At the 2024 Australian Governance Summit, held in Melbourne on 20-21 March 2024, nearly 2000 attendees explored the evolving dynamics of directorship and governance amid a complex regulatory landscape.
Insights from leading figures who spoke at #AGS2024 highlighted the pressing need for adaptability, strategic foresight and diversity in boardrooms in order to navigate challenges such as climate change, cybersecurity and AI. The gathering served as a pivotal platform for addressing the multifaceted risks and opportunities facing modern directors, pushing the boundaries of traditional governance to keep boards at the forefront of contemporary issues.
Reporting by Shelley Dempsey, Writer/Editor at AICD, and Company Director magazine reporters Domini Stuart, Christopher Niesche and Denise Cullen.
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Artificial intelligence (AI) is a major challenge for boards because it is evolving and changing fast, Catherine Livingstone AC FAICDLife (pictured above) told #AGS2024.
Our environment is now one of pervasive AI, she said during her keynote address to this year’s summit. “We have moved rapidly from the basic algorithmic phase of AI, to, more recently, with generative AI, the augmentation phase. The next possible phase is that of autonomy, where, according to a recent survey of 3000 AI experts, there is a 50 per cent probability by 2050 of Artificial General Intelligence (AGI)…” By definition, AGI is able to beat humans at cognitive tasks. “We should take careful note of the Nvidia announcement of its new and very powerful Blackwell AI chip.”
AI demands that directors understand the decision architecture in their organisation — and that they are very clear on who or what holds the decision rights at any level, or any point in time; and whether those decisions are consistent with the values of the organisation. “Regulators will not accept excuses for not knowing, …courts will not accept excuses; and the community certainly will not accept excuses. The robodebt experience has made that very clear.”
The role of the director is no longer limited to diligently reading board papers and attending board meetings because they also need to immerse themselves in the strategic and operational landscapes of their organisations, she said.
In the opening address of this year’s AICD Australian Governance Summit, the chair of Pacific National and the chancellor of University of Technology Sydney said the rapidly changing landscape requires directors to develop strategic situational awareness.
“They need to be looking for patterns and those soft signals in the ether to avoid falling into the trap of path-dependence thinking — that is believing that doing more of the same is the best strategy, especially when all is going well,” she said.
Livingstone advocated that boards adopt design thinking, noting that the first Apple iPhone was the result of this ideas process and caused strategic disruption in the sector. “I fear that Australia has a blind spot when it comes to the value of design and design thinking. We tend to think of it only in the context of a product or fashion, but it is so much deeper and extends to service design, software design, process design, value chain design, business model design — and strategy design. And dare I say, policy design.”
Boards should also hold strategy discussions with a wide group which includes the CEO and the next two layers of direct reports.
“The discussion among this wider group is much more broadly informed and enables better questions to be asked with a focus on whether the right questions are being asked and avoiding the process moving too quickly to the first right answer,” she said. “There is always a second right answer.”
Diversity on a board is crucial to achieving this, but Livingstone said this means more than just gender diversity, because there is an important distinction between difference and diversity.
The skills matrix is helpful, but also needs to be overlaid with consideration of individual thinking and interpersonal styles.
“Diversity of thinking, together with the ability to contribute are key attributes and may result from factors such as experience, qualifications, age and gender, but may not,” said Livingstone, a former chair of Commonwealth Bank of Australia, who was honoured with a life fellowship of the AICD at this year’s AGS.
Livingstone also questioned whether tenure limits of nine, 10 or 12 years are appropriate and said six years might be a better midpoint to help organisations balance corporate memory with meeting the changing needs of the organisation’s strategic context.
Tough gig for directors: ASIC chair Joe Longo
Being a director is “a tough gig”, said Australian Securities and Investments Commission (ASIC) chair Joseph Longo. “If you’re acting in good faith and want to run a profitable business, and not fall foul of what’s expected of you in terms of the law, that’s hard work.”
The increasingly complex business environment ramped up existing governance pressures. “If we also add changes to regulatory settings, mandatory climate disclosure, cybersecurity and AI, just to name a few, it may seem to some that being a director is like Sisyphus in the ancient Greek myth, forever pushing a boulder up the hill, only for it to roll back down again,” he said.
The introduction of climate reporting requirements would impose new obligations upon directors — but bring benefits, too. For example, access to climate reporting data from other entities in a company’s value chain would “support in better managing climate change-related risks and opportunities, and potentially enhance shareholder value”.
