Appointments to the ABC board must be transparent and directors should have media experience, a Senate inquiry into allegations of political interference has recommended.

The inquiry, which was established by the Greens, Labor and the crossbench late last year after the crisis that led to the departure of the managing director, Michelle Guthrie, and chairman, Justin Milne, found that the appointment process “should incorporate higher standards of transparency and accountability”.

Guthrie alleged Milne had told her to sack ABC journalists – including Emma Alberici and Andrew Probyn – whom the government didn’t like.

The report tabled on Monday afternoon recommends the prime minister consult the leader of the opposition during the nomination process, to prevent political appointments.

Milne was a friend of the former prime minister Malcolm Turnbull, and several of the board’s directors were appointed by bypassing the independent nominations panel.

The committee heard that provisions in the ABC Act “enable the government to exert political influence” by ignoring the recommendations of the panel.

The appointments of Donny Walford, Vanessa Guthrie and Joseph Gersh were ministerial appointments by Mitch Fifield, and the new chair, Ita Buttrose, was chosen by Scott Morrison.

“The committee expresses grave concern that, notwithstanding the events of 2018 and this contemporaneous inquiry, the prime minister has chosen to make yet another so-called ‘captain’s pick’,” the report said.

The Greens made further recommendations, including fully restoring the $340m in funding the Coalition has cut since 2014; ensuring funding for overseas broadcasting is given to the ABC and not commercial broadcasters; and a transition from triennial funding to a five-year funding cycle to give the broadcaster more stability.

The Greens senator Sarah Hanson-Young, who chaired the inquiry, said it was clear the ABC had been “under pressure from political interference and funding instability”.

“The Morrison government has the opportunity to lock in funding for a five-year period and restore what has been cut in this week’s budget. Anything less is a kick in the guts to the millions of Australians who love and rely on the ABC.

“This inquiry has shown that the ABC is seen as the government’s plaything, when in fact it is owned by the Australian people. It is heartening that ABC staff stood up for the organisation’s independence, warding off political interference attempts. But they should be able to do their jobs, without fear or favour.”

The broadcaster’s acting managing director, David Anderson, told the committee’s public hearings the current funding arrangement meant the broadcaster was vulnerable to the whims of whatever government was in power.

The committee heard Milne displayed a lack of understanding of his role as chair.

“Nobody has told me that I’m supposed to be a wall,” Milne told Four Corners after he resigned. “I think, more what I’m likely to be is a conduit … It’s necessary, and I think it’s the role of the board to be a conduit so that the left hand knows what the right hand is doing.”

But the committee heard from a group of former staff, ABC Alumni, that the ABC “is not ‘the left hand’ of the government as Mr Milne implies”.

The report is critical of the board’s response to Guthrie’s presentation of a dossier days before she was sacked in which she documented the disintegration of her relationship with Milne.

“The committee is astounded that the ABC board did not make further inquiries – both before and after presentation of the dossier – about the source of this tension that was so clearly impacting the corporation and which clearly could have, and did, jeopardise the independence of key personnel.”

The committee heard evidence that the ABC’s complaints handling process was being misused and senior ABC staff were “routinely handling complaints from politicians and/or their offices”.

ABC Alumni told the inquiry the pressures on staff had made them more timid.

“The strain of treading a line between the charter requirements … and making do with increasingly less funding, combined with the need for consequent staffing losses and diminished resources for program-making, have taken a heavy toll. Such an environment can breed timidity because of the apparently well-founded fear that giving offence to government might result in further assaults on the ABC’s independence, funding and functions.”