A bitter US election contest was determined in November, but an orderly transition has been frustrated as the outcome was contested. COVID-19 vaccines are being administered against a backdrop of an outbreak in NSW, surging cases in Europe and a mutating virus. The extent of a Russian cyberattack against US companies and federal agencies is undetermined, as globally we continue to embrace technology that allows us to “work from anywhere”. Australia’s relationship with our largest trading partner remains fraught, as the EU and China sign an investment agreement and the New York Stock Exchange begins delisting Chinese firms suspected to have military links.
Many Australians have endured another summer of anxiety. A year ago, we were confronted by devastation wreaked by bushfires. This summer COVID-19 outbreaks have disrupted the holiday season. Despite the outbreaks, we can be cautiously optimistic about our economic recovery. The early availability of vaccines brings us closer to the Commonwealth Treasury’s upside scenario in its budget forecasts. The Mid-Year Economic and Fiscal Outlook (MYEFO) revised the growth forecast for 2021 to 4.5 per cent, up from the budget’s baseline forecast of 4.25 per cent. According to the MYEFO, 85 per cent of the 1.3 million people who lost their jobs or were stood down to zero hours in April 2020 are back at work.
Even with that more promising outlook, directors cannot rely on the tailwind of catch-up growth. Outbreaks will threaten to halt the recovery and constrain our daily lives. Global growth will continue to be subdued and the impact on Australia may be exacerbated by the deterioration in our trading relationship with China. The timing of stimulus withdrawal also hangs over the Australian and global economies. For every organisation, clarity around long-term strategy and resilience planning will be vital given the uncertainty and downside risks.
The AICD has a program for 2021 to support members in this work. Our content calendar for members this year — across Company Director magazine, physical and online events, webinars, and the AICD website — will canvas the range that directors need to cover, including strategy and risk management, organisational culture, cyber resilience, innovation, the macro environment and stakeholder engagement. Our webinars this month will include the governance of remuneration and the challenges of a distributed workforce. Our popular series on boardroom behaviours also continues through March.
As part of the AICD’s Forward Governance Agenda, we are developing a guide to support members in bringing stakeholder considerations to the board table, as well as well as introducing an ethical component to the AICD’s Director Professional Development program.
We continue to make our curriculum available in formats to suit the needs of individual members. Last year, we launched an online version of the Company Directors Course, our flagship program for practising directors. This year, we will launch an online version of the Foundations of Directorship, our core program for aspiring directors covering the fundamentals of governance, strategy and risk, and finance. We will also launch new online courses dealing with contemporary governance challenges, including a course on cyber resilience.
We are committed to advocating for reform that enables directors to do their jobs effectively. At the end of 2020, a Parliamentary Joint Committee called for substantial change to Australia’s securities class action settings. Australia’s current securities class action regime militates against the investment and risk-taking required to spur the post-COVID recovery. The AICD will continue to urge the necessary reform in this area, as well as the policy action needed generally to revive growth, including modernising the Corporations Act and funding certainty for NFPs.
On 1-2 March we will host the Australian Governance Summit in a hybrid format for the first time. Subject to NSW public health orders, we will welcome delegates face-to-face at the International Convention Centre in Sydney, as well as online. We are excited to extend the reach of the AICD’s landmark annual event, particularly to regional communities.
This year’s program — based around the theme “Accelerate” — will consider the roles of directors and boards in response to these remarkable times. Speakers include many of Australia’s top directors, including Margie Seale FAICD, Gordon Cairns, Nev Power MAICD, Christine McLoughlin FAICD and Phil Chronican FAICD.
The summit will be a chance for the director community to share what they have learned over the past year and lead the conversation on the post-COVID recovery. There are reasons to be hopeful that 2021 will be a better year, but that hope is fragile. We have turned the page, but we are far from turning the corner. The confidence of our community must be sustained by strong, focused and ethical leadership.
I look forward to having that discussion at the summit and setting out the path for 2021 and beyond.