That work is a cornerstone essential to fulfilling our mission “to be the independent and trusted voice of governance, building the capability of a community of leaders for the benefit of society”. We have received hundreds of submissions covering the four areas of focus — standards and professionalism, directors’ duties and stakeholders, accountability, and culture and remuneration.
I want to thank each of you who has made a contribution. Our members are leaders in their organisations and in the community, across every industry and every sector. Your expertise and experience are vital in helping the AICD develop an agenda that will set the standards for governance.
It is clear that government, regulators and policymakers are contemplating the actions they should take in response to the Hayne Royal Commission. For example, in April the federal government commissioned the Australian Law Reform Commission (ALRC) to conduct a review of corporate criminal responsibility.
In this environment, it is imperative for the AICD, as the voice of governance, to lead a measured and informed discussion, engaging with stakeholders and counselling against overreach.
It is imperative for the AICD, as the voice of governance, to lead a measured and informed discussion, engaging with stakeholders and counselling against overreach.
In parallel with the consultation, we conducted a series of member events in every state and territory capital on the governance issues that have been posed by the financial services Royal Commission. These events featured an expert panel of experienced directors discussing the implications of the Royal Commission.
For the AICD, having more than 800 members attend was not just about the insights from the Royal Commission, it was also an opportunity to answer your questions about what we are doing and to hear what we need to do as a director organisation.
There was a clear consensus across the country that as a director community, we need to hold ourselves to a high standard, and that the AICD’s role is crucial in enabling this.
I outlined in this column last month some of the tough but important questions we have been asked — whether we have taken the call for boards to do better on culture seriously enough, and whether we need to set higher standards for membership. We welcome these questions and many of them featured in the consultation paper.
From the feedback through the consultation process and member events, we will develop streams of work to formulate stronger policy and practice approaches. In some cases, we will move forward directly to meet the needs of members; in other cases, in the course of exploring an issue further, we may seek member input and feedback to develop actions that AICD as an organisation will take. I urge you to stay engaged throughout the course of this work.
At the same time as we work on the forward governance agenda, we continue to support members with their current challenges. We are developing tools that will help boards oversee organisational culture. We are consulting with not-for-profit directors, as we do every year, through the NFP Governance and Performance Study. We are exploring how we can help directors understand and drive innovation. We are developing programs to support Indigenous directors. We are advocating to government for sensible policies that will drive growth and assist boards in their work.
The issue of director liability will remain a high priority for the AICD. We will be a strong and consistent voice resisting efforts to improperly impose liability (especially criminal) upon honest and diligent directors. The ALRC inquiry will be a key focus for us during the remainder of 2019. With higher penalties and more litigious regulators, it will be important that policy settings strike the right balance between corporate and individual liability.