An independent review of Lane Cove Council’s governance procedures has found no evidence of systemic governance failure, but rates the organisation’s governance maturity between “Foundational” and “Documented”. Foundational is the lowest of the five stages on the reviewers’ maturity scale.
The Governance Health Check, prepared by Morrison Low Advisory (MLA), will be discussed by councillors at the October Ordinary Council Meeting on 22 October 2026.
It concludes that Lane Cove Council has historically relied on “capable individuals, informal practices and organisational knowledge” rather than integrated governance systems, and it sets out 47 improvement actions to be rolled out over four years.
Lane Cove Council staff are asking councillors to vote on a recommendation that the General Manager prepare an annual action plan outlining which of the 47 actions will be prioritised each year.
At a Glance
- An independent review by Morrison Low Advisory found no evidence of systemic governance failure, but placed Lane Cove Council at the lowest stage of a five-stage governance maturity scale.
- Gaps include out-of-date policies and delegations, no legislative compliance register, a risk register without mitigation actions or fraud risks and no complaints policy aligned to the NSW Ombudsman model.
- The report draws on the NSW Ombudsman’s Pottery Lane investigation, pointing to governance problems from Council acting at once as owner, co-developer, regulator and Building Management Committee member.
- MLA recommends 47 improvement actions across seven programs, sequenced over four years to 2029.
- The review cost $49,235 (ex GST). Implementation costs are described as “substantial” but have not been quantified.
- Councillors will consider the report at the Ordinary Council Meeting on 22 October 2026. The public forum is on Monday 19 October at 7pm.
Why was there a governance review?
At Lane Cove Council’s February meeting, councillors unanimously resolved to commission a governance health check. The resolution asked for an assessment of governance structures, benchmarking against best practice and practical recommendations.
It also asked the review to cover prior governance recommendations made by Lane Cove Council’s Audit, Risk and Improvement Committee (ARIC) and “any relevant oversight authority”, and to assess whether the controls put in place in response had worked.
MLA benchmarked Lane Cove Council against the NSW Audit Office’s Governance Lighthouse, which sets out eight principles and 17 components of public sector governance.
MLA reviewed Lane Cove Council documents and interviewed all councillors, the General Manager, the Executive Leadership Team, managers with governance roles and all independent ARIC members, including internal audit.
Interviewees were promised confidentiality, so findings are reported by theme. Draft findings went to a workshop of councillors, ARIC members and senior staff on 31 August.
The review cost $49,235 (ex GST), funded from the 2026/27 budget.
The findings
MLA places Council on a five-stage maturity scale running from Foundational (ad hoc and developing) through Documented, Embedded and Integrated to Leading.
Lane Cove Council “does not reach the threshold for Documented”, the report notes, because some foundational elements are missing or out of date.
Those gaps include:
- policies not reviewed by their scheduled review dates
- delegations that are not current or published on Council’s website
- no refresher Code of Conduct training for staff after induction
- Public Interest Disclosure Officers drawn only from governance and management roles
- no legislative compliance register or policy
- a risk register without mitigation actions, and without fraud and corruption risks identified
- no complaints handling policy aligned to the NSW Ombudsman model, and no Unreasonable Complainant Conduct policy.
A recurring theme was that governance “remains dependent on the knowledge, capability and commitment of key individuals”, a concern raised particularly by ARIC members and staff.
The report describes this as symptomatic of an ad hoc approach, and notes governance resourcing at Lane Cove is likely lower than at other councils.
The review lists five strengths:
- commitment from the General Manager and executive
- solid foundations in finance, internal audit and governance policy
- positive momentum
- an effective ARIC
- supportive councillors.
Most councillors told the consultants governance had improved significantly in the past six to 12 months.
Compliance: the weak point
A 2026 internal audit of budgeting, cost control and management reporting rated Council “Good”, with one medium-rated and two low-rated findings.
Councillors, ARIC members and staff all expressed confidence in the finance team.
The audit still recommended formalising budgeting procedures, which have evolved “without being formally documented”, reporting financial results to the executive and councillors more often, and reducing reliance on manual controls until the current financial system is replaced.
Budget ownership below director level is also flagged as underdeveloped.
Legislative compliance is where ARIC members were most critical. They told the review that the absence of systematic compliance reporting, an obligations register and structured assurance limits the Committee’s ability to be confident obligations are being met across the organisation.
Staff attributed delays in policy reviews, legislative updates and documentation to limited governance resources and competing priorities rather than a lack of commitment.
The recent creation of an in-house legal function was described as a significant improvement.
Major projects
Major projects featured prominently in councillor interviews.
Councillors credited Council with delivering significant infrastructure, but cost escalation, changing scope, governance of long-term contracts and limited visibility of project risks were recurring themes.
The 2026 internal audit found Council had no consistent project governance model, no formal project management framework, no organisation-wide project register and no defined executive oversight arrangements. Project governance had been applied “pragmatically rather than through standardised organisational processes”, relying on experienced individuals.
