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HB
HB 3252008

Assuring probity in decision-making

HB 3252008

Handbook
This is a free 5 page sample. Access the full version at http://infostore.saiglobal.com.

Assuring probity in decision-making

First published as HB 3252008.

COPYRIGHT Standards Australia All rights are reserved. No part of this work may be reproduced or copied in any form or by any means, electronic or mechanical, including photocopying, without the written permission of the publisher. Published by Standards Australia GPO Box 476, Sydney, NSW 2001, Australia ISBN 0 7337 8887 4

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Preface
This Handbook is part of a series of guidance material prepared to assist those in organisations who are seeking to implement good governance. In 2003, Standards Australia issued the AS 8000 suite of Australian Standards on governance. That series was designed to provide a platform for organisations to implement a successful corporate governance strategy. The Standards were developed around the OECD Principles of Corporate Governance, the IFSA Blue Book and the ASX Listing Rules.
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Committee MB-004 developed handbooks to assist organisations to implement those Standards, including: HB 4002004 Introduction to corporate governance HB 4012004 Applications of corporate governance HB 4022004 Business planning HB 4032004 Best practice board reporting HB 4052004 Disclosure and transparency frameworks HB 4072006 Corporate governance for small business HB 4082006 Corporate governance culture

Further Handbooks are in preparation, as experience implementing the Standards highlights key issues needing more detailed guidance. One such issue that has emerged in advancing the governance cause is that an essential quality, or feature, of good governance is that stakeholders must have confidence that major decisions and commitments are made with probity. This requires that those responsible for corporate governance demonstrate effective tone at the top through a governance culture in which probity is assured. This is not restricted to any sector, type or size of organisation. Probity assurance is important in making significant decisions, including but not restricted to, procurement decisions. Any undertaking or decision involving significant risk potentially warrants some level of probity assurance. Significant decisions involve significant commitments. Stakeholders must be confident that commitments are made carefully and on their merits alone. Addressing probity issues should be a normal part of any significant project or decision-making process. A project can be any major undertaking such as an acquisition, construction of a building, a development application, a grant, a sponsorship, a sale/divestment, a joint venture or a major supply agreement. Chapter 1 explores the need for probity, and the benefits of probity assurance. A decision-support tool embodying probity as a core feature of decision-making is provided in Chapter 2. However, some decisions are part of a long and complex chain, or are very complex in other ways. In those circumstances, the quality of decision-

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HB 3252008

making can be enhanced through the use of probity specialists. This is explored in Chapter 3. Standards Australia would like to thank the following people for their contribution to this Australian Handbook: Stephen Horne (Chair Working Group), Managing Director, IAB Services Stephen Linden, Director, Assurance & Consulting, Stantons International Pty Ltd and also representing the Institute of Internal Auditors, Australia Neil Adams, Director Adams Consulting & Training Pty Ltd

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Standards Australia also extends their thanks to the numerous individuals who provided feedback on the various drafts of the Handbook during the development.

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Contents
Page 1 What is probity and why is probity assurance important? 1.1 1.2 1.3 1.4 1.5
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Probity is not an optional extra ..................................1 The need for probity assurance ..................................2 Level 1: sound decision-making processes.................3 Level 2: expert assistance ..........................................3 What probity looks like in practice...............................4

2 3

A general model for decision-making.................................... 6 Enhancing decision-making by using probity specialists 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 The probity specialist ..................................................7 Independence of probity specialist..............................9 Skills of the probity specialist ....................................10 Confidentiality ...........................................................11 Conflicts of interest ...................................................11 Terms of reference ...................................................12 Plans.........................................................................13 Probity planAreas of risk .......................................14 Review of documentation..........................................16

3.10 Role at briefings........................................................16 3.11 Role at site visits.......................................................16 3.12 Role at evaluation committee meetings ....................17 3.13 Responses to probity queries from proponents.........18 3.14 Role during contract negotiations..............................18 3.15 Role at tenderer debriefings......................................18 3.16 Working papers.........................................................19 3.17 Probity report ............................................................19 APPENDICES A B C D Big Issue Grappler ....................................................21 Probity review checklist.............................................24 Glossary of terms......................................................28 References ...............................................................30

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HB 325-2008, Assuring probity in decision-making

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