A policy first productivity framework can transform Australian businesses

As momentum builds on Australia’s productivity and competitiveness challenge, the AICD is ensuring that the director voice is firmly at the table.

Director voice on productivity reforms

Ahead of the National Economic Reform Roundtable last month, the AICD provided policy input grounded in director insights, calling for ambitious, practical reforms to unlock investment, reduce regulatory drag and build national resilience.

Our policy submission was informed by CEO-led director roundtables and broader engagement. We thank AICD members, stakeholders, committees and Division Councils for their insights and focus on long-term, positive national outcomes.

Productivity and growth are key themes across the AICD’s FY26 policy reform and governance practice priorities. In our latest Director Sentiment Index, Australian directors rank productivity as the most important issue for the federal government over the short and long term. Our message to government is that directors are ready to work constructively with policymakers, unions and civil society to meet Australia’s shared economic challenge.

AICD call to action

The AICD has called for a coherent, system-wide reform vision to lift productivity growth to avoid the risk of piecemeal, fragmented reform. Our key recommendations:

• Regulatory simplification: A national goal to reduce regulatory costs by 25 per cent by 2030, including modernising the Corporations Act 2001 (Cth) and removing accumulation.
• AI and digital innovation: Fast-track the National AI Capability Plan with regulation that enables responsible innovation.
• Smarter regulation processes: Reform regulatory impact analysis and broaden the Regulatory Initiatives Grid.
• A national business model: Map sector strengths and invest in sovereign capability to build economic resilience.
• Skills alignment: Reset the national skills agenda with stronger industry alignment and improved student outcomes.
• Fiscal sustainability: A credible medium-term fiscal strategy and improved federal-state coordination

The AICD’s submission draws on our contributions to the Productivity Commission (PC) five pillars inquiry into productivity growth. We will continue to contribute to the PC review, due to report by the end of the year.

The AICD is also part of a coalition of 27 industry and peak bodies, coordinated by the Business Council of Australia, working to bring shared priorities and practical actions to the national policy debate.

During August, the PC issued interim reports on its five pillars. The AICD welcomed the signposts on improved regulatory processes and reducing red tape as part of its focus on business dynamism. The PC’s interim proposals on corporate tax reform raised concerns among the business group coalition about complexity and cost.

The AICD will continue to advocate for policy settings to support strong governance, long-term investment and a more productive nation, informed by director perspectives.

Cyber resilience

The recent cyber attack and resulting data breach at Qantas is another reminder of the high threat environment for cybercrime faced by all Australian organisations. The AICD has practical resources to support directors and boards, including:

• Cyber Security Governance Principles (with the Cyber Security Cooperative Research Centre)
• Governing Through a Cyber Crisis (with CSCRC and Ashurst)
• Data Governance Foundations for Boards (with Melbourne Business School and Allens)

These offer practical advice for boards including red flags and clear governance actions.

Cyber threats require a “Team Australia” approach where government, business and community sectors work together to build national resilience. The government has launched a new consultation on building SME cyber resilience and improving access to cyber insurance.

Modern slavery reform: Getting the balance right

The Attorney-General’s Department is consulting on reforms to the Modern Slavery Act 2018 (Cth), following an independent review.

Since 2019, large entities must report annually on how they address modern slavery risks. Proposed changes include mandatory reporting criteria, clarified joint reporting, penalties for non-compliance and enhanced ministerial powers.

While the AICD supports many aspects, we caution against increasing company-level compliance burdens. Penalties should also apply only to serious failures, such as non-submission or false statements, and include a “reasonable steps” defence. For boards, it is important to have confidence modern slavery risks are not only being disclosed, but being meaningfully addressed by management.

This article first appeared under the headline 'Productivity & practical reform’ in the September 2025 issue of Company Director magazine.