We need certainty around increased spending on defence

By Dr Mark Harvey, Project Delivery Associate at The Vaxa Group

The Commonwealth Government is reportedly considering increasing defence spending from $45 billion/year to $75 billion/year over the coming decade.

You’ll get no argument from me on that, as the strategic reasoning is clear. So is the much-needed boost it will help bring to the Australian economy.

However, the government and, of course, Australians will want assurances those funds will be spent wisely within an overarching and rigorous ethical framework characterised by solid governance within the Australian Defence Force (ADF).

In this context, the recently-publicised detection of serious misconduct within the ADF is a consideration, that is if the cultural conditions which allowed those incidents of misconduct to occur have the potential to similarly allow conditions for financial misconduct within the ADF.

Positively, and no different to any organisation, there are many steps the leadership of the ADF can undertake to assure conditions for ethical financial conduct across their organisations.  

Those steps include: 

  • The need for the organisation’s leadership to comprehensively understand that incidents of unethical behaviour are rarely caused solely by the lack of ethics on the part of individuals, but are often the result of culture, governance and systems failures. And, of course, accepting that they are responsible for the entire culture and its norms, which the ADF leadership has done well in recent years.
  • Ensuring well-designed governance processes are in place and, importantly, that they are externally reviewed regularly to ensure they are fit for purpose and will detect financial anomalies.
  • Implementing strategies which reduce opportunities for unethical financial behaviour to occur, including internal and external audit, conflict of interest oversight and training, maintaining control systems including financial management and enterprise risk management systems which include strong fraud reduction strategies.

However, full confidence in the alignment between the shared values and expectations of an organisation, and its stakeholders and actual organisational practices – in this case financial practices – cannot be achieved through strong governance to drive compliance alone.

In fact, compliance is just one of 26 criteria required for organisations to drive ethical practice. The others include comprehensive workplace pressure management, organisational factor analysis, ethical workplace orientations and systems (including those that support the reporting of ethical concerns).

Implementing the above-mentioned criteria can help any organisation to enhance service delivery and provide solid evidence of value for money delivery to stakeholders, including the Commonwealth and the people of Australia.

Dr Mark Harvey is a highly motivated and driven organisational leader and management consultant who specialises in the fields of corporate ethics, integrity and governance programs. He is experienced in delivering strategic and operational outcomes in the areas of business development, innovation and efficient IT solutions. Mark lectures at Queensland University of Technology (QUT) as part of its Executive MBA Program on corporate ethics and is a Detective Inspector in a law enforcement agency where he leads investigations into misconduct and criminal activity.

 


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