AICD managing director and CEO Mark Rigotti MAICD raised the issue of superannuation fund boards, given that the industry is now worth an estimated $3.6 trillion. For instance, late last year, Australian Prudential Regulation Authority (APRA) deputy chair Margaret Cole said superannuation trustees needed to ”step up and be accountable” to deliver better outcomes for their members.
Then, in February 2024, former Prime Minister Paul Keating said union-backed industry super funds would likely start seeking board representation on major Australian companies.
“Having a role on companies where they have a majority interest… it seems to me that it is actually tied up with governance,” said Rigotti.
Longo indicated that ASIC’s Financial Accountability Regime — the forerunner of which was brought in to deal with bank behaviour — would ultimately be extended to superannuation trustees (from 15 March 2025) and be jointly administered by ASIC and APRA.
“[The trustees] have to figure out ways of acting in the interests of members who are now drawing on those savings,” added Longo.
AI challenges and opportunities: Dr Ayesha Khanna
AI can bring a number of benefits to companies and regulators are starting to develop legal checks and balances, but boards must also develop clear policies and risk-based frameworks to manage the implications and reach of the new technology, Singapore-based artificial intelligence (AI) expert Dr Ayesha Khanna, co-founder and CEO of AI advisory Addo, told the AGS in Melbourne.
Legislation to regulate AI has been passed in the European Union (EU) and several US states and companies will eventually need to report on their AI activities in the same way they report on ESG and climate change policies, according to Khanna.
The European Union’s AI legislation, which has just been formally approved, “lays the groundwork for the fact that AI owners must be responsible and ethical in their use and management of AI risks”.
The laws set out a “risk-based framework” for regulation and identify “layers of risks”. “For any board, it is imperative that the governance of AI be part of their risk management,” she added.
Countries including Australia and Singapore are cautious about how they regulate the use of AI so that innovation is not stifled. “There’s a lot of hype around AI at the moment, but there are very clearly three benefits for businesses that any person can understand and should really be thinking about,” Khanna told the conference.
“First, it empowers humans to be more productive. Second, it enables machines to be more productive. And third, it enables us to enhance customer experience.”
Companies need to push their senior management and CEO to think about AI strategy and how they will use it across employees, machines, innovation and customers. “How are you using the data at your property where it starts… are you modernising the data architecture?”
She said organisations need to be alert to the dangers of their AI being hacked in the same way as they are concerned about cybersecurity.
They should also be ready with their own internal policies on the use of AI ahead of any government regulations, not because they are being forced to, but because it is “the right thing to do”. They need to develop processes around their use of AI to prevent it “hallucinating” or producing outcomes that are biased or prejudiced.
She warned there is a danger that AI can be “poisoned” or hacked to produce the wrong outcomes.
The Singapore government has created a toolkit called AI Verify, which companies can use to check their AI models and make sure they are not biased, or they don’t go against the values of the country, she said.
Some companies are starting to voluntarily report their own policies on the use of AI at the moment. “We know that AI can provide huge advantages in terms of operational efficiency and competitiveness — and no country can afford to lose out on it.”
Governance models need to evolve: AICD chair John Atkin FAICD
Governance models need to evolve to address the challenges that society faces in order to capture the benefits of change, AICD chair John Atkin FAICD told the Australian Governance Summit 2024 (AGS) in Melbourne in March.
There is a “real tension” between contemporary and traditional governance models. However, much of the criticism of contemporary governance practices that acknowledge the importance of considering the impact on stakeholders rather than a sole focus on the returns to shareholders is based on a false dichotomy.
Directors must exercise their powers in the best interests of the corporate entity. Financial returns to shareholders are important, but not the only consideration, said Atkin, quoting the final report of Commissioner Kenneth Hayne AC KC, who led the financial services Royal Commission.
“In developing and evolving our governance practices, we need to maintain a critical eye. Critics of contemporary governance are right in calling out compliance requirements that are merely tick-a-box exercises. Formulaic practices or requirements of that kind do obscure and waste time and resources.”
About 1900 people attended this year’s AGS in Melbourne, which is a record number, with 1450 in-person attendees and 450 online, said Atkin.
