The new managing director and chief executive officer of the Australian Institute of Company Directors shares his thoughts on governance and the direction in which he will take the organisation.
Company Director (CD): You have had a distinguished and varied career ranging from the youngest person to lead a political party in Australia to running a large health insurer and then a prominent organisation in the Financial Services Council. What attracted you to your new role as managing director and chief executive officer of the Australian Institute of Company Directors (AICD)?
John Brogden (JB): I am a member of AICD and did the Company Directors Course in 2009 and learned an enormous amount. The course provides a number of benefits; there’s the education side, terrific networking and a great cross-section of people on those courses. I found that really quite beneficial.
The phenomenal increase in profile and activity and credibility of AICD over the last six years is very obvious, particularly in the business world, but in the director world as well. I see this as a prestige organisation and I see company directors as leaders in Australia, whether that’s in the community or business.
They add value to the economy; they add value to society.
When this opportunity was presented I was very excited about it. When I was offered the role I didn’t think twice about saying “yes”.
CD: As you commence your tenure at AICD, how would you sum up its current position as a professional association?
JB: As the voice of directors we are without peer. As the leader on corporate governance issues in Australia, we are the gold standard. We have no direct competitor in that space, but there are many alternatives in the field.
I think our success to date has been to continue to be number one and lead in the space.
That’s my challenge: to continue to be number one and continue to be the clear leader on corporate governance in Australia.
CD: Do you think AICD has an opportunity to broaden its agenda and comment on a wider range of issues relevant to directors and the business community generally?
JB: Yes, we will lift and broaden our agenda and profile on public policy. Our core business, our reason for being, is to educate directors or advocate on behalf of directors and for good governance in Australia, and hopefully the world. The other reason we exist is to help directors see what’s over the horizon.
Our challenge is to represent the interests of directors to the public and stakeholders and ensure that Australians understand that company directors add value to the economy and society. They make a better Australia. We can do that by lifting our profile on issues beyond governance.
We will be advocating in public policy areas that are relevant to governance, whether they are relevant to a director on a charity board or a director on a listed company with respect to the strength of the economy and the strength of society.
CD: An important issue in the year ahead will be the potential reform of the business judgment rule in the Corporations Act. AICD has already proposed a new honest and reasonable director defence. Why do you think this reform is so crucial?
JB: There’s a risk and a pitfall for boards that see their role only as a compliance board.
Boards play a role to set and monitor strategy, business plans and to see a business, organisation or charity grow. When they’re overly focused on personal liability, it gets in the way of a higher priority.
If all they’re worried about is losing their house they won’t make a decision and everybody loses. The company loses, the shareholders lose, if it’s a member-based organisation, the members lose, and the economy loses as well.
The Reserve Bank of Australia’s governor, Glenn Stevens, talks about “animal spirits”. It’s a great phrase – the animal spirits of the economy. His great criticism is that business isn’t embracing its animal spirits and making big decisions. And there’s no doubt that part of the reason for that is because they’re worried about their personal liability.
There will always be levels of liability associated with directorship, there is always a level of responsibility in every part of life, but if we over-regulate that then we will be discouraging directors from growing their business and improving society.
CD: AICD has taken a leading role in encouraging greater gender diversity on Australian boards. Will this continue to be a priority under your leadership?
JB: We will continue to advocate in this critical area. In many people’s minds, this is the single biggest issue in corporate governance in Australia at the moment – that there is a lack of diversity on boards.
I’m proud to say as the chairman of Lifeline Australia, I chair a board that has a majority of women and a female CEO.
The topic of diversity, gender and otherwise, is a significant issue without a doubt. We need to be looking over the horizon to diversity beyond just gender at the board table, and also to diversity in the senior ranks of businesses.
We need to have female chief financial officers, chief operating officers and specialists who can go on boards when they finish their executive careers.
Australia is a very culturally diverse nation but we’re not seeing that diversity on our boards.
This isn’t just about gender on boards. There is more to this debate, but we don’t, and we won’t, support quotas. We do advocate for this to be a top agenda item for boards and companies.
CD: AICD is an organisation that provides members with education, information and events to assist them become better directors and create more effective boards. What will be your focus in this area and what can people expect in terms of their membership going forward?
JB: We’re already set on a path to improve membership services. We’re revamping our Directorship Opportunities service and almost a third of our members are on the register already, so there’s a great demand for members to see that service work and grow. We will also open more member lounges around the country this year.
CD: Are you contemplating any new methods of engagement with your membership and other stakeholders? Also, a lot of people don’t understand how a board operates. How do you communicate with people beyond your current membership to be able to improve that understanding?
JB: I think that assessment is fair. There would be a large number of people who wouldn’t know what a company director is or what they do. The opportunity is there for us to promote the understanding of directors in Australia.
CD: You’re an experienced director with a number of directorships in a range of commercial, public sector and not-for-profit boards. Can you tell us about some of your experiences across that diversity of boards?
JB: I’ve been privileged to chair Lifeline. I chair UrbanGrowth NSW, the NSW Government’s land and urban renewal corporation, and I’m a director of NIA, which is a small start-up health insurer.
From a governance experience, the core of these experiences has been the same. They’ve all been fulfilling, even though they’ve had very different objectives in each, and I see the incredible value that directors add to those organisations.
The management of those organisations look to the board for direction, mentoring, support and advice and I have seen in all of those companies that directors add enormous value to the professionalism of the organisation, to the development of the staff and, of course, to the bottom line and objectives of those companies.
CD: Finally, busy lives are unsustainable without some sort of relaxation. What do you do when you are not at work?
JB: One of the great things about being out of politics is I get my weekends back. At this stage in our lives, the family is our great focus.
Already a member?
Login to view this content