The opportunity of tomorrow

We are currently refreshing our strategy to heighten our focus on you, the AICD’s members, writes AICD CEO Mark Rigotti MAICD.

The past year has again exhibited the resilience of the Australian economy. The outlook is better than we could have hoped for a year ago, as we emerged from the Omicron wave and at the onset of Russia’s invasion of Ukraine. “With a rapid post-pandemic economic recovery and favourable terms of trade, Australia has reached a stronger cyclical position than many other advanced economies, with limited scarring,” said the International Monetary Fund (IMF) in February.

We are fortunate — but risks remain in 2023.

The IMF warns they are on the downside, reflecting the Reserve Bank’s view that there is a “narrow path” to a soft landing for the Australian economy. While the economy remains robust, we should be laying the foundations for future growth. It is important that governments across the country work with business to introduce pro-growth policies. The IMF recommendations include greater efficiency in government spending and reigniting productivity growth by tackling skill shortages and streamlining the infrastructure pipeline.

Directors are facing into these challenges and the IMF’s sentiments were echoed by directors at a roundtable the AICD organised with the Australian Financial Review BOSS magazine last month, in which I participated. “If we look at some of the government programs... we need to be very efficient on what we are delivering today,” said CSL chair Brian McNamee AO, while Telstra chair John Mullen AM urged the federal government to address the skills shortage by acting “very quickly to open up visas”.

Climate-conscious

Tackling climate change is one area where a collaborative approach will be essential to success. Towards the end of last year, Treasury commenced a consultation on proposed reforms to introduce a mandatory climate risk reporting regime for large listed companies and financial institutions as part of a broader suite of climate change-related policies. Throughout discussions, the AICD has expressed its support for a reporting regime that provides greater clarity to directors on regulatory expectations and supports the disclosure of high-quality, comparable information to the market, based on a common baseline. At the same time, the AICD has consistently raised the need for liability settings to promote comprehensive disclosures, without creating undue litigation risk. This is important if we want to progress through collaboration. We are advocating for safe harbour relief. But this is not a foregone outcome and some, including the Australian Council of Superannuation Investors, are arguing it is not required. We do not agree and will be advocating for balanced and sensible safe harbour relief. The regime should support the efforts boards and organisations are already making in the governance of climate change risks and opportunities.

As with the broader economy, the recovery at the AICD has been healthy over the past year, with membership continuing to grow and strong demand for our courses. From this position of strength, we are laying the foundations for the future success of your institute. We are currently refreshing our strategy to heighten our focus on you, the AICD’s members. Expect to hear more on this soon.

Immediately on the horizon is the Australian Governance Summit on 1–2 March. It is a milestone event in the annual governance calendar and we are excited to bring the AGS to more than 1400 members and directors, in person in Melbourne and online. The theme — the Opportunity of Tomorrow — invites us as directors to lead the conversation on how we can drive the next era of growth, at our organisations and across society.

I am looking forward to meeting many of you there, hearing your views and learning from that discussion.