Directors need to focus on innovation and the challenges and opportunities of issues such as climate change and artificial intelligence. “Our society has changed enormously over the past 50 years,” said Atkin. “The challenges that society is facing are becoming more complex and interconnected. At the same time, technology is evolving, which brings its own set of risks and opportunities.”
The issue of cyber risk should be high on every board agenda, and there have been more than 20,000 downloads of the AICD Cyber Security Governance Principles,
he added.
Importantly, directors must keep an eye on three fundamental principles of good governance — integrity, transparency and accountability — and check if the policies of their organisations are still fit for purpose in today’s world. “We are compelled to have regard to a broader set of stakeholders in discharging our duties,” he said.
Cybersecurity: Is your board prepared?
Boards need to have a baseline understanding of cybersecurity concepts and principles, but should stop short of having a specialist cybersecurity director, said Dr Derek Bopping GAICD, head of the Australian Signals Directorate Melbourne office.
Bopping said he was concerned that cybersecurity is “almost like a bottomless well of technical detail that requires an inordinate amount of time and expertise to maintain”.
Boards should instead work to overcome their three biggest blind spots: Understanding their data — what they are holding and how it’s managed; the idea that data is the only thing boards need to worry about, rather than the operational and business interruption consequences of a cybersecurity incident; and that there is a merging of cyber risk and political and geopolitical risk and they should be briefed accordingly.
While boards might not need a cybersecurity expert, they still have an important role to play in cybersecurity, said Catherine Brenner FAICD, chair of Australian Payments Plus and a non-executive director of Scentre Group. Boards should look at the broader landscape, she said.
“The individuals within the organisation will probably be looking at their technical bits, the bits that are affecting the operations are their particular area of focus. The board can step back and look at the whole picture and see the forest for the trees and think about things such as the second and the third-order effect of what’s happening.”
Boards warned on investor activism
Record numbers of remuneration strikes in the 2023 AGM season showed that investor activism is on the rise and must be addressed as a priority by boards, the Australian Governance Summit was told this year.
Philip Foo, vice-president, APAC Research & Engagement, CGI Glass Lewis, said there were more than 40 remuneration strikes last AGM season against ASX 300 companies, which was around double the number of strikes in previous years.
Previously, since 2011, remuneration strikes had numbered in the low to mid 20s in any AGM season, Foo told a session on investor and proxy adviser expectations.
Votes against directors also rose by a quarter in the past AGM season — from 13 per cent to 29 per cent. Investors lodged protests in high-profile cases such as Qantas and Magellan, reflecting changing shareholder sentiment.
In order to deal with shareholder activism, boards should reach out to shareholders and engage them not just before AGM season but at all times of the year, said Aldi Djajaputra, managing director, Corporate Governance at Morrow Sodali. The relevant institutional investors should be identified and approached. “Ensure you speak to the right people who will lodge votes.”
Companies should conduct rigorous analysis and contact portfolio managers, and governance and stewardship teams that make decisions.
Investor activism is here to stay and actions resulting from recent cases show that activists are getting results with their campaigns, said Foo. In cases such as Endeavour, Whitehaven and Magellan, which had been subject to investor activism, there had been repercussions such as a change of chair, a change of CEO or remuneration strikes. “Investor activists are getting lots of success out of their campaigns,” said Foo. “Perpetual has a new activist fund. I do think this is here to stay.”
The ASX Corporate Governance Principles were being revised and a new updated version will be released next year, said Djajaputra.
A key change would be a shift in focus to material risks, where the previous focus was mainly environmental and social risks. “Governance has always been the core area that needs to be focused on,” he said.
In the wake of the Optus and Medibank hacks, boards must also look at crisis response plans, added Foo. “Communications on crisis management should be a real focus for boards.”
Charity regulator targets red tape, cybersecurity
The charity sector is much larger than many imagine. Keynote speaker Sue Woodward AM, Australian Charities and Not-for-profits Commission (ACNC) commissioner, underlined that by pointing out that the sector employs 10.5 per cent of the paid workforce.
Another common misconception is that the ACNC is all about investigations. The broader work relates to making sure the public can rely on the Charity Register by making sure it is as accurate as possible.
“First is what I call our charity register integrity work,” said Woodward. “We do need people to submit their annual information statements on time and I was really pleased that, this year, on one of the key deadline dates of 31 January, we saw a four per cent increase in on-time filings. The ACNC always tries to prevent organisations defaulting in their obligations and debts, but I will not shy away from continuing to take people off the register who persistently don’t do their reporting.”
