FY22 Annual Report: Chair’s Letter

FY22 was a year of progress, achievement and change for the Institute, although not without material impact from the lingering shadow of the COVID-19 pandemic. 

We closed the financial year with a $5.2m deficit (FY21 $0.9m surplus), which reflected the restrictions on face-to-face education and events, and volatility in the global equities market.

Despite these challenges, progress was made in advancing our purpose: strengthening society through world-class governance. We not only made a positive contribution to public debate and leadership on contemporary governance practice, we also strengthened our own governance.

More than 13,000 participants attended our world-class education courses, including online versions of the Company Directors Course and Foundations of Directorship. We also delivered a complimentary Ethics in the Boardroom e-learning program for our members, more than 9000 of whom enrolled in the course.

Membership grew by 6.1 per cent — from 46,608 in 2021 to 49,456 members by 30 June 2022. This demonstrates the continued strength of the AICD brand, and the commitment of our members to building a community of leaders aligned with our purpose and the development of their own leadership capability.

Our Governance & Policy Leadership team secured important legislative reform for continuous disclosure and virtual AGM laws. Through our engagement with the broader governance community, we contributed to policy framing for class actions, insolvency, NFP fundraising, director IDs, cyber regulation, sustainability reporting, workplace sexual harassment, director duties and the business judgment rule.

We launched the Climate Governance Initiative Australia – a multi- partner collaboration providing director resources and briefings, which attracted significant interest.

At the Australian Governance Summit in March 2022, attended by more than 1500 in-person and online, I spoke of the AICD’s important role in advancing support for First Nations peoples. We appointed our first Sector Lead – First Nations, Justin Agale MAICD, to lift focus on First Nations governance issues and services, and embarked on our second Innovate Reconciliation Action Plan (RAP). We were privileged to attend the Garma Festival, Australia’s leading Indigenous cultural exchange event, where Prime Minister Anthony Albanese proposed changing the constitution to enshrine an Indigenous voice.

Importantly, the board reviewed its own governance practices in a range of areas. At our AGM in November, members overwhelmingly supported the adoption of a new, more contemporary constitution.

We also worked with our division councils to modernise their charters as advisory bodies and ensure they are consistent with the changes in the management structure of the Institute.

Authenticity is important for us when promoting sustainability and sustainable business practices to our stakeholders. We need to be “walking the talk”. To that end, we are stepping up our reporting on this in our 2022 Annual Report, with a dedicated sustainability report and a commitment to set clear targets to lift our performance in this area.

Change was most notably marked by the leadership transition from Angus Armour FAICD to Mark Rigotti MAICD, which was announced in June 2022 and successfully completed in September 2022.

Angus led the Institute with distinction from 2017. His many achievements included announcing our purpose of strengthening society through world-class governance; developing the internal culture of the Institute with a focus on accountability, respect, collaboration and excellence; leading the organisation through the challenging years of the COVID-19 pandemic; and initiating the Institute’s digital transformation, as we move toward our vision of being the leading global platform for directors.

While the board did not seek leadership change, we were delighted with the calibre of candidates considered in the recruitment process we conducted to identify Angus’ successor. We were very pleased to announce the appointment of Mark as our next MD and CEO.

Mark brings extensive local and international leadership experience to the role, as well as the drive to solve problems, develop people, and improve the organisations he works with.

The board offers its sincere thanks to Angus for his contribution over the past five years, and its support to Mark in building on Angus’ legacy by extending the impact and performance of the Institute in pursuit of our purpose.

Governance initiatives

During the financial year, the following initiatives were implemented to enhance the Institute’s standard of governance:

• A review of the AICD’s governance documentation, including the adoption of a new constitution and division council charters
• A review of the role of division councils, with the introduction of standard document templates to facilitate meeting efficiency and to improve the effectiveness of the councils as advisory bodies
• An internal board evaluation to ensure continuous improvement, provide greater clarity on roles and responsibilities, enrich decision-making and create efficiencies
• Internal committee evaluations to facilitate continuous improvement and to ensure that each committee remains focused on its agreed responsibilities
• A review of our board committees, which has led to a consolidation of certain committees, a reduction in their overall number and a streamlining of their charters to facilitate meeting effectiveness
• A review of the board’s skills matrix to identify skills and diversity gaps. The skills matrix is available on the AICD website: aicd.com.au
• Board succession planning to ensure critical skills are maintained and effective renewal is achieved
• A review of the Director Code of Conduct and Employee Code of Conduct, merging them into one document to reflect best-practice governance.

Sustainability report

We have dedicated a section of our annual report to reporting on our own sustainability performance. This reflects our role as Australia’s leading governance body for company directors, and a strong desire to be authentic in terms of our advocacy for Australian business to act responsibly, not just in relation to their governance practices, but also in identifying and managing their social, environmental, and economic impacts.

In previous annual reports, we have accounted for certain aspects of our own corporate responsibilities, including our governance practices, engagement with stakeholders, member education programs, gender diversity and remuneration data, and workplace culture and values. We are now looking to progressively step up our non-financial disclosures, with a broader range of environmental, economic, social and governance (EESG) data that covers our organisational impacts, as well as our impacts on our members and other stakeholders, including the environment. We believe it is every organisation’s obligation to be transparent and accountable for its actions and impacts, positive or otherwise.

As part of our approach to disclosing EESG impacts and opportunities during the year, we conducted a materiality review in July 2022 to consider and agree the key issues that should be reported in FY22.

In terms of our own organisational performance, we have begun to consider environmental aspects such as energy, carbon, water, paper, waste and recycling. We reflected on our employee practices, such as HR policies and processes, employee diversity, and pay. We examined our social impacts in relation to sponsorships, community initiatives and volunteering activities. In terms of governance, we reviewed the application of our values and governance mechanisms, as well as our broader business responsibilities in relation to supply chain policies, ecofriendly and socially responsible procurement, and modern slavery risks.

We also have external impacts through our industry research, policy work, advocacy and member education activities — and to what degree these activities contribute to our members’ capabilities and enhance awareness in the wider business community around responsible and sustainable governance practices.

At this early stage of our sustainability reporting, we are realistic as to our capabilities to report on all the above matters, pending the availability and completeness of data. But we are prepared to commit to escalating our EESG accountability in future reports.

We would welcome member feedback on our sustainability efforts and strategy. Please email us at: information@aicd.com.au

Highlights: Snapshot

While COVID-19 continued to adversely impact face-to-face education and events in FY22, we used hybrid and digital formats to provide members with world-class governance education.

• Growing our membership to 49,456
• Providing a complimentary Ethics in the Boardroom e-learning program to more than 9000 members
• Appointing our first Sector Lead — First Nations to lift focus on First Nations governance issues and services
• 36,633 enrolments in webinars on critical topics including digital capability, cybersecurity, ESG and climate governance, and organisational sustainability
• Delivering governance education courses to more than 13,000 participants
• Completing an external review of our first Reconciliation Action Plan (RAP)
• Deploying a new AICD website
• Launching the Climate Governance Initiative Australia, a multi-partner collaboration to strengthen and support climate governance in Australia
• Hosting a hybrid-format Australian Governance Summit, attended by more than 1500 participants
• 10,000+ Directors on Digital podcast downloads
• Highest level of female gender diversity for ASX 200, at 34.7 per cent (May 2022)
• Achieving 30 per cent gender diversity milestone for ASX 201–300 boards (May 2022) 
• Launched the seventh AICD Chair’s Mentoring Program, our flagship diversity initiative
• 37,000+ The Dismal Science podcast downloads

This is an edited extract taken from the FY22 Annual Report.