This month, the Diligent team attended the Governance Institute of Australia’s (GIA) National Conference in Sydney. Over two days, conference attendees hear from a panel of speakers and panelists-including company secretaries, board members, CEOs, regulators and technologists-each touching on the role of boards and governance professionals.
As today’s digital landscape grows more complex, the most effective boards are focusing on the fundamentals. Board composition, diversity, and board assessments remain center stage, as it’s never been more important to have the right people in the boardroom. “Defining your company purpose” made an appearance in nearly every panel discussion, with each one underscoring that company purpose should be the cornerstone for all board activity. As organizations transition into this era of modern governance, company secretaries are largely responsible for meeting new challenges with creative solutions—not binding themselves to the traditional boundaries of their role.
From the two-day conference, we’ve compiled our notes into three key themes, which we believe will characterize the governance landscape as we head into 2020.
- Organizations Without a Purpose Will Soon Find Themselves Obsolete
At the beginning of 2018, BlackRock CEO Larry Fink published his annual letter to CEOs and called on all organizations to identify their social purpose—a call-to-action that many shrugged off as soft and immaterial. Fast-forward 18 months, and company purpose is acknowledged as the bedrock of all board activity, particularly strategy.
“An effective board sets the company’s purpose and builds a strategy around it.”
– Sir Winfield Bischoff, chairman of JP Morgan Securities and the UK Financial Reporting Council
In his keynote session, Sir Winfield Bischoff explained that company ESG exercise is not just ESG exercise, but it should be the best practice lead us to achieve our long-term goals?). And this task of defining company purpose is just as pivotal for non-listed organizations as it is for public entities.
The conference discussions were timely as company leaders all over the world are committing to a more stakeholder-centric approach. “Companies with a clear purpose find it easy to engage with their employees and with the public,” said Bischoff. The organization is putting in place, but on the outcomes of those policies.
- Governance Systems Must Evolve in the Face of Digital Disruption
“The sand is shifting under our feet,” said GIA CEO Megan Motto , as she characterized the level of change and disruption occurring today. The global political landscape is tumultuous and uncertain. Companies that fail to innovate are almost enough-or fail to understand the needs of a rising generation of customers-and will soon find them irrelevant.
Eugen Crouch , a board member with Westpac, BlueScope Steel, and Corporate Travel Management, explained that they are coming to the forefront of the purview: technology disruption, misconduct, flaws in company culture. “The question is, do boards have the right compliance frameworks in place to detect these early-warning signals?” Said Crouch. Company secretaries have an opportunity to evolve their governance frameworks and put the right information at the board’s fingertips (an integral part of modern governance ).
“Today’s governance professionals must understand the role that people play in systems. In today’s ecosystem, everything’s connected to everything else. And you can not separate the quality of your system from the quality of your culture. “
– Peter Varghese AO, chancellor of the University of Queensland and board member with AMP and North Queensland Airports
More Resources on This Topic:
- Governance in the Digital Age
- Governing Through the Fog: Corporate Director Perspectives on Political Uncertainty
- The Corporate Director Podcast (Episode 5 with Pamela Coles, Company Secretary for Rolls Royce)
- Governance Professionals Must Evolve Their Own Roles
Eighty-three percent of governance professionals expect their role to change over the next five years-a finding from a recent report, The Future of the Governance Professional , conducted by the GIA, Diligent, and Lexus Nexus. Key factors driving the change? (1) Complexity of the business environment. (2) Regulatory changes. (3) Technological Disruption. While these trends represent “big challenges ahead,” they are “becoming a significant opportunity for today’s governance professionals to expand their roles in impactful ways”.
“You may feel like you’ve been put in a certain box with narrow expectations. How are you delivering new insights to the boardroom? How are you building your business with the CEO and chairman? How are you reframing yourself as a trusted advisor and a coach? “
– Alison Watkins , Group Managing Director of Coca Cola Amatil
The new report predicts a fundamental shift in the company secretary’s role-from minute-taker to thought leader, from secretary to trusted advisor, from informing to stimulating questions. Moderator TK Kerstetter , host of the soon-to-launch Inside Australia’s Boardrooms, left conference attendees with some parting advice: “You may have to create your own opportunities, and you may not be afraid to do that.”
At the conference, Diligent kicked off filming for its new web show, Inside Australia’s Boardrooms, which will air its first episodes in Q4 2019. Hosted by TK Kerstetter, this new program will mirror its American counterpart, Inside America’s Boardrooms , delivering 10-minute episodes with board members and governance professionals on timely topics. Stay tuned!
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