In this issue of Company Director, Ken Henry AC, chair of National Australia Bank and former Secretary of the Treasury, suggests an intriguing thought experiment: “Let’s just pretend government doesn’t exist.
How would our conversation go? There’d be no point in writing up a list of demands. Whatever our aspirations for Australia’s future, why don’t we try to solve some of these problems ourselves?”
The pressing need for a reform agenda continues to concern directors. The challenge for directors and leaders in the business and not-for-profit communities is how we contribute to Australia’s reform agenda independently of government.
It’s almost a year since AICD Chairman Elizabeth Proust FAICD opened the 2017 Australian Governance Summit with the observation that business and government have a shared responsibility for driving a reform agenda, commenting, “It is not reasonable or credible to grumble that government doesn’t listen to the needs of business, if business isn’t acting as a partner in helping to find solutions. We cannot point to government and say the problems … are government’s problems to solve alone.”
That approach of greater engagement and collaboration between business and government underpinned AICD’s 2017 Blueprint for Growth, particularly for fostering innovation. In our 2018 Blueprint, we will assess how the reform agenda has progressed and whether Dr Henry’s thought experiment is becoming the reality for private and NFP sectors.
For any government to deliver reform takes a shared vision that impels the electorate to accept short-term consequences, often at the expense of one group, for long-term gains that are typically shared across the community. Reform requires a consensus around a long-term transition plan to manage the impacts of structural change on the community.
Instead, we are experiencing a polarisation in the electorate, exacerbated by social media; a drift away from the major political parties and widely shared consensus; and a short-term, faster pace in the media focused on creating content.
After a prolonged period of economic growth, only dim memories remain of the economic structures that inhibit national prosperity, the benefits as well as costs of structural change, and the courage needed to undertake significant economic reform.
Crucially, there is a significant and profound lack of trust in our political system generally, its capacity to frame bipartisan long-term policy positions, and entrenched low expectations of the contribution government will make to the nation’s prosperity and reform agenda.
Across the wide community of directors in the AICD, private sector and NFP boards appear to have greater capacity than government to engage stakeholders, and to be less constrained than public sector boards to engage the community. Perhaps this is why commentary is increasingly about boards and the business community being asked to weigh into social debates, to frame their decisions around community impact and take public positions on social issues outside their core business. The emphasis has shifted to the benefits from stronger stakeholder engagement and how neglecting community reputation can lead to significant brand damage and financial consequences.
'Businesspeople' or 'community'?
Nicola Roxon GAICD, a non-executive director of Dexus and Bupa, and a former federal minister, comments in this issue that national leaders “are marked as either ‘businesspeople’ or ‘community’ when, of course, we are all in the community.” Directors sense their role is evolving and they are framing their decisions to balance growth-enhancing innovations against workforce and demographic challenges, and the long-term implications for a community, including security and privacy. Given the speed of advances in technologies like artificial intelligence, how will directors balance the expectations of the community and the interests of their organisation? When directors consider social issues, what framework should they apply to represent the interests of the organisation? And if directors develop a reform agenda outside government, how do they engage with government to implement that agenda?
At the 2018 AGS in March, we have developed a program to address the question: How can directors — from every sector — work for better business and community outcomes?
To frame the discussion, we have built the conference around the themes: trust, innovation and sustainability. Breakout sessions and networking events will help you engage with your fellow directors. And as the largest gathering of directors and governance professionals in the Southern Hemisphere, the AGS has a great line-up joining keynote speaker Dr Henry, including Sam Mostyn MAICD, Rt Hon John Key, Pru Bennett, David Thodey FAICD and Alison Watkins. I look forward to seeing you there.
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