‘Unwise at best’ – CEO’s conduct under scrutiny

LAST week’s State Ombudsman’s report into issues with senior City of Ballarat staff contained several findings against CEO Justine Linley.

In all, six current or former council employees’ involvement with Ms Linley on some level were examined.

The report found that in two cases, “Ms Linley was involved in certain employment decisions regarding a friend and former colleague, Officer D, and fellow LGPro associate Officer E, that were unwise at best and may have been improper.”

Officer D, the City’s current director of development and planning, Angelique Lush, had worked with Ms Linley the Northern Grampians Shire Council before gaining a job at the City of Ballarat in in early 2009.

When Ms Linley joined the municipality as CEO in May 2016, she came directly from the same role at Northern Grampians. Before arriving in the city, and according to the report, Ms Linley “continued to take an interest in Officer D’s work and career, informally mentoring her.”

As part of the report investigators found, “Current and former Ballarat council officers said it was general knowledge the Officer D was friends with Ms Linley… and Officer D told staff they were friends.”

Perceptions of a conflict of interest first arose when shortly after Ms Linley commenced in the CEO role and Ms Lush landed a four-week acting chief financial officer position.

This move raised eyebrows with some council staff as Ms Lush was only a manager at the time. One council officer reported is was “unusual for managers to act in director-level roles outside their usual portfolio area and Office D had no experience for this role.”

Ms Lush was also received a significant higher duties allowance, equivalent to a director with seven years experience.

Glenn Kallio, director business services, told investigators that Ms Lush had been identified for the acting CFO role about two months before Ms Linley arrived and that a previous officer had taken on acting CFO role and was “no better equipped or experienced to perform the role than [Officer D].”

According to the Ombudsman’s report Ms Linley agreed with Mr Kallio, although investigators said no supporting evidence was provided on when the acting CFO call was made.

Further perceptions of a conflict of interest arose following a restructure of senior roles within council, leading Ms Lush to apply for a director job related to planning and development, which she then gained.

Investigators found three issues with Ms Linley’s involvement during the recruitment of Ms Lush as a director.

First Ms Lush was less qualified and experienced than other candidates, second Ms Linley delayed in declaring a conflict of interest, and lastly, Ms Linley then took part in the interview process that included her friend and informal mentee.

When it came to the three shortlisted candidates, Ms Lush held a bachelor of business management and was part way through a master in business administration. The one of the other two candidates had a bachelor degree in arts and a master of urban planning, while the second held a bachelor of applied science and planning.

When it came to experience Ms Lush had only acted in a director role, something that had occurred shortly after her stint as acting CFO. The other two applicants had been directors in the past, “both with 25 years’ experience in planning.”

Ms Linley submitted to investigators that while the other applicants had more relevant qualifications, the key thing for her was, “organisational fit and culture and the other component parts in the position description.”

On the same day Ms Linley declared a conflict of interest in the recruitment process, she also communicated by email with the director of infrastructure and environment Terry Demeo about the three shortlisted applicants, which included Ms Lush, despite Ms Linley telling investigators, “[w]hen I realised [Officer D] had been put forward, I wanted to make sure that it wasn’t something I was directly involved in.”

The council’s then HR manager told investigators she advised Ms Linley to make the conflict of interest declaration earlier but Ms Linley “resisted.” The HR manager then took the issue to business services director Mr Kallio but was subsequently removed from the recruitment process.

On the same day Ms Linley declared her conflict of interest and discussed the shortlisted candidates with Mr Demeo, she also emailed the City’s HR coordinator saying to keep the recruitment issue, “in confidence between yourself, [the Director, Business Services] and the interviewers from now on and no other liaison with staff/ managers in HR.”

Ms Linley told investigators, her direction that the HR coordinator not talk to the HR manager was “out of concern that the HR coordinator, who was a close friend of the former HR Manager, would divulge information about the process (even inadvertently)” and that the HR manager had a conflict relating to a different recruitment process. She also said it was Mr Kallio’s call to remove the HR manager.

Mr Kallio confirmed the HR manager was removed due to a conflict of interest, but investigators couldn’t establish how that conflict related to the director role hiring process.

When it came time to interview candidates, and despite Ms Linley having a friendship and informal mentorship with Ms Lush, she took part in the interview process.

In an email to Mr Kallio she said, “It is important that as CEO I am directly involved in the recruitment process for director positions as the role reports directly to me.”

In the same email she outlines a series of “checks and measures”, including only asking questions during the interview and not scoring the candidates, the addition of, “An external, at arms’ length, panel member” – the then Committee for Ballarat CEO – only allowing the two other interview panel members, one of which was Mr Demeo, to make the call on who to employ, the addition of an independent observer from the municipality’s compliance unit who would be present during Ms Lush’s interview and subsequent discussions, and making all panel members aware of Ms Linley’s conflict of interest declaration.

Mr Kallio replied that there wasn’t a need for the independent observer.

Once the interviews were done Ms Linley told investigators that both panel members recommended Ms Lush for the director job.

