HR Compliance
Governance Matters — Especially When Nobody Is Watching
Governance Matters — Especially When Nobody Is Watching
Governance Looks Strong on Paper — But Is It?
Today, most organizations publicly champion governance, compliance, and accountability.
They publish policies, codes of conduct, procurement procedures, fraud control frameworks, workplace behaviour standards, and risk management plans. Boards and executive teams routinely tackle integrity, transparency, and compliance obligations.
Despite these efforts, governance failures persist across Australia.
By 2026, policies are rarely the problem. The problem is whether those policies are truly understood, consistently applied, properly enforced, and backed by leadership behaviour.
Many organizations seem compliant outwardly, while serious problems silently brew beneath.
This remains a top governance risk for councils, government agencies, and SMEs.
Why Governance Failures Still Occur in 2026
Modern organizations navigate ever-tougher environments.
Councils and government departments confront:
- rising community expectations
- tighter financial pressures
- increasing regulatory obligations
- workforce shortages
- cyber security threats
- procurement scrutiny
- heightened public accountability
SMEs face these common challenges:
- rising operating costs
- staffing pressures
- economic uncertainty
- increasing compliance obligations
- intense commercial competition
Under pressure, organizations can slowly normalize poor practices.
Shortcuts may replace proper processes. Oversight can weaken. Employees may avoid reporting concerns out of fear of conflict, reputational damage, or career repercussions.
Importantly, governance failures seldom start with major misconduct.
They often start with small rationalizations:
- “we need to get this project finished.”
- “everyone does it this way.”
- “it’s only temporary.”
- “the organization cannot afford delays.”
Repeated compromises eventually erode accountability, transparency, and organizational integrity.
Performance Pressure and Ethical Risk
A top governance risk in 2026 is performance pressure.
Many organizations intensely focus on:
- financial performance
- project delivery
- operational targets
- KPIs
- political expectations
- public image
While performance matters, problems arise when organizations prioritize outcomes over ethical decisions and proper oversight.
This can foster environments where employees feel pressured to:
- manipulate reporting
- ignore compliance failures
- bypass procurement controls
- avoid documenting concerns
- conceal mistakes
- protect reputations instead of addressing problems
In many investigations, warning signs appeared well before formal action.
The failure was not because of lack of information. The failure was the unwillingness to confront the problem early.
Why Councils and SMEs Remain Vulnerable
Local Government Risks
The failure was the unwillingness to confront the problem early.
- public funds
- procurement processes
- development approvals
- community services
- infrastructure projects
- regulatory functions
Even the perception of favoritism, poor transparency, weak procurement controls, or inconsistent decisions can erode community confidence.
Public trust is hard to earn and easy to lose.
Poor governance also exposes councils to:
- reputational damage
- regulatory scrutiny
- legal disputes
- workplace conflict
- adverse media attention
- loss of community confidence
SME Risks
SMEs face distinct yet equally serious governance challenges.
Smaller organizations often depend on trusted staff, informal systems, and minimal oversight.
Without strong internal controls, businesses risk becoming vulnerable to:
- procurement manipulation
- payroll irregularities
- fraud
- conflicts of interest
- financial misconduct
- cyber-related scams
- poor record keeping
In many SMEs, governance weaknesses are not deliberate. They develop gradually because operational pressures take priority over oversight.
Warning Signs Leaders Often Ignore
They develop gradually as operational pressures overshadow oversight.
Common indicators include:
- resistance to scrutiny
- poor record keeping
- inconsistent decision-making
- weak procurement controls
- lack of policy enforcement
- repeated complaints about transparency
- employees afraid to report concerns
- senior staff avoiding accountability
- excessive reliance on one employee controlling key functions
- unexplained financial anomalies
- informal approval processes
- poor complaint handling
Organizations must take these indicators seriously.
Unaddressed small issues can escalate into major organizational, financial, and reputational risks.
Governance Is More Than Compliance
Strong governance isn’t about the number of policies an organization has.
It is measured by:
- leadership behaviour
- accountability
- transparency
- ethical decision-making
- effective oversight
- consistent policy enforcement
- willingness to address misconduct
- organizational culture
Policies alone don’t build integrity. Leadership behaviour does.
Leadership behaviour delivers.
When leaders dodge tough talks, skip consistent standards, or put reputation over accountability, organizational culture can quickly decay.
Building a Culture of Accountability
Organizations that manage governance risks effectively share key characteristics.