Pottery Lane Ombudsman investigation
The report draws directly on the NSW Ombudsman’s investigation into the Pottery Lane development. In the Cove has been covering this issue since 2023, when NSW Fair Trading issued Lane Cove Council a rectification work order for the building, followed by a second order in 2024. You can also read our article on the Ombudsman’s investigation here.
Although the Ombudsman’s investigation concerned fire safety compliance, MLA says its findings point to governance deficiencies arising from Lane Cove Council acting at once as owner, co-developer, regulator and member of the Building Management Committee.
The Ombudsman said the investigation highlighted the need for councils to have “strong administrative and compliance systems” to manage conflicts of interest when they own, develop and regulate the same development. The question remains: should Lane Cove Council have been a property developer?
MLA’s conclusion is that project governance must continue after the ribbon is cut, so that ownership obligations, statutory compliance and regulatory independence are clearly allocated for the life of the asset. It notes Council has already begun developing a scalable project management framework.
Rebuilding trust between councillors and staff
The report’s frankest passages concern the relationship between councillors and the administration.
The strongest theme from councillor interviews was improved culture since the change in leadership, with most describing the relationship as more respectful, collaborative and transparent than before.
But many councillors said trust is still shaped by experience and will take time to rebuild.
Several staff acknowledged that legitimate councillor requests for information or oversight had at times been perceived as “operational interference or micromanagement”.
MLA frames this as a “Governance Trust Cycle”, drawing on organisational behaviour research. Reduced trust prompts more scrutiny from councillors; staff respond defensively and filter information; councillors read that as a lack of transparency, which increases scrutiny again. The report stresses this is “not necessarily the result of poor intent by either party”.
The idea is not simply to encourage more trust, but to fix the mechanisms behind it: clear roles, agreed decision-making protocols, timely and complete information to councillors and consistent behavioural expectations. Several interviewees also lamented the loss of informal workshops and briefings following legislative changes.
A 47-action roadmap to 2029
The 47 actions are grouped into seven programs:
- leadership, culture and accountability
- organisational assurance and compliance
- strategic planning, risk and performance
- governance information and reporting
- project governance
- councillor and governance capability
- continuous improvement.
They are sequenced across four windows timed around a current staff restructure and the 2028 local government election.
| Window | Timing (approx.) | Focus | Actions |
|---|---|---|---|
| 1. Organisational Transformation | Now to June 2027 | Foundations for the new structure | 11 |
| 2. Governance Maturity | July 2027 to March 2028 | Compliance, assurance, risk and project governance | 14 |
| 3. Councillor Transition | April to December 2028 | Induction, protocols and councillor–executive relationships | 14 |
| 4. New Council | From January 2029 | Review through the new Community Strategic Plan | 8 |
First priority actions include an organisation-wide legislative compliance framework, risk register treatment actions and fraud risks, a financial management and budgeting procedure, monthly financial reporting to councillors, a review of the procurement governance framework, complaints policies aligned to the Ombudsman model and a customised ICAC corruption prevention workshop for councillors, ARIC and executives.
Later actions include a legal matters register reported to ARIC and Council, a policy for overseeing and managing the General Manager, a Major Project Governance Framework with gateway decision points, independent health checks on major projects and more Public Interest Disclosure Officers across the organisation.
The report also recommends reviewing Council’s Management Directives as policies, procedures or guidelines “to reflect a less command and control culture”.
MLA warns that staff have already expressed concern about the pace of change. The roadmap is “a guide to sequencing and prioritisation, not a fixed delivery contract”, it says, and rigid adherence to timeframes risks poor outcomes.
The report notes:
“Ultimately, the objective is not to implement every recommendation as quickly as possible, but to implement the right initiatives at the right time in a way that can be sustained by the organisation and deliver lasting improvements in governance maturity. It is also intended that attention be given to the quality of the implementation of each action beyond compliance to continue to develop governance capability and ethical culture at Lane Cove Council.”
What councillors will vote on
Under the recommendations, the General Manager will prepare an annual action plan, select roadmap actions and assign responsible officers, with prioritisation reflecting resourcing and budget. Each plan and quarterly updates would go to ARIC, and to councillors via the Councillor Bulletin.
The Lane Cove Council officer’s report to the October meeting notes implementation “will have substantial resourcing and cost implications”, but puts no figure on it. Costs will be considered when each annual plan is prepared.
Some of the questions locals may want to ask at tonight’s forum:
- With “substantial” implementation costs flagged but not quantified, how many of the 47 actions will be funded in 2026/27?
- How much have the Pottery Lane litigation and the actions required by the Ombudsman cost Lane Cove Council?
- The MLA roadmap calls for quarterly governance and compliance reporting to Council. Will residents be able to track progress?
The full report is attached to Item 12.3 in the business paper on Council’s website, and you can read the report here.
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