The AICD in 2024

As a new year begins, the recent past has shown directors must be prepared for the unexpected, both in terms of risks and opportunities.

At the end of last year, renowned US corporate lawyer Martin Lipton co-authored a memo for directors outlining key issues for boards in 2024. “Over the past year, expectations for directors have continued to evolve, bringing new challenges and responsibilities to the boardroom... The business environment has also become more complex: macroeconomic uncertainty, geopolitical tensions, regulatory unpredictability, political polarisation, culture wars, cybersecurity threats, the growth of generative AI and energy transition are among the issues that boards are now expected to navigate.”

I agree. It is a daunting list, but as directors, we must be up for the challenge. Management thinker Peter Drucker once wrote: “The greatest danger in time of turbulence is not the turbulence itself, it is to act with yesterday’s logic.”

The AICD is committed to equipping our members with the insights and resources you need to drive your organisation’s success in 2024 — and to ensuring AICD members are at the forefront of effective contemporary governance. This is set to be another landmark year for the AICD, with a focus on enriching our member value proposition through an enhanced education offering, ongoing digital transformation and strategic partnerships.

I would highlight seven things to watch for, all of which should strengthen the Institute and help our members deal with the complex environment and imperative to change and adapt.

Climate governance: An early highlight will be the launch of our course on climate governance in March. Following the success of our e-learning module introduced last December (which I completed and found very helpful — and it is free for members), this course is a timely addition to our educational offerings, especially as we navigate the impending introduction of mandatory climate reporting. Recognised as the most significant change to corporate reporting in a generation, this development underscores the need for informed and proactive governance. To support this, the climate governance resource we produced last October will be updated to reflect the latest legislative changes, ensuring our members have access to the most current and relevant information.

#AGS 2024: We will once again host the Australian Governance Summit in Melbourne in March. Themed “At the Forefront”, the conference will feature an impressive line-up of leading directors and experts, including Catherine Livingstone AO FAICD and Scott Perkins, which will cover all the critical topics mentioned in Lipton’s memo. These discussions are not just about staying abreast of current trends — they are about shaping the future of governance in these key areas.

NFP Governance Principles: As part of our commitment to supporting the NFP sector, we will launch a revised edition of our NFP Governance Principles, highly regarded in the sector and a benchmark against which many report.

AI governance: Recognising the rapid evolution and ethical complexities of AI, we are developing an AI governance resource as part of our broader strategy to equip members with the knowledge and tools to effectively govern in this fast-moving and increasingly important domain.

Advocacy: We will continue to advocate for members on the policy priorities set out by the board for FY24. This includes advocating in private meetings, roundtables where members play a critical part, public submissions and via a director delegation to Canberra in July. The priorities are:

• A targeted cyber governance policy that lifts national resilience, promoting a “Team Australia” partnership and limiting overlapping and punitive regulation
• Balanced policy settings that support high-quality disclosures, including balanced liability settings to facilitate mandatory climate reporting
• NFP regulation that promotes financial sustainability and harmonisation Coordinated and proportionate regulation, building consensus and understanding with policymakers of issues of concern to directors, productivity and growth.
  

Strategic partnerships: The AICD has always had relationships of varying depths with a variety of organisations. We are now forging strategic partnerships with organisations at the cutting edge of their fields. These are designed to deliver greater impact for our stakeholders and bring additional value and insights to our members. We feel we can have more impact more quickly through the purposeful development of strategic partnerships with a few key organisations.

Digital transformation: I discussed this in my previous column and received lots of helpful feedback — ranging from “don’t do it!” to “utilise the opportunity to transform the enterprise and not just upgrade the technology” — for which I thank you.

This work continues, and layered across the above initiatives we continue to leverage technology to enhance our offerings and member experiences. Our digital transformation strategy is about ensuring every interaction with the AICD is valuable and relevant.

These are just a sample of what will be an ambitious agenda for the Institute in 2024. I look forward to meeting with many of you over the course of the year to hear about your experiences with the AICD — what you like and what we could improve — as we deliver on this program.