As the Aged Care Royal Commission prepares to hold its first witness hearings in Adelaide in February, Professor Kristy Muir MAICD, CEO of the Centre for Social Impact (CSI), outlines why it’s important to govern for social outcomes. At the AICD Australian Governance Summit in Sydney in March, Professor Muir will speak on the topic: High-Performing Boards; What’s Behind Their Success?

    Kristy Muir Aged Care2:34

    I think there will be so many people with personal experiences with residential aged care – the good, the bad and the ugly – that the hearings for the Royal Commission into Aged Care Quality and Safety are going to be a real emotional roller coaster.

    Are you looking to see a shake-up in the aged care sector?

    The aged care sector is close to many of our personal experiences and hearts. It’s a good example of a sector that exists for positive public good – the high quality care of our older people that upholds care, dignity, respect and choice.

    Most aged care providers are really clear on having a strong stated social purpose. But one of the key problems emerges when providers don’t focus on how and whether they are achieving that purpose by measuring social outcomes. The implications can be frightening. While we have many residential aged care facilities passing required standards, on the flipside, we see coroner reports with horrific incidents. For example, a woman with dementia falling into an aged care fountain and drowning and an attempted cover up by the residential facility. At the end of the day, what we want for our grandparents, parents, ourselves who use this sector or are trying to make decisions about which organisation to use in the future, is for these agencies to live their purpose statements. For us to know if that’s occurring, we need them to be measuring and reporting their social outcomes.

    What outcomes would you like to see?

    I think all organisations with a stated social purpose should measure the relevant social outcomes they are trying to achieve. Having a purpose statement is no longer enough. We have to know whether they’re meeting that purpose. How, for example, can we make informed decisions about the services we use, where we put our funding, what is best or good practice and what needs changing?

    The exact type of social outcome measured and reported will differ depending on what organisations are aiming to achieve. But, across the aged care sector, high quality care, dignity and respect and enabling choices are three critical things that the sector needs to grapple with.

    There is much work to do to identify the most useful indicators to demonstrate that these things are occurring. It’s not easy, but it is possible. We’ve seen this in the disability sector, for example.

    What about governance questions?

    Governance is key. The two roles of governance are performance and compliance. From a performance perspective: Are aged care providers meeting their social purpose? How does the board know? Many boards across the aged care sector have been, rightly struggling with financial sustainability. The business model often just does not stack up. But focusing too much on the financials has possibly distracted boards from turning to social performance and asking whether their organisations are living and demonstrating their purpose.

    How important is social impact when you look at board performance?

    I think it’s critical. There is a growing push for organisations (whether for profit, not for profit or somewhere in-between) to be able to articulate and demonstrate how they contribute to the social benefit of society. Boards need to move beyond the idea of ‘why’ (their purpose) to demonstrating whether how and when they are meeting their ‘why’. It’s not enough to simply talk about doing good, we have to enact it, measure it and report on it – the successes and the failures. In an environment where the social purpose sector has been marketised and outcomes reporting is increasingly a funding requirement, understanding social impact has become a ‘you can’t afford not to’ issue.

    How should we measure board performance?

    Like organisations, boards should be measured on their social performance. Financial metrics alone are not enough to demonstrate whether organisations are actually making a difference. This is especially the case in the not-for-profit sector, but it’s also important for companies which need a social licence to operate. Overall, we need to add different kinds of metrics. For example, to what extent are you shifting outcomes for the people you are trying to help? Are you making people any happier? Any healthier? Are you improving their quality of life, wellbeing, housing, social and economic outcomes?

    These things are not easy to measure. What is your initiative in this area?

    Social outcome measurement is really tricky. I’ve been working in this field for almost 20 years and I’ve realised that if we’re going to help organisations, boards and the sector lift social performance at scale, we need to be able to provide sophisticated and easy to use tools, guides and resources. Organisations and boards need to know how they are performing, how this benchmarks and whether and how they’re making progress over time. To help facilitate this, the Centre for Social Impact has founded Amplify Social ImpactTM - a $12 million project that aims to improve social impact through finding what works, what doesn’t and supporting people to do more of it. Amplify has three parts:

    1. Examine social problems & establish a robust evidence base
    2. Bring together stakeholders in systems change events
    3. Provide an online technology platform to support outcome measurement and decision making. Ultimately, this will help organisations better understand and track the difference they are making.

    We are tackling five big social issues and we started with housing and homelessness last year. We are also finalising a procurement process with an IT company to do the technology build and will have the indicator engine part of the online tech platform released before the year is out. This indicator engine will help boards and organisations find validated metrics to measure if they are meeting their purpose. This year we will also release a Social Progress Index for Australia. CSI’s main goal is to enable others to increase their social impact. Amplify Social ImpactTM is one significant step in helping organisations measure their performance and know what difference they are making to society.

    CSI has developed a new social impact course for board directors. Can you tell us about this?

    Last year at the Centre for Social Impact we developed a Governing for Social Impact Executive Education Course. It’s a two-day course and the purpose of that was to really shift the gaze from performance round fiduciary responsibilities to think about how you govern for social impact and social change. We ran a pilot with JB Were and the NAB and 20 of their client non-exec directors in Sydney and 20 in Melbourne. It was remarkably successful. As a result of that we are looking at running a suite of those offerings from the first half of this year through the AGSM at the UNSW as an executive education program. There are two options. Board directors can come and do the Governance for Social Impact course with us through the AGSM at NSW for two days or alternatively we can run a bespoke course for a whole board and go and run a specifically tailored course for a group.

    This is an election year. What do you hope to see from a new government if one is elected?

    As the CEO of the Centre for Social Impact I have a long wishlist I’d like to see from a new government or a renewed government. One of the things at the top of that list is addressing housing affordability and homelessness, which sits at the root base of people being able to afford things like education and employment opportunities. I would like to see equity around education and unemployment. I would love to see a more preventative early intervention approach to vulnerable kids young people, older people and other population groups that are marginalized. I would also love and this is a really tricky one, someone to seriously tackle poverty. That will take bravery but unless we address the inequities between the richest of us in this country and the poorest of us, we won’t get the kind of economy and society that we want to live in.

    Professor Kristy Muir, who teaches Governance for Social Impact, serves as a non-executive director for the Australian Research Alliance for Children and Youth, Chairs Allan & Gill Gray Philanthropy Australasia, and is an elected member of UNSW Sydney’s Council.

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