Should directors be more willing to engage in public policy debate? Three industry figures share their views.
Keith De Lacy AM FAICD
former Queensland Treasurer and former director of AICD’S national board.
We are losing the battle. By we, I mean those people who believe that the private sector, the business community, creates the wealth that underpins living standards, employment and the social framework of society.
Without a healthy and profitable business sector, unemployment grows, living standards decline and governments lose the financial capacity to deliver on their social justice obligations – everyone suffers, especially those at the bottom – the poor and the unemployed.
I have for some time become alarmed at the alienation of much of society from the productive sector. I don’t mean some marginalised, save-the-world misanthropists, I mean large and influential sectors of society – much of the public sector, academia, large sections of the mainstream media, the arts industry, the so-called progressives and so on.
And the irony is that their standards of living, their cosy affluent lifestyles, are very largely attributable to the industries they despise. In the resources industry, so pivotal to the Australian economy, we often feel like we are the enemy.
And as a consequence our industries are, at best, unappreciated and over regulated, and at worst, gradually squeezed out of existence. We are losing the debate. Could that be because we are hardly engaging in the debate?
From another perspective, if more than half the people don’t accept we have a major budget repair challenge in Australia then we’ve got communication problems. We are not meeting our obligations, we are surrendering to the irrationalists, the so-called progressives, the populists, and the save-the-world crowd.
We shouldn’t say a certain reform is vital to the business sector. We say this reform is necessary to expand the economy, create jobs and grow government revenues, which deliver the social dividend. It is affluence that gives us the capacity to address environmental problems, to reduce pollution and fund our social programs.
This argument is bathed not only in virtue, but in truth – which I admit is unusual. Let’s frame the debate on our terms and engage.
Graham Bradley AM FAICD
chairman of Stockland AND vice president of the Business Council of Australia
Should directors be more willing to engage in the public policy debate? My answer is unequivocally “yes”. Here’s why. We live in a robust democracy but one that is cluttered with contending voices where public policy debate too easily becomes contentious, partisan and confusing. The general public is, in my view, calling out for firm and cogent leadership on the big public policy issues we confront as a nation.
With their breadth of points of contact with the national economy and the global competitive marketplace, company directors are uniquely well-placed to have informed and coherent views on major issues affecting the economy, the business environment and our international competitiveness. In addition, company directors have valuable insights on matters critical to the sound and ethical governance of our corporate and government institutions. If company directors have no voice in these issues, poor policy outcomes will surely follow.
As president of the Business Council of Australia from 2009 to 2011, I strongly urged company chairmen to lift their voices on such public policy issues. CEOs will naturally be assumed to advocate positions beneficial to their particular companies, but chairmen and directors, particularly those who hold a range of directorships, can less easily be dismissed as speaking for special interests.
And I believe there is a good “listening” among the community in general for the considered viewpoints of senior business leaders. This was brought home to me strongly when three business leaders and I appeared on the ABC’s “business only” Q&A program in November 2013.
The program received very positive feedback about the contrast between our rational and unemotional conversation compared to the typically strident, adversarial and at times ill-informed commentary that so often characterises that program.
It is particularly important that directors speak up on matters relating to the efficient, effective and ethical operations and governance of companies. Very few politicians or regulators have any practical experience with the responsibilities and liabilities assumed by company directors.
consulting editor, Company Director magazine and former managing editor, BRW and Shares magazines
As a journalist, my inclination is to encourage directors to contribute more to public policy debate. But having watched vested interests skew the debate in recent years, I believe directors should exercise greater caution.
I understand why directors want to speak up. Well-judged comments from respected chairmen carry weight, especially when in the public interest and not just that of their organisation. Australia desperately needs a deeper conversation on the urgent need for reform. The critical test is whether those comments best serve stakeholders and if the rewards from publicly challenging federal or state government policy outweigh the risk.
That does not mean boards should be devoid of an opinion or afraid to state it. Rather, they should consider carefully whether voicing a strong public opinion on an issue, one that may irk government, helps stakeholders in the long run. There must be process. The chairman should be the voice of public commentary and there should be clear board policy on directors making comments. Published opinions must be well researched, balanced and thoughtful, and the executive team should be in the loop.
There is nothing wrong with a column in the opinion pages of a large newspaper, or appearance on a TV current affairs program. Or a chairman who speaks up because he or she is genuinely concerned about policy directions in matters that affect business generally. The chairman of a not-for-profit organisation, for example, might be critical of a government proposal on unemployment benefits and its potential effect on homelessness. Such comments clearly serve stakeholders.
But too many executives and directors over the years have commented publicly to raise their personal profile, not that of the organisation or issue. For the most part, stakeholders do not elect directors to use their position as a soapbox. Having decided to go public, boards must examine the best avenues.
The obvious places are business groups, such as the Australian Institute of Company Directors and the Business Council of Australia. They have the resources and profile to make a meaningful, measured contribution to public policy debate.
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