This year’s Essential Director Update launched in Sydney last week to a record audience of 2,500. Graham Bradley AM FAICD, currently Non-Executive Chairman of GrainCorp, HSBC Bank Australia and EnergyAustralia Holdings, is travelling across Australia presenting to more than 8,000 directors and business leaders on this year’s critical governance topics.
In his presentation, titled: ‘Navigating the New Governance Environment’, he covers issues from culture to remuneration, climate change activism and director liability, warns of more regulation ahead and poses questions directors should ask in the wake of the Hayne Royal Commission and responses by regulators.
In 2019, we have seen elevated expectations about directors’ responsibilities, says Bradley. These areas include monitoring corporate culture, increased compliance and litigation risk for directors, unprecedented regulatory intervention in board’s responsibility for executive remuneration, and an increase in class action litigation, all of which have led to a steep rise in the cost of directors’ and officers’ liability insurance. “We have also seen an enlivened debate on whether corporations should have a social purpose and a public voice on social policy issues.”
For the next few years, boards face a period when regulators all over the country are under pressure. “Many directors are seeing this already,” Bradley told the Sydney audience. “This means that directors of every company should insist in the year ahead that management pays additional attention to documenting regulatory compliance, reviews compliance systems and policies and commissions external reviews of them.”
In presentations at various locations around Australia, Bradley also touches on how these issues relate to directors in the not-for-profit sector and outlines key questions that all directors should ask around the board table in 2020. These include:
Questions to ask in 2020
- Is our desired culture clearly articulated? Do our people all know in crisp terms exactly what we expect?
- Do we have effective measures of culture reported to and discussed regularly at the board?
- Have we reviewed incentive compensation? Do we unwittingly encourage poor behaviours?
- Do we need more oversight of non-financial risks?
Increasingly, companies are being pressured to take positions on current social policy issues, Bradley points out.
“These will often be complex issues where the company’s stakeholders may have widely differing views. It is important that boards establish the framework that governs their company ‘activism’ – as it is ultimately boards that are accountable for these commitments.”
There are still a number of Essential Director Update events directors can register for here. Join more than 8,000 Australian directors and business leaders countrywide at our largest complimentary event for members.
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