Performance reporting by regulators – are we measuring and reporting what matters?

This guest editorial was written for the ANZSOG/National Regulators Community of practice monthly newsletter, highlighting new additions to the Regulation Policy and Practice collection on APO. The RP&P collection brings together a range of practical resources from national, local and state/territory governments, regulatory agencies and external institutions conducting monitoring, inquiries and reviews. You can receive this newsletter by joining the ANZSOG/National Regulators Community of Practice (membership is free) or subscribe to the newsletter directly.

By Daniel Boardman

For regulators, the idea that we should identify, define, measure and report on things that matter seems like a statement of the obvious, but – as close to 2000 registrations for recent ANZSOG/NRCoP webinars on Measuring regulatory performance and Defining and measuring our public value attested – it is never quite that simple.

While the legal framework and the policy settings of government may fill some of our performance reporting space, we still have the opportunity and the obligation to understand which indicators really matter, and to report against them. To achieve this, we need to unpack why something matters to us and how we can best explain it to our authorising environment.

Where to start?

The core purpose and objectives of regulators, as set out in their establishing legislation, is an obvious starting point which, surprisingly, is sometimes overlooked. These provide the platform and the core focus for the subsequent development and measurement of strategic objectives and operational priorities. We need to ask ourselves: is the strategy well-articulated, and does it make clear what good performance looks like? Regulators need to set out their regulatory role and intent, with clear statements of intended outcome and regulatory priorities that can be measured in a meaningful way.

By way of example, at EPA Victoria we established our organisational strategy in 2017 Our environment, Our health. The five strategic goals and associated outcomes set out in the strategy were designed to aid EPA Victoria in the transition to a new preventative model of environment protection. This led to restructuring our performance reporting framework and reviewing what and how we report internally and externally. The 2018-19 Annual Report was structured in line with the goals of Our environment, Our health to demonstrate performance in a way that reflected our planning structure and acquitted performance against our strategic regulatory objectives.

Further examples which may be of interest to NRCoP members include the Regulatory Priorities statement released in July 2020 by the recently formed Victorian Conservation Regulator and the Regulatory Strategy published by ASQA, the Australian Skills Quality Authority in response to the Rapid Review of ASQA’s regulatory practices.

Reporting what matters as well as what’s required

Regulators are required to report against a complex set of rules and guidance set by Ministers, central agencies and Better Regulation bodies – all of whom are, in effect, the ‘regulators of regulators’. At Ministerial level, Ministers set out ‘Statements of Expectations’ (SOE) which are intended to ensure regulators administer their powers efficiently and effectively and minimise regulatory burden (see EPA example, ACMA example or Worksafe example).

Performance in meeting these SOE is often reported in annual reports. It is common for jurisdictions to provide detailed guidance on reporting regulatory performance in line with what is regarded as best practice regulation. Well known examples include the Australian Government’s Regulator Performance Framework and the Queensland Guide to Better Regulation. The former, issued in 2014 for Australian Government regulators, sets out an approach to measuring performance which includes outcome based KPIs, regulatory performance measures, self-assessment criteria and external reviews. As a major regulator, the ACCC’s Performance Report provides some 80 pages of metrics and commentary against the framework. The Hon Ben Morton MP’s October 2020 speech to the Business Council of Australia [The Morrison Government’s Deregulation Agenda )] foreshadows even greater attention to measuring, benchmarking and evaluating regulator performance, and streamlining and consolidating performance reporting at a whole-of-Government level. On the Better Regulation side, Victorian regulators are guided by Better Regulation Victoria Queensland regulators by the Office of Best Practice Regulation and NSW regulators by the work of the Commissioner for Productivity [NSW Regulatory Policy | Better Regulation | NSW Commissioner For Productivity].

Which still leaves all of us to answer the question: how do we not only acquit our formal obligations but also connect meaningfully with our stakeholders and ensure they can engage with our performance story?

Annual reports and performance statements are often not prepared in a way that is engaging for a reader. They serve their purpose in assuring parliaments, governments, and ministers that the purpose and objectives are being met and public funds are being appropriately spent. But as regulators, we could benefit from thinking more deeply about how we connect with stakeholders in engaging and innovative ways if we want to demonstrate that our performance really matters.

Daniel Boardman is Manager of Strategic Planning and Performance with EPA Victoria. Daniel has worked for regulators in Australia and the United Kingdom for over 20 years in compliance and enforcement, consumer codes, regulatory and competition policy and regulatory strategy and performance. The views expressed in this article are the author’s alone.