The very high-profile sacking of Michelle Guthrie as managing director of the ABC, and its subsequent (and ongoing) fallout, demonstrates a critical failure of management, it has been claimed.
My Business’ sister publication Lawyers Weekly reported on comments made by Alan McDonald, managing director of law firm McDonald Murholme, suggesting that the ABC has “exposed themselves to potential legal recourse for terminating her employment unlawfully”.
“[Ms] Guthrie was dismissed midway through a valuable five-year contract because it is alleged that Malcolm Turnbull’s close friend who he had appointed head of the ABC appears to have tried to force his CEO (Guthrie) to sack journalists because of their political opinion, referring to one journalist Emma Alberici ‘the government hates her’,” Mr McDonald said.
“The matter is extremely serious because if proven, that would be a breach of the ABC’s charter by Turnbull and the head of the ABC.
“The real reasons behind the dismissal appear to be highly political.”
Mr McDonald suggested that it could come down the email trail, and the extent to which it is released to the courts if legal action is taken by Ms Guthrie, as to whether her dismissal can be proven to be unlawful.
Meanwhile, the Governance Institute said Ms Guthrie’s sacking, and the subsequent resignation of ABC chairman Justin Milne, demonstrates the importance for all businesses to clearly define and separate the responsibilities between the board and senior management.
“When leadership structures include a managing director (MD) role, the distinction between the role of directors and managers may become blurred because they have board and management responsibilities,” said acting chief executive Meegan George.
“Boards that fail to establish a clear delegation of authority to the CEO and management run the risk of interfering unnecessarily and inappropriately in the operations of the organisation.”
Ms George said the central point of the controversy is the chairman overstepped his responsibilities by becoming too involved in staffing issues, as demonstrated by the reported emails pushing for the sacking of high-profile journalists.
She noted that according to the ASX Corporate Governance Principles and Recommendations (3rd Edition), good governance requires an appropriate separation between the board, who have an oversight role and management, who are responsible for the implementation of strategic objectives and performance.
“The CEO has a clearly defined role to work with the management team to achieve the vision and implement the strategy of the organisation,” Ms George said.
“As leader of the board, the chair’s role is to ensure all directors contribute effectively and promote constructive and respectful relations between directors and between the board and management.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.