John Brogden explains the rationale behind the Australian Institute of Company Directors’ reform agenda, which calls for a greater long-term focus in a bid to stimulate economic growth.
A blueprint for growth
Over the last six months the Australian Institute of Company Directors (AICD) has actively sought to widen our approach on policy and issues affecting directors today and into the future. As the gold standard of governance in Australia, we need to engage in a wider national conversation on public policy issues.
In March, we released Governance of the Nation: A Blueprint for Growth (the Blueprint) the AICD’s policy prescription for the national agenda.
At the launch our chairman Elizabeth Proust said: “The AICD has a diverse membership of nearly 38,000, collectively responsible for millions of jobs and billions of dollars across the economy. We can either run with a narrow agenda, or attempt to have a role in the broader debate about issues for the governance of the country in the medium to long term. We’ve chosen to do the latter.”
Informed by member insights over the last 12 months through our regular Director Sentiment Index, consultation with our division councils and policy committees, the Blueprint seeks to set an agenda for political leaders based on principles of good governance:
- A focus on the longer term, avoiding short-term decision-making.
- Creation of long-term value, for the nation and our community overall.
- Strategy and vision to benefit all stakeholders.
As all directors know, long-term decisions that deliver growth and build value are at the heart of good governance. The Blueprint sets out a plan for long-term growth with recommendations in six key areas. We have kept our focus on a limited set of policies that we believe can be addressed over the next two years:
- Reforming national governance: Calling for fixed, four-year terms for the federal government and reforms to the Council of Australian Governments (COAG) process.
- Fiscal sustainability: Calling for spending reforms to return government expenditure as a percentage of GDP to pre-GFC levels, and tax reform to promote economic growth, improve fairness and increase competitiveness.
- Innovation and entrepreneurialism: Calling for a bipartisan policy agenda to lift Australia from “lag” to “lead” in global innovation, education and skills reform and review of current regulatory settings that encourage risk aversion.
- Partnership with not-for-profits: Calling for five-year funding cycles for the NFP sector and national harmonisation of regulatory settings.
- Human capital: Calling for a boost to female workplace participation to grow GDP and reforms to simplify the industrial relations framework and improve its governance.
- National infrastructure: Calling for a 15-year infrastructure plan with project reporting, benchmarking and governance, and asset recycling to support new investment.
As the gold standard in Australia, we need to engage in a wider national conversation on public policy.
The AICD brings a unique perspective to the challenges facing our nation. If adopted, these reforms will ensure Australia is more prosperous, successful and innovative than it is today.
And why does good governance of the nation matter? Why should the AICD be buying in on this agenda? Look no further than the shambolic COAG meeting in April.
Last month’s COAG meeting was, after years of drifting into irrelevancy, its natural expiration. It marked an unfortunate chapter in the poor governance of the nation. Australians should be angry over the failure of their governments to work together. Australians want their governments to govern efficently and effectively.
The consequences of the breakdown of our federation cannot be underestimated. The system has become a confused, duplicated and irresponsible mess of public administration that needs urgent repair to address issues that are vitally important to our community.
Our Blueprint proposes to reinvigorate COAG with a 15-year reform agenda that is accompanied by full and independent reporting of COAG’s priorities and performance against hardwired reform targets as well as the appointment of an independent chair and secretariat to oversee the reform process. A robust COAG that engages in real debate and compromise would help in resolving important issues which are now caught in a continuous loop of debate with little hope of resolution.