officer to focus on strategic direction, policy setting and CASA's relationship with stakeholders, while maintaining the necessary oversight of operations and ultimate financial control.

Key features of the arrangement are:

  • devolution of day-to-day overall management responsibilities to the Chief Operating Officer
  • creation of a support structure for the Chief Executive Officer, with strategic research, planning, communications and operational analysis capabilities that are independent of line management
  • direct reporting to the Chief Executive Officer on all risk and audit matters
  • direct reporting to the Chief Executive Officer on legal matters relating to governance, conformity with the Civil Aviation Act, the Commonwealth Authorities and Companies Act and other legislation or government guidelines
  • the responsibility placed upon senior managers to make decisions relevant to their areas.

A robust communication and information sharing system and a disciplined approach to reporting maintains a chain of accountability within CASA to the Chief Executive Officer and from the Chief Executive Officer to the Minister.

The Chief Executive Officer provides a written monthly report to the Minister on CASA's operational performance. In addition, the Chief Executive Officer has a face-to-face meeting with the Minister so there is an opportunity to allow both parties to raise and discuss issues. There were three such meetings in the period to 30 June 2005.

In line with the Minister's desire to develop and maintain a whole-of-portfolio perspective on aviation issues, the Secretary of the Department of Transport and Regional Services (DOTARS), Mr Michael Taylor, receives a copy of CASA's monthly reports and is present at the Chief Executive Officer's regular meetings with the Minister.

As well as day-to-day contact, there are two scheduled monthly meetings between the Chief Executive Officer and Chief Operating Officer. One is an all-day informal meeting to discuss issues: at the other, the Chief Operating Officer formally reports to the Chief Executive Officer on all delegated operational responsibilities, Chief Executive Officer decisions are made and minutes are kept. There were twelve formal Chief Executive Officer meetings in 2004-05.

In turn, the Chief Operating Officer has a scheduled formal monthly meeting at which senior managers propose matters for decision by the Chief Operating Officer. There were twelve formal Chief Operating Officer meetings in 2004-05. Three times a month the senior management group meets to share information.

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