They:
- encourage reporting of concerns
- respond to complaints consistently
- maintain strong procurement and financial controls
- review policies regularly
- provide ongoing staff training
- support independent oversight
- act early when warning signs emerge
- prioritize transparency and accountability
Strong organizations know governance is not a onetime exercise.
Governance demands constant focus, regular review, and strong leadership commitment.
Final Thoughts
Governance failures continue to harm councils, government agencies, and SMEs across Australia.
The lesson is obvious.
A policy on a shelf offers little protection without a culture of integrity, accountability, transparency, and ethical leadership.
Real governance is not about appearances.
It is about what leaders, managers, and employees do when no one’s watching.
Contact [email protected] for help in these areas.
Lack of Sleep, Poor Decisions and Rising Workplace Risk: Why Councils and SMEs Should Pay Attention
Lack of Sleep, Poor Decisions and Rising Workplace Risk
Introduction: The Hidden Cost of Workplace Fatigue
Across Australia, many workplaces still treat exhaustion as a sign of commitment. Employees who work late into the night, managers surviving on minimal sleep, and executives constantly “pushing through” are often praised for their dedication.
However, growing research suggests this culture may be creating a serious governance and compliance risk for Local Government, government agencies, and SMEs.
How Lack of Sleep Impacts Decision-Making
Lack of sleep does far more than reduce productivity. Research now links fatigue to poor judgment, inflexible thinking, impaired decision-making, and unethical behaviour.
Tired employees are more likely to cut corners, ignore procedures, make reactive decisions, and fail to properly consider the consequences of their actions. Fatigue also reduces emotional control and increases “tunnel vision” thinking, where individuals focus only on immediate outcomes rather than long-term risks.
Fatigue and Unethical Behaviour in the Workplace
Importantly, one of the first abilities people lose when tired is the capacity to reflect on the ethical consequences of their actions. This means exhausted employees are more likely to rationalise shortcuts or justify conduct they would normally recognise as inappropriate.
What begins as “just getting the job done” can quickly evolve into procedural breaches, poor workplace behaviour, or misconduct.
Governance Risks for Local Government and Public Sector Organisations
For councils and government organisations, this creates significant risk.
Fatigued staff may:
- Overlook procurement requirements
- Mishandle complaints
- Fail to maintain proper records
- Make poor decisions under pressure
- Ignore compliance obligations
In environments where accountability, transparency, and procedural fairness are critical, even small lapses can lead to allegations of misconduct, governance failures, reputational damage, or legal scrutiny.
Many investigations into workplace misconduct, fraud, corruption, and compliance breaches reveal a common factor — employees operating under excessive workload pressure and chronic fatigue.
Why SMEs Are Particularly Vulnerable
For SMEs, the danger can be even greater.
Small businesses often operate with limited staff, high workloads, and minimal internal oversight. Owners and employees frequently manage multiple responsibilities while working extended hours. Over time, fatigue can weaken internal controls and create conditions where errors, poor judgment, or even fraudulent conduct become more likely.
Common Workplace Failures Linked to Exhaustion
An exhausted finance employee may fail to identify suspicious transactions. A fatigued manager may ignore bullying or harassment complaints. An overworked staff member may manipulate records simply to keep up with unrealistic expectations.
These issues are rarely isolated incidents. They are often symptoms of a workplace culture where fatigue has become normalised.
Workplace Fatigue as a Risk Management Issue
The issue is not simply employee wellbeing — it is organisational risk management.
Businesses and councils that reward constant overwork may unintentionally be increasing their exposure to fraud, misconduct, poor workplace culture, and legal liability.
Forward-thinking organisations are now recognising fatigue as both a workplace safety issue and a governance issue. Managing workloads, encouraging healthy work practices, and reducing burnout are no longer optional wellbeing initiatives — they are essential risk mitigation strategies.
Creating a Sustainable Workplace Culture
Leaders should ask themselves an important question:
Are we rewarding productivity — or simply rewarding exhaustion?
Organisations that prioritise sustainable workloads, ethical leadership, and employee wellbeing are far more likely to maintain strong governance, effective decision-making, and healthy workplace cultures.
Conclusion: An Exhausted Workplace Is Not a High-Performing Workplace
The message for leaders is simple: an exhausted workplace is not a high-performing workplace.
It is a workplace operating with reduced judgment, weakened ethical safeguards, and increased exposure to serious organisational risk.
For Local Government, government agencies, and SMEs, managing fatigue is no longer just a wellbeing initiative — it is a critical governance and compliance priority.
Workplace behaviour and culture
Bullying, Harassment, and Misconduct
Workplace behaviour and culture go far beyond being merely human resources concerns.
