An independent review into governance arrangements at the Australian Securities and Investments Commission has cleared chair James Shipton of wrongdoing, but the regulator boss will resign later this year.
Treasurer Josh Frydenberg on Friday said it was “in the best interests of ASIC” for Shipton to step down, with his replacement expected to be hired within the next three months.
Frydenberg said there would be “significant changes” to the governance of ASIC in response to the review conducted by former senior public servant Dr Vivienne Thom, which was sparked by Australian National Audit Office findings last year.
In October it was revealed ASIC paid Shipton more than $118,000 for tax advice related to his relocation from the United States to Australia, while his deputy, Daniel Crennan, received more than $69,000 for accommodation payments. The audit office had found the payments exceeded limits set by the commonwealth remuneration tribunal and raised concerns over the procurement processes around the payments.
The Thom review — which was delivered to Treasury secretary Dr Steven Kennedy in December and was released publicly on Friday — made no adverse findings against Shipton or Crennan.
However, it did highlight a range of governance issues at the corporate watchdog, as well as problems with its use and management of public resources, risk oversight and management systems, internal control systems, and cooperation between officials.
Thom has made eight recommendations to address the governance issues, and to improve the Treasury’s processes for managing the appointments of statutory officers under Treasury portfolio laws.
She has recommended that it would be “reasonably open” to the Treasury to obtain legal advice about whether Shipton has breached the Australian Public Service Code of Conduct or the ASIC Code of Conduct, and any further action to be taken.
Frydenberg said ASIC would be expected to prioritise the implementation of Thom’s recommendations regarding internal risk, management and governance arrangements, and to regularly report to him on its progress. Meanwhile, Kennedy has been charged with implementing a new system for managing the appointments of statutory officers.
The treasurer said Shipton would be remunerated for his time on leave, and would resume his position until a new chair is appointed.
“He will be paid for that time that he was on leave and that is appropriate in light of the findings and the fact that that was a voluntary decision that he took at that time,” Frydenberg said.
In light of the release of the review, shadow assistant treasurer Stephen Jones accused Frydenberg of “throwing respected corporate leaders under a bus”.
“He’s been happy to leave ASIC rudderless at a time when corporate Australia and everyday consumers have never needed a trusted cop on the beat more,” Jones said in a statement.
“He and Scott Morrison have destroyed trust with corporate Australia over their handling of both Mr Shipton’s case and their confected outrage at waste by senior executives at Australia Post. Time and time again they have shown they always put their political interests ahead of proper process.”
Jones has urged Frydenberg to immediately outline his plan to replace Shipton and to address the “trust deficit” with corporate Australia.