Their ABC is just ungovernable

According to the unions and the Friends of the ABC, the end is nigh.

Taking advantage of this blip on the radar screen of the comfortably padded national broadcaster, questions have been asked about the appropriate mix between in-house and outsourced program making.

But two much more fundamental questions about the ABC are calling out for cogent answers. First, what is the case for the ABC given the shrinking relevance of the market failure rationale? Second, is the ABC essentially ungovernable?

Demonstrating my courageous streak, I recently attempted to answer the first question on the ABC's in-house website, The Drum.

The point I made was that it was not sufficient that consumers of the ABC derived private benefits from the output. Rather, the social benefits must exceed these private benefits -- and by a very wide margin -- to justify the expenditure of $1 billion of taxpayer funds.

Tsunami-like, the outraged comments flooded in.The irony was that most of these comments were essentially along the following lines: I love the ABC, I hate commercial media, the ABC should therefore continue to be funded.

There were, however, a small number of comments that did have an effect on me. The core of these comments was along the following lines: as deputy chairman of the ABC for more than five years, what did you achieve to change the organisation to meet the challenges of this contested environment? This is an entirely legitimate and fair question to pose.

While the legislation outlines the role of the board, it is not helpful. It talks about ensuring that "the functions of the corporation are performed efficiently with maximum benefit to the people of Australia and to maintain the independence and integrity of the corporation". The board is also responsible for ensuring that "gathering and presentation of news and information is accurate and impartial, according to recognised standards of journalism".

In a nutshell: efficiency, something for everyone, independence and veracity, but very little guidance in reality.

As a board member, I always got the impression from staff members that, according to their view of the world, directors come and go, while we are here forever. To be sure, they would generally be polite and attempt to provide some information. But there was little doubt about who was in charge: them.

Take the example of remuneration and terms of employment of staff.

In the listed company world, the law dictates an annual remuneration report be produced, with extensive details of the remuneration packages of the highest paid staff.

When it came to extracting this information about the ABC's "talent" -- as opposed to functional managers -- requests from the board were met with resistance and obfuscation. The reality is that many well-known ABC presenters have individually tailored employment arrangements -- some are even employed through companies -- with lots of hidden perks and side benefits. So when those talented presenters railed against the evils of Work Choices with its individual employment agreements, there was a distinct odour of double standards undetectable to the public.

No doubt, the very idea that the ABC is ungovernable and unaccountable will offend many ABC staff and supporters. Jonathan Holmes, presenter of Media Watch, chanced his arm recently on this topic by claiming that "of all media outlets in Australia, the ABC is by far the most heavily regulated -- especially, though not exclusively, by itself."

Of course, the ABC view of self-regulation -- say of Big Pharma or Big Tobacco -- is that it is a self-serving and ineffective device designed to hide the truth from consumers and the public. But not, it seems, when it comes to the ABC itself.

Holmes continues with his argument.

"The ABC's editorial policies are published. Complaints are taken seriously. Certainly, most are rejected, but some are not, and ABC staff know that being at the wrong end of an upheld complaint is not good for their careers."

This last statement is capable of being verified and I am looking forward to reading this information in the annual report or other official source. In my experience, the exact opposite was the case. Staff members who had complaints against them upheld regarded the outcome as a badge of honour. Indeed, some staff members who now occupy very senior presenting roles have cost the ABC many hundreds of thousands of dollars in defamation payouts, arising from outrageously sloppy, biased and unfair journalistic practices.

This is notwithstanding the fact Holmes thinks ABC journalists take the requirement for accuracy and fairness extremely seriously.An obvious response to my proposition that the ABC is essentially ungovernable is that things have changed, that the board is now firmly in charge of the organisation and that all staff members fully understand the need to be accountable and responsible for their actions.

Frankly, I doubt it, because the underlying structures remain unchanged (with the possible exception of the absence of a staff-elected board member); the group-think among the staff that was so evident in 2005 is likely to have persisted; and the largesse of the taxpayer has, if anything, expanded. Short of some broad-based and hard-nosed external review and significant cuts to taxpayer funding of the organisation, it is hard to see how the ABC will fundamentally change -- and, of course, that suits the Friends of the ABC and other devotees just fine.

Judith Sloan was deputy chairman of the Australian Broadcasting Corporation between 1999 and 2005. She is an economist and company director.