These concerns centre on governance, compliance, and risk management.
These issues directly affect governance, compliance, and risk management.
- Formal complaints
- Workplace investigations
- Sick leave and workers’ compensation claims
- Staff resignations
- Unfair dismissal claims
- Legal action
- Reputational damage
- Loss of productivity
- Audit and governance issues
So workplace behaviour is a critical organizational risk—not just a personality issue.
What Exactly Defines Workplace Behaviour?
Workplace behaviour includes:
- Bullying
- Harassment
- Sexual harassment
- Discrimination
- Aggressive management styles
- Conflicts between staff
- Inappropriate language
- Misuse of authority
- Misconduct
- Breaches of the Code of Conduct
- Victimisation
- Unprofessional behaviour
These behaviours erode workplace culture and pose serious risks to the organization.
Why Workplace Culture Matters
Workplace culture is often described as:
“The way we do things around here.”
If the culture allows:
- Bullying
- Harassment
- Aggressive behaviour
- Poor management behaviour
- Ignoring complaints
- Favouritism
- Conflicts of interest
- Lack of accountability
Policies cannot resolve the issue because staff prioritise organizational culture over formal rules.
Toxic workplace culture often leads to:
- High staff turnover
- Increased sick leave
- Low morale
- Complaints
- Investigations
- Loss of staff
- Difficulty recruiting staff
- Reputational damage
Workplace culture is a governance matter, forged by the tone set from the top.
Bullying in the Workplace
Workplace bullying involves repeated unreasonable behaviour that threatens health and safety.
Examples include:
- Yelling at staff
- Constant criticism
- Excluding staff
- Setting unrealistic deadlines
- Withholding information
- Public humiliation
- Threatening job loss
- Excessive monitoring
- Misuse of performance management
- Spreading rumours
Bullying often escalates into both a WHS and HR issue.
Harassment and Sexual Harassment
Harassment encompasses any behaviour that:
- Offends
- Humiliates
- Intimidates
Sexual harassment includes:
- Unwelcome comments
- Jokes
- Messages
- Emails
- Physical contact
- Requests for dates
- Inappropriate comments
- Displaying inappropriate material
Organizations now bear a proactive responsibility to prevent sexual harassment, not just respond to complaints.
Misconduct
Misconduct may include:
- Breaches of the Code of Conduct
- Inappropriate behaviour
- Misuse of resources
- Conflicts of interest
- Fraud or theft
- Breaches of policy
- Failure to follow lawful and reasonable directions
Misconduct often sparks formal investigations.
Why These Issues Become Major Problems
Workplace behaviour issues can quickly escalate into major problems when:
- Complaints are ignored
- Managers do not act
- Managers are the problem
- There is no reporting system
- Policies exist but are not followed
- Investigations are not handled properly
- There is no training
- Leadership tolerates poor behaviour
- There are no consequences
Many major workplace investigations stem from a minor issue that was first overlooked.
What Organizations Should Have in Place
To proactively manage workplace behaviour risks, Councils, and organizations should implement:
- Code of Conduct
- Workplace Behaviour Policy
- Bullying and Harassment Policy
- Complaint Handling Procedure
- Investigation Procedure
- Training for managers
- Training for staff
- External investigator available
- Confidential reporting process
- Proper documentation
- Leadership training
- Clear consequences for misconduct
This forms a key part of a strong compliance and governance framework.
The Role of Managers and Leaders
Managers and leaders shape workplace culture in important and impactful ways.
Staff closely watch how managers act and what they allow.
When managers:
- Ignore bad behaviour
- Do not act on complaints
- Play favourites
- Bully staff
- Do not follow policy
- Do not document issues
As a result, the workplace culture will deteriorate.
Culture Flows Powerfully from the Top Down.
Final Thought
Many organizations see workplace behaviour issues as solely the responsibility of Human Resources.
They are not.
These issues touch on governance, risk management, legal matters, and reputation.
If workplace behaviour is not managed effectively, it will inevitably become:
- A complaint
- An investigation
- A legal issue
- A reputational issue
A powerful way to manage workplace behaviour is to:
- Set clear standards
- Train staff and managers
- Act on issues early
- Investigate properly
- Ensure leadership sets the right example
Remember
Workplace culture springs from influences that go far beyond formal policies.
It is shaped by the behaviour you allow.
Contact [email protected] if you need help in this area.
