Meeting with our overseas peers provides us with a lens to reflect on our own practices and benchmark ourselves, writes AICD CEO Mark Rigotti MAICD.
I recently had the privilege of visiting Europe as part of a European Australian Business Council delegation and attending the Global Network of Director Institutes (GNDI) member meeting in London on behalf of the AICD. The GNDI was founded in 2012 to foster closer cooperation between its member organisations, each recognised as the leading institute for directors and governance in their respective jurisdictions. Former AICD CEO John Colvin FAICD was a driving force behind its establishment as the inaugural chair.
Meeting with our overseas peers provides us with a lens to reflect on our own practices and benchmark ourselves. And there’s no need for cultural cringe. The AICD remains the largest director institute in the world. With more than 50,000 members, we account for more than a third of the GNDI’s global reach. This isn’t just a statistic, it’s a testament to the robust Australian director community and your unwavering commitment to good governance and professional development. The AICD will soon release its FY23 results, which would be the envy of our peers in terms of growth, member engagement and policy impact, as many face demographic and strategic challenges in their markets.
While there will always be a local flavour to governance discussions, many of the issues faced by our international colleagues are similar. The GNDI 2022–23 survey, which AICD members participated in, revealed that long-term strategy is a priority for directors globally, given how the external environment has recently been dominated by short-term pressures. The survey also highlighted the need for directors globally to upskill in digital and sustainability, a journey directors in Australia have been on for some time.
Yet amid these shared concerns, there are trends emerging in Europe that we should watch closely in Australia. One example is a pronounced shift towards greater defence spending. Sweden, for instance, historically neutral, is doubling defence expenditure over the next three years — a task of significant scale and complexity. And the change in defence posture is not just in spending, it is one of mindset. Government ministers in Europe, across a range of portfolios including energy and climate, are thinking about their remit with a defence overlay. This means just about every business needs to think how it will be impacted, and how it might take advantage, of this policy shift. We are a long way from a similar situation in Australia, but global trends tend to manifest here eventually. Given Australia’s delicate geopolitical position, directors should be prepared.
Climate is also pervasive in European governance conversations in a way it is not in, say, North America, where the debate is still fractured. Climate governance is top of mind for directors across all industries and sectors in Europe. This is increasingly the case in Australia, as displayed at the AICD Climate Governance Forum last month, when nearly 2000 directors and business leaders heard the latest on mandatory climate reporting, greenwashing and the energy transition. It is great to see the director community here lining up behind climate governance as a crucial area to stay at the forefront of, in terms of both challenge and opportunity. Directors have always had to be financially literate — increasingly, we also need to be climate literate.
I’d like to congratulate Rahul Bhardwaj, CEO of Canada’s Institute of Corporate Directors, on his term as chair of the GNDI. Rahul led the GNDI as the world emerged from the pandemic, when collaboration among the network was more important than ever. During his tenure, the GNDI held its first 24-hour global governance conference, a marathon event to bring the global director community together.
Congratulations also to incoming chair, Institute of Directors New Zealand CEO Kirsten Patterson. I look forward to working with Kirsten and the rest of my GNDI colleagues to share governance insights among our members and promote good governance globally.
This article first appeared under the headline 'Think Globally’ in the September 2023 issue of Company Director magazine.
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