At this year’s annual summit highlighted the need to focus on diversity and address short-termism in boardrooms for the good of businesses and the country as a whole.
Last month we organised the largest gathering of directors and governance professionals ever held in this country at the inaugural Australian Governance Summit.
This will now become an annual feature of the Australian Institute of Company Directors’ (AICD) calendar in the first week of March. In 2017, the summit will be held at the Melbourne Convention Centre on Thursday 2 March and Friday 3 March. Our objective is for the Australian Governance Summit to be the premier governance event in Australia. With our members’ support we are well and truly on this path.
Our chairman, Elizabeth Proust AO FAICD, welcomed delegates in her address, drawing on her own experience in boardrooms. She reiterated the AICD’s goal of ensuring that by the end of 2018, at least 30 per cent of all directors on ASX 200 boards are female, stating, “greater board diversity is known to encourage robust debate, foster creativity and limit the risk of group think that is inherent when individuals from similar backgrounds dominate a board.”
The 1000 delegates heard from leading directors and governance experts including the 2016 Australian of the Year, Lt Gen David Morrison AO (Rtd), on the challenges of diversity within our boards and the need to increase female representation at the highest levels. He shared, with typical passion and charisma, the lessons he learned when confronting a culture of exclusivity rather than inclusivity in the Australian Army.
Another highlight was the address by David Gonski AC FAICDLife, who spoke on directing for performance. His insights drove debate throughout the summit. He focused on short-termism and joined the AICD in asking the question: are we managing for the short- or long-term?
In my address I spoke of the need for company directors to display strength and leadership in the face of excessive short-termism, a scourge of the modern boardroom.
Directors creating and nurturing the right culture is crucial to an organisation's success .
I also highlighted corporate culture as an issue that has been brought to the fore by the Australian Securities and Investments Commission, as it seeks to deal with the fallout from various scandals at financial institutions. The AICD believes that directors creating and nurturing the right culture is crucial to an organisation’s success and can mitigate against ill-considered shortsighted behaviour.
Former NSW Premier the Hon Nick Greiner AC FAICDLife and former Victorian Premier the Hon John Brumby advocated the need for fixed parliamentary terms at the federal level to guarantee governments have appropriate time to develop, propose and enact true reform. They further explored the idea of an independent Coalition of Australian Governments’ secretariat that prioritises medium- to long-term agendas. We further explored the connection between government and the corporate sector with Graham Bradley AM FAICD and Christine Hawkins FAICD discussing how the sectors can work together to deliver policy for the long term and how government can learn from business.
As the Summit showed, excessive short-termism is an issue for Australia’s top companies and a significant public policy issue for the nation.
In March, we released our proposals for national reform, Governance of the Nation – Blueprint for Growth.
The blueprint sets out the six key areas for reform that our members have consistently identified as priority issues over successive years of the Director Sentiment Index:
- Governance of the nation
- Fiscal sustainability
- Fostering a culture of innovation
- Not-for-profit engagement
- Human capital
- National infrastructure
The blueprint sets out our advocacy agenda over the next two years and can be read in full on our website.