Ultimately in relation to the recruitment of Ms Lush to the director role the Ombudsman found, “These measures were inadequate to manage her conflict of interest. Under council’s recruitment and selection policy, Ms Linley should not have been on the selection panel, given her friendship with Officer D was likely to inhibit her objectivity and would reasonably be seen by others as a conflict of interest. Indeed, Ms Linley’s decision not to score the candidates suggests she was aware her friendship with Officer D would be perceived in those terms.”

On two other occasions the Ombudsman found noteworthy elements to the relationship between Ms Linley and Ms Lush.

When Ms Lush was part of a bullying complaint, resulting in a verbal warning, Ms Linley told Ms Lush a note would be placed in her HR file, even though an external investigation of the matter advised that a written warning was appropriate.

Regardless, investigators couldn’t find a record of the note relating to the verbal warning, something Ms Linley blamed on a subordinate.

Ms Lush also saw her salary double during Ms Linley time as CEO.

When she was a manager, Ms Lush’s total remuneration package was just under $115,000. When promoted to director it jumped to $230,000, then it went up again by 1.6 per cent on 30 October 2017, and again by 6.5 percent on 1 July 2018 to just under $248,000.

The second substantive finding by the Ombudsman links back to the hiring of Cameron Cahill, who is currently the City’s director of innovation and organisational improvement, known as Officer E in the report.

During the 2016 restructure of senior council positions a new deputy director role was created for policy and innovation.

Ms Linley was involved in the position description drafting and told investigators she was “fairly sure” she took part in the short listing of applicants.

Investigators found that Mr Cahill was less qualified than other applicants and had less experience.

When he applied for the job Mr Cahill was close to finishing bachelor of laws. In comparison other candidates held a master of business administration, on one case bachelor degrees in business, accounting and graduate diplomas in administration, strategic management and regional and community development.

When it came to actual work experience Mr Cahill told investigators at the time of application he had 10 years’ experience in the municipal sector, “in areas directly aligned to the role.”

Of the other interviewed candidates, one internal applicant had 17 years experience and according to investigators “had been acting in essentially the same role for approximately 12 months.” The third interviewee had 26 years’ experience in local and state government and the private sector.

Mr Cahill was the successful applicant and stated in May, 2016.

Ms Linley told investigators Mr Cahill, “answered questions exceptionally well” and “there was organisational fit.”

The Ombudsman’s report shows there was a grey area around if Mr Cahill and Ms Linley had a prior relationship that was more than just passing acquaintance through a professional association for municipal sector workers called LGPro.

Ms Linley said she was aware of Mr Cahill before he applied to the City of Ballarat deputy director role, though LGPro, saying she knew of him due to an award he received, had met him two times before the interview and that, “[i]t was pretty hard not to” know Mr Cahill and “there was a general knowledge that he was out there”.

Mr Cahill told investigators that had been at three events over three years where Ms Linley had been present.

In the end the Ombudsman found “Ms Linley formed a favourable view from her observations and interactions with Officer E through LGPro.”

Despite her claims that she was not well acquainted with Mr Cahill, Ms Linley submitted to the investigation that, “A desktop assessment of [Officer E]’s suitability for the position is entirely inadequate and fails to recognise the broader considerations of fit and capability.”

Five months after Mr Cahill joined the City of Ballarat as a deputy director, he was promoted to a director position with more duties and a $55,000 pay bump.

In the report Ms Linley disputes that the shift in title and paygrade amounted to a new position.

The Ombudsman suggested otherwise, noting that based on the Local Government Act, and considering the TRP of $230,000, the role “could not be considered anything other than ‘substantively a new role’ when it was expanded to include responsibilities for council’s HR functions, when those responsibilities were not part of the original position description, and when it involved a salary increase of over $50,000.”

In the report the Ombudsman also addresses claims around further lower level employees titled Officers F, G, H and I and concludes that available evidence does not support a conclusion that Ms Linley was improperly involved in, or improperly influenced, the recruitment of Officer F, Officer G, Officer H or Officer I to Ballarat Council.”

Officers F, G and H had all worked with Ms Linley at Northern Grampians Shire Council. Officer I had “no association” with Ms Linley.

Officer F was “invited” by Ms Linley to apply for manager position at the City of Ballarat that was only made available internally, and then paid above the advertised salary. Investigators found that Ms Linley’s only role in the actual recruitment of Officer F was to approve the higher paygrade.

While Officer H was still on a probationary period, having recently started working at the City of Ballarat, the staff member was found to be involved in bullying complaint that resulted in external investigators recommending termination.

Ms Linley did not follow that recommendation, instead choosing to issue a show cause letter to Officer H. She told investigators that she “understood such a letter was a necessary part of the process.”

Upon receiving a reply Ms Linley decided not to fire Officer H, although investigators couldn’t find a record of why she chose that course of action, or detail in the report the decision-making process behind the CEO’s call.

In response to a draft of the Ombudsman’s report issued to many parties involved in March this year, Ms Linley submitted, “I take this opportunity to reiterate that my management and leadership philosophy is and has always been based on the notion of collegiality, collaboration and building the capacity of all people through coaching and mentoring. Being respectful, accountable and achieving results together are my core values.”

Ms Linley was contacted to take part in this report but did not do so before publication.

The Ombudsman clearly states that apart from Ms Linley and Mr Demeo, no adverse findings are made against anyone identifiable in the report.

Read the full report here.