$90,000 Sexual Harassment Case: A Warning for Councils and Small Businesses
$90,000 Sexual Harassment Case: A Warning for Councils and Small Businesses
$90,000 Sexual Harassment Decision – What Council CEOs and SME Managers Must Learn From This Case
A recent Federal Circuit and Family Court decision has sent a very clear message to employers across Australia: failing to properly manage workplace sexual harassment and basic employment obligations can be extremely costly — both financially and reputationally.
In Mejia v Capital City Café-Bar [2026], the Court ordered a café director to pay approximately $90,000 in compensation and penalties following a sexual harassment incident involving a young employee. This case is significant because it is one of the first published decisions under the new sexual harassment jurisdiction introduced under the Fair Work Act reforms in March 2023.
For Council CEOs, senior managers, and SME owners, this case provides several critical lessons.
What Happened in This Case?
The employee, a 23-year-old migrant worker, alleged that the café director hugged her, kissed her without consent, and attempted to offer her money while pinning her against a sink.
The incident occurred shortly after the employee had raised concerns about her pay and the fact that she had not been receiving pay slips. The employee did not return to work after the incident and later commenced legal proceedings.
The Court accepted that the incident caused distress, humiliation, and ongoing emotional impact, and compensation was awarded accordingly.
However, the sexual harassment itself was only part of the problem.
The Employer’s Bigger Problem – Multiple Fair Work Breaches
What significantly increased the penalties was the employer’s broader failure to comply with basic employment laws. The Court found the director had failed to:
- Provide a Fair Work Information Statement
- Provide a Casual Employment Information Statement
- Provide pay slips
- Pay correct wages including overtime and casual loading
- Maintain proper employment records
- Make the Award and National Employment Standards available
- Provided false pay slips to the Fair Work Ombudsman
The Judge described this as a “comprehensive, if not complete, disregard for the obligations of a national system employer.”
This is a critical point for employers: sexual harassment cases often expose broader compliance failures.
Important Legal Development – New Sexual Harassment Jurisdiction
This case was brought under section 527D of the Fair Work Act, introduced under the Secure Jobs, Better Pay reforms.
This means employees now have another legal pathway to pursue sexual harassment claims — in addition to the Human Rights Commission and anti-discrimination processes.
In practical terms, this increases the legal risk for employers.
Key Takeaways for Council CEOs and SME Managers
A Single Incident Can Result in Large Compensation
The Court made it clear that sexual harassment does not need to be repeated behaviour to result in significant damages.
Many managers still believe that a “one-off incident” is less serious.
This case confirms that is not how courts see it.
Power Imbalance Matters
The Court placed significant weight on:
- The employee being young
- Being a migrant
- Having limited financial resources
- The offender being the business owner and in a position of authority
This highlights a major risk area for:
- Small businesses
- Councils
- Family-run businesses
- Workplaces where owners/directors deal directly with staff
Power imbalance increases damages.
Poor HR Practices Will Make Everything Worse
The penalties were not just for harassment — they were for systemic non-compliance.
This is where many councils and SMEs are exposed:
- No proper policies
- No training
- Poor documentation
- Incorrect pay slips
- No investigation procedures
- No HR systems
- No external investigator
When something goes wrong, these failures compound liability.
Text Messages and Apologies Can Become Evidence
The director sent messages apologising and asking the employee to keep the incident secret.
This significantly damaged his case.
Managers and business owners often try to “fix things informally” after an incident.
This can make the legal situation worse.
This Case Sends a Message About Personal Liability
Importantly, the director personally was ordered to pay penalties.
This is critical for:
- Council senior managers
- Directors
- Business owners
- CEOs
- General Managers
You can be personally liable, not just the organisation.
What Organisations Should Do Now
This case clearly shows what organisations should have in place:
- A clear sexual harassment policy
- Complaint reporting procedures
- Investigation procedures
- Manager training
- Proper wage and payroll compliance
- Proper employment records
- Access to an external investigator
- Post-investigation follow-up processes
Organisations that do not have these systems are exposed to significant risk.
Final Thoughts
This decision is a warning to employers across Australia. The combination of sexual harassment and basic employment law breaches resulted in a $90,000 outcome for a single incident involving one employee in a small business.
For councils and SMEs, the message is very clear:
If you do not have proper workplace policies, complaint procedures, and investigation processes in place before something happens, it is already too late.
Prevention, proper procedures, and independent investigations are no longer optional — they are a critical part of risk management and governance.
If you have none of these, then contact ACCA ([email protected]). I can help protect you, your business, and your employees by ensuring you have the proper policies and ensuring matters are handled properly, fairly, and legally.