Last week I was fortunate enough to attend the AICD Australian Governance Summit in Melbourne. There were lots of great speakers sharing their perspectives on the governance issues facing Australian organisations that need to be considered and discussed at board level.
The most talked about topics included;
· Artificial intelligence
· Labor shortages
· The economy and inflation
· Climate and ESG
· The geopolitical context
· The role and responsibilities of Directors
How many of these topics have been taking space in your leadership forums lately? How is your business or organisation responding to both the risks and the opportunities posed by these issues?
My key take aways from the summit were:
1) Directors have well and truly shifted their focus from profit to purpose.
It was encouraging to hear multiple speakers refer to their responsibilities to all stakeholders and not just creating profit for shareholders. Speakers regularly articulated the purpose-driven company as one that adds value across the whole stakeholder network including people, customers, government, regulators, suppliers, communities, the environment, and shareholders. This idea is now more than a responsibility, it is prevailing zeitgeist.
In a particularly inspiring session on the Board’s role in Reconciliation, Justin Agale, First Nations Sector Lead for the AICD shared that “First Nations peoples are the solution”. He reminded us that what corporate Australia call “ESG”, First Nations peoples call “Looking after country”, something they’ve been doing for thousands of years. Cooperation with First Nations people of the land which our businesses operate is not just the right thing to do, it’s the prosperous thing to do.
2) Directors are educating themselves about cybersecurity
Hamish Hansford from the Department of Home Affairs warned there is one cyber threat every seven minutes in Australia! It is expected that Directors stop thinking that cybersecurity is an IT problem; and see it as a governance and leadership problem. Dr Jane Lute, Former Deputy Secretary, US Department of Homeland Security mentioned there is an “unacceptable degree of cyber illiteracy” amongst directors. Her advice was to be radically honest about what you don’t know and go on a program of inquiry to put best practice, into practice.
3) Attraction, retention and reskilling are everyone’s responsibility
Lawrence Goldstone, Lead Partner at PwC Australia shared that currently 300 job vacancies at PwC alone. Attraction, retention and reskilling are the the remit of the P&C leader, but with labour shortages and changing workforce trends, people and culture issues extend beyond the leadership group to the board level.
Wages are no longer the only attraction strategy. People are being more discerning. Directors were encouraged to consider their full EVP (employee value proposition) including pay, wellbeing, investment in career-based learning, benefits, hybrid and flex policies. Companies are also re-imagining how their work environment and space is utilised.
4) The board is a team, not a group
David Gonski AC shared his lessons learnt from 40 years as a professional company director. It was his categorical view that “a board must be a team” and that “group performance is something we don’t spend enough time on cultivating and improving”.
It is not enough to just have the right skillset on the board; it is equally important to work on the board dynamic and how those individuals bring rigorous independent curiosity whilst also leveraging collective intelligence. He warned that “without respect and trust, there’s a danger of unpleasantness and suspicion, and that the debate, rather than assist the company, becomes those wishing to be the standout at the meeting.
David Gonski strongly advocates for board appraisals by an outside party, seeing the appraisal “squarely as looking at the team as a whole, not particularly at each individual member”.
5) Diversity of attendees
Besides the range topics discussed – it was inspiring to observe a large proportion of women at the event and on-stage. Whilst this goes a long way to encouraging diversity of thinking – we still have a ways to go in gaining full representation at Director level of our Australian communities. It would be great to see more people under the age of 50, more First Nations peoples, people from the LGBTQI community, and those with disabilities, represented both in the audience and on-stage in the future.