Australia will not enter technical recession in 2021. We had anticipated a slump in the second quarter, but the economy grew, marginally helped by strong government spending. Even though Australia will not be in an official recession, the experience of this Delta wave has been sharp, with more than half of Australia’s population in lockdown. In the month between the start of lockdown in the Greater Sydney area and the end of July, the region shed nine per cent of payroll jobs, more than it had in April last year during the first lockdown. Private sector forecasts are for the Australian economy to contract by more than four per cent in the end-September quarter.
Many AICD members are overseeing organisations that are struggling, unable to operate anywhere near normal capacity. The lockdowns have taken a heavy toll on staff, particularly those balancing home-schooling or care duties, or living alone. Personal resilience is being tested yet again and “burnout” is a growing concern. The AICD continues to produce resources to help our members navigate this wave — including recent web content on the governance of staff vaccination programs and strategies for SMEs to cope with downturns, webinars on mental health and cyber risks during the pandemic, and chief economist Mark Thirlwell MAICD’s ongoing economic analysis.
The AICD itself has felt the impact of the pandemic. Face-to-face interaction has always been core to the work of the AICD in building connections and sharing knowledge among our members. While membership continues to grow, the constraints on our education program have been severe. On 20 October, we will release our FY21 results, which show a further 2.3 per cent fall in operating revenue from the COVID- depressed result in FY20 — an 18 per cent fall on an annual basis from pre-COVID levels — and a $3.5m operating loss. The result would have been much worse if not for the assistance of a $2.4m subsidy from the government’s JobKeeper program, which enabled us to maintain staff through the depths of 2020.
We used the past year to accelerate the AICD’s digital transformation, creating new online versions of our courses, introducing new online courses, running our first “hybrid events” and expanding our webinar program. While the latest lockdowns will continue to curtail our ability to provide face-to-face services in some states, our events and courses have recommenced elsewhere with members enjoying the opportunity to reconnect.
The end is in sight
We are closer to the end than the beginning. The highway to “new normal” has vaccine tollbooths. As this issue of Company Director reaches members, we are weeks, not months, from hitting the vaccination milestones required under the Doherty Institute modelling for the careful easing of restrictions.
It is good timing for the AICD’s annual Essential Director Update (EDU), which kicks off in Brisbane on 6 October, to be followed by events around the country — all offered virtually and in-person where we can. We are delighted to have Lisa Chung AM FAICD and David Thodey AO FAICD bringing their wealth of knowledge and experience to the event as keynote speakers. While the EDU will, as always, cover the governance developments from the year prior, it will focus on the path ahead. How do we rebuild our organisations? How do we take the lessons from the past year to mitigate the ongoing risks of COVID? How do we innovate to spur the recovery and the next phase of Australia’s growth? If you have not yet joined more than 7000 of your fellow members in registering for the EDU, there is still time to do so at aicd.com.au/EDU
The director community and the organisations they oversee have proven extraordinarily resilient through the pandemic. It is a credit to AICD members that they remain forward-looking. In August, we launched the Australian Chapter of the Climate Governance Initiative (CGI) with a virtual event for more than 3000 members. The climate risk governance guide we released with MinterEllison to coincide with the launch has been downloaded more than 2300 times. Climate change is now a standing item on many board agendas. The CGI will give AICD members access to a global network of expertise and resources.
Directors are the long-term stewards of Australian organisations. As they have with the COVID-19 pandemic, the director community will play a vital role in addressing climate change to ensure a sustainable future and a robust Australian economy.