What you need to know: Lobbying activity by directors

Lobbying, conflict of interest and your obligations under the Code of Conduct

The Code of Conduct for Directors of Victorian Public Entities (the Directors’ Code) sets out your integrity obligations.

As a board director, you must:

act in good faith in the best interests of the public entity (item 3.5)
only use your position to promote the best interests of the public entity (item 3.6)
only use the information you gain in the course of your board duties for its intended purpose (item 3.7).

You must also comply with the obligations in the Directors’ Code in relation to conflict of interest (3.12):

where possible, you should avoid conflicts of interest
if a conflict of interest arises (actual, potential or perceived), you must declare the conflict so that it can be managed by the board in the public interest in accordance with the board’s policy.

In addition, item 3.13 of the code imposes extra conflict of interest obligations in relation to past or current lobbying activity by board directors.

You should make yourself aware of the definition of a ‘lobbyist’ under the Lobbyist Code of Conduct and note the requirements on government representatives.

A few things to note about board directors and lobbying:

‘lobbying activity’ is a specifically defined term in the Victorian Government Professional Lobbyist Code of Conduct. It means any contact with a government representative, in an effort to influence Government decision making
a ‘lobbyist’ is defined as someone who conducts lobbying on behalf of a third-party client, or whose employees conduct lobbying activities on behalf of a third-party client, on a paid or unpaid basis. This definition should be read together with that of ‘lobbying activity’ above
if you are a board director or a statutory appointee you are a ‘government representative’ (as a person engaged by a public sector body) under the Lobbyist Code of Conduct
if you are acting on behalf of the public entity that you are a board director of, you will not be captured by the definition of ‘lobbying activity’.

This means that it will not be considered lobbying activity if you:

are a board director or statutory office holder covered by the Directors’ Code, and
are acting in your role as a director (performing official duties on behalf of the public entity board) in making contact with a government representative in an effort to influence Government decision making.

What obligations apply to current and previous lobbying activity?

The following obligations apply to board directors. They also apply to any of the board’s committees and sub-committees.

Current lobbying activity

Due to the high risk of conflict of interest inherent in lobbying activities conducted by directors, item 3.13 includes the extra requirement that:

you must not engage in any lobbying activity (including activities undertaken in other jurisdictions) that may relate to the functions of the public entity
you must confirm at the start of each board meeting that you are not engaged in any such activity.
You also would be required to declare current lobbying activities under the Declaration of Private Interests form.

Previous lobbying activity

Item 3.13 also includes an extra requirement that if you were previously engaged in lobbying activity that may relate to the functions of the public entity (including activities undertaken in other jurisdictions) this must be declared as soon as practicable.

This applies whether you engaged in the lobbying activity:

prior to your appointment to the board, or
prior to the commencement of item 3.13 on 1 March 2024.

If you have previously engaged in lobbying activity that relates to a matter on the board’s meeting agenda, you must declare this at the start of the meeting (even if the interest has previously been declared). You may also be required to declare this under the Declaration of Private Interests form.

Can I make representations on behalf of a public entity board that I am a member of?

Yes. As a director of a public entity, you are required to work in the best interests of that entity.

Part of your duties as a board member may require you to make representations to government officials, including the relevant Minister.

This is not lobbying. Consequently, it does not need to be declared.

Example – representations not lobbying

Performing your official duties as a member of a public board is not lobbying.

For example, it is not lobbying activity to:

engage with government representatives when needed to make representations on behalf of the public entity board:
- on matters relating to the objectives, functions and powers of the entity
- consistent with your duties as a board member.
maintain a direct and effective relationship with the minister (usually through the chairperson) and with other key stakeholders as designated by the board – item 2.1
ensure information is provided to the Minister and department in accordance with the requirements of the Public Administration Act 2004, the Directors’ Code and any relevant establishing documentation.

In addition to my role as a public board director, I sit on another board. How do the lobbying restrictions affect me?

If you also sit on another board, whether public, private or not for profit, you have a duty to another organisation. This is a private interest that may sometimes give rise to a conflict of interest.

As a board director of a public entity, you must avoid conflicts of interest where possible. If a conflict occurs, you must declare the conflict to the board at the earliest possible opportunity, which will determine how the conflict will be managed in the public interest (item 3.12).

For example, if part of your board duties for the other organisation are to engage in lobbying activity on behalf of that organisation and these lobbying activities may relate to the functions of the public entity on which you also sit, there will be a strong a conflict of interest.

The Directors’ Code prohibits you from engaging in any lobbying activity (including activities undertaken in other jurisdictions) that may relate to the functions of your public entity (item 3.13).

There are a range of options for managing the conflict depending on how significant it is. The public entity board may determine that the conflict is so strong that it is unmanageable unless you:

relinquish your private interest
resign or stand down on a temporary basis from the other organisation to which you have a duty
resign from the board.

If you are the board director chosen by your board to represent it on a peak body, your actions in representing your public entity form part of your duties as a director of the public entity.

Therefore, you will not be captured as falling within the ‘lobbying activity’ definition outlined in item 3.13.

If you are independently a board director on a peak body you will need to manage this in line with your conflict of interest obligations to your public entity board.

In representing your public entity, you must always act in good faith in the best interests of your public entity (item 3.5).

For example, if the peak body proposes a decision that is not in the best interests of your public entity:

you would need to vote ‘no’ to any such decisions (to act in accordance with the best interests of your public entity)
you must declare the conflict to your public entity board at the earliest possible opportunity
your public entity board will need to deal with the conflict of interest that arises, and
your public entity board can decide whether or not on balance it is best to have you remain on the board of the peak body as a representative of your public entity’s interests.

Further information and advice

If you’re unsure if other work you or are involved in is considered lobbying activity, you should:

discuss with your board chair, secretary or other board members
seek advice from your portfolio department.

If you remain uncertain you can contact the Victorian Public Sector Commission at integrity@vpsc.vic.gov.au.

Governance

Updated 16 April 2024