What’s next for the AICD’s Forward Agenda actions?

After a year of governance practices in the spotlight, the AICD has released the results of its Forward Governance Agenda member consultation and set out the AICD’s actions and next steps. Over the next few months, we will continue to roll out tools and resources as part of our Forward Governance Agenda – a program of work seeking to respond to current debates on governance practice and standards. Your feedback so far to our member consultation process has been crucial.

Over 1,200 members responded to our Forward Governance Agenda consultation paper released in April 2019. The AICD asked members to provide their views on the Forward Governance Agenda through an online questionnaire. The consultation sought member views on areas where the AICD should increase its focus or change its approach to strengthen governance practice. 

One of the major findings was that there was strong support (85 per cent) among members for a review of the Code of Conduct to focus on clear standards of conduct and practice expected of directors. In addition, 75 per cent supported ethical decision-making in governance practice and 58 per cent backed the idea of introducing a fit-and proper person test for members.

“I am delighted by your response to the consultation and grateful to everyone who has contributed their views and guidance,” said AICD CEO and Managing Director Angus Armour. “We sought your help in testing our views on areas where the AICD should do more, or do things differently, to support improved governance practice and outcomes.

“As the peak body focused on building the capability of Australian directors, the AICD must lead the changes needed to lift the practice of governance and restore community trust.”

The member responses have helped to guide the AICD’s priorities in response to current governance debates. Here’s what members had to say in their feedback and what the AICD is doing in response. You can download the report here.

Key consultation findings

• Standards and professionalism: Members support a revised AICD Member Code of Conduct with a focus on clear standards of practice and strengthened Director Professional Development obligations.
• Duties and stakeholders: Members expect the AICD to lead debate on directors duties.
• Demonstrating accountability: Members are concerned about director and board accountability and want guidance around good practice.
• Culture and remuneration: Culture is a high priority for directors. Members want practical support around the governance of culture and remuneration.
• Voice of governance: The AICD must be a clear and leading voice on good governance practice.
  There are many perspectives across the AICD’s diverse membership. You will see in the report that we have sought to reflect the range of member perspectives fairly and transparently.

New tools and guidance for members

To date the AICD has released two new guides relating to the Forward Governance Agenda themes:

• A director tool on governing organisational culture
• A joint statement with the Governance Institute of Australia providing guidance on board minutes. What’s next?

Over the coming months, the AICD will continue working on targeted initiatives under each of the Forward Agenda themes which take into account member views. From undertaking a full review of our Member Code of Conduct, to developing more practical tools and resources on directors’ duties and the governance of culture, the AICD is committed to responding to the needs and expectations of the governance community.  As the work progresses, we will engage with members further on an ongoing basis and seek your views.

Forward Agenda Actions – future steps

• Standards and professionalism 
  • Commence a formal review of the AICD Code of Conduct, to include consideration of standards of governance practice and options for compliance frameworks. 
  • Revise the AICD’s Director Professional Development (DPD) scheme to require a focus on priority topic(s) as part of each 3-year DPD cycle. 
• Duties and stakeholders 
  • Refresh AICD resources on directors’ duties to reflect contemporary practice, within the current framing of the best interests duty. 
  • Support debate with greater stakeholder engagement and new research. 
  • New guidance on bringing stakeholder voices to the board. 
  • Increase the prominence of stakeholder views in AICD communications. 
• Demonstrating accountability 
  • Increase focus on stakeholder and community understanding of the role of the board and non-executive directors. 
  • Consider non-prescriptive guidance on board commitments. 
  • Further research annual director election models and impacts. 
• Culture and remuneration 
  • Develop new resources to support members in the governance of culture. 
  • Engage proactively on expectations on the governance of remuneration, promoting appropriate framing of the board’s role with stakeholders. 
  • Consider scope for good practice guide on governance of remuneration.

Access the full report

To view the full results of our member consultation and for further details of initiatives that will be rolled out over the coming months, we encourage you to access the complete report. 

About the consultation

In April 2019, the AICD launched a member consultation Forward Governance Agenda: Lifting Standards and Practice, which closed on 17 May 2019. Results and next steps are available at Forward Governance Agenda: Results of Member Consultation.

AICD’s Chair John Atkin FAICD and Managing Director & CEO Angus Armour FAICD launched AICD’s Forward Governance Agenda at the Australian Governance Summit in March 2019. The Agenda focuses on four themes: standards and professionalism; directors’ duties and stakeholders; accountability; and the governance of culture and remuneration.

Please contact the AICD at policy@aicd.com.au with Forward Governance Agenda comments or questions.