Effective governance can make a real difference to the performance of public sector entities and to the outcomes sought by government. This is a compelling reason for all public sector entities to periodically review and refine their approaches to governance. Reflecting the public sector environment, governance arrangements need to position entities to achieve the best results for the government and Australian community, consistent with legislative and policy requirements. At the same time, they must focus each public sector entity on its performance to encompass the efficient and effective delivery of its responsibilities in a sustainable manner.

Achieving effective governance depends on developing and maintaining appropriate and accepted governance structures and frameworks; it also depends heavily on the application of appropriate governance choices and a commitment to making them work. It is the positive interaction between the ‘hard’ and ‘soft’ elements of governance—the structural and people elements—that leads to improved performance. In this respect, strong leadership is a critical driver for success; it can ensure appropriate governance arrangements are in place and foster ownership of the entity’s goals and strategies by its staff.

This guide replaces the Australian National Audit Office’s (ANAO’s) 2003 Public Sector Governance Better Practice Guide. Public sector governance has matured since the ANAO’s earlier guide; this guide’s substantially revised content reinforces the fundamental elements required for good governance and builds on them to address contemporary governance issues and challenges. In particular, greater attention is given in this guide to the importance of leadership, engaging in beneficial stakeholder relationships, and working collaboratively across entity, jurisdictional and sector boundaries to enhance policy outcomes. The guide emphasises the importance of a highly performing public sector, particularly in the light of fiscal constraints and public expectations for continuous improvements to public sector services, more transparent processes and increasing levels of engagement with citizens and other stakeholders. The release of the revised guide has been timed to align with the implementation of the substantive provisions of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) in 2014–15.