ACSI releases updated Governance Guidelines

Notable changes include:

• Succession planning: An increased focus on the need for clearer linkages between board skills and experience, succession and director elections and re-elections.
• Founding or controlling shareholders: Expanded commentary on ACSI’s expectations of boards to manage the governance risks associated with founding or controlling shareholders. For example, ACSI expects boards to manage competing interests, ensure adequate safeguards for minority and non-controlling shareholders, understand potential influence across the business and establish appropriate mitigations, and, where possible, appoint a chair without any connection to the controlling shareholder. ACSI’s examples of better practice disclosures in this context include the existence of a plan for founder succession.
• Artificial intelligence: Inclusion of ACSI’s expectations of boards in relation to oversight of digitalisation including AI. For example, ACSI expects boards to have appropriate and proportionate governance structures, establish relevant policies and processes, consider instituting policies and principles to manage potential workforce disclosure driven by AI, and support a culture of responsible AI practices, data governance and cyber security. (For AICD’s suite of resources on AI governance, see here.)
• Organisational culture: Expanded commentary on ACSI’s expectations of boards with respect to corporate culture covering tone from the top, articulation of desired culture and understanding of existing culture, ‘speak-up’ culture, and oversight of sexual harassment risk and non-disclosure agreements.
• Diversity: Additional commentary on inclusive and diverse workplace cultures.  For example, ACSI expects boards to carefully consider how a diverse workforce may support the company’s strategy, and how to support an inclusive culture (including proactively identifying and mitigating any form of discrimination, such as racism, and harassment in the workplace).
• Workforce: An expanded focus on expectations regarding active oversight of workforce strategy and risk, including where workforce structures may rely on precarious or casual labour and result in high turnover. ACSI expects boards to oversee processes and systems to manage labour-rights and job-security risks, engage meaningfully with the workforce (including unions), and oversee a strategy to manage turnover and achieve desired workforce composition, supported by appropriate investment in training.