For the past four years, the ACNC has been working on the charitable status of those who can offer the benefit of tax deductibility. “We’ve managed to confirm that many are on-track, and get many organisations back on-track, too,” she said. “We’ve also been able to identify those that do need to come off the register.”
Emerging areas of ACNC focus include how cybersecurity risks are being managed and ensuring there are no registered charities with serious financial mismanagement, or that are supporting terrorism or extremism. Woodward also assured the audience that she will not lose her passion for removing red tape.
Powering Change: The energy transition
Company directors should position their organisations to capture the opportunities from the biggest shift of capital in history as the global economy decarbonises, the summit heard.
Instead of taking a compliance mindset to reducing emissions and reporting on emissions, companies should bake emissions reduction into the way they do business, said John Lydon GAICD, co-chair of the Australian Climate Leaders Coalition and chair of Generation Australia.
He noted that Australia has a legislated 43 per cent emissions reduction target six years from now and a net zero target in 25 years. “That is going to happen,” he said. “What can you as a board do about it?”
Businesses should embed this into their strategies, influencing their choice of product, capital allocation, who they partner with and how they remunerate people.
Karen Moses FAICD, a non-executive director of Snowy Hydro and Orica, picked up the theme, saying the question is how directors can create businesses that are fit for the future and ready to capture the opportunities for the future, as well as deal with the short-term risks.
“What do strategically I want the business to look like?” asked Moses. “So, what am I incentivising to ensure that we’re going to get there? A lot of change has to come with the businesses and it’s not going to happen on its own.”
How to future-proof yourself
In the face of the national skills shortage, directors must lead by example on developing a culture for continuous learning and educate themselves to ask the right questions on issues such as cybersecurity, artificial intelligence (AI) and innovation, the AGS was told.
The skills shortage exists now in Australia at board and management level and this cascades down to the workforce, Jordan Griffiths, managing director Private Equity (Asia) at Accenture, said. “The labour market is hyper-competitive right now. So how is your skills set, placed amongst that level of competition? We need to ask ourselves that question to challenge our relevance.”
A continuous learning culture is of the utmost importance. “The number-one thing a director should be thinking about is… do you have the right culture for continuous learning within your board, within your management team and within your organisation?”
Everyone has a different mix of competence, he added. “You don’t have to be experts, but you need to know when to call the experts and bring in the right people.”
Directors must also use their stewardship roles to close skills gaps. “Assess where the gaps are. Assess who has skills on specific things,” he said. “Everyone’s number-one asset is the workforce.”
Board members must develop their questioning skills and know not only when to ask questions, but also know how to listen, said Professor Lan Snell MAICD, Dean of Programs (Postgraduate) at the University of South Australia.
“The listening-to-speaking ratio is the hardest one to master,” she said. Directors should aim for a growth mindset based on innovation balanced with compliance.
“Often it’s the quality of questions that differentiates a person in a room. Also knowing when to ask that question.”
The world is changing quickly and is subject to immense disruption in terms of technology, she added. A culture of learning should be actively supported throughout an organisation. A combination of a learning culture, leadership support and financial incentives will encourage members of the organisation to take up learning opportunities. Micro-courses are a valuable way for people to educate themselves in the workforce, she said.
Strengthening productivity
Interest rate movements are generating uncertainty and the Australian economy is “pretty weak”, a situation very much driven by the interest rate-sensitive sectors of the economy, according to Su-Lin Ong GAICD, a managing director of RBC Capital Markets. She also predicted continuing weak growth this year, complicated by global uncertainties.
“There are multiple pressure points — the Middle East, Russia, Ukraine, a more assertive China — that impact businesses, the operating environment and the economy,” she said.
Robert Cole MAICD, chair of Iluka Resources, said it’s axiomatic that business should be pursuing productivity on a daily basis. “We should be looking to operate more efficiently to embrace innovation and technology, and to look for growth,” he said. “Where government can play a role, it is absolutely up to us as directors to seek to influence that. We’re privileged to live in a democracy where we can actively participate in shaping the laws and policies that affect our business.”
The so-called “12 apostles” for the future of productivity, identified by NSW Productivity Commissioner Peter Achterstraat AM FAICDLife, include the leadership and strategic skills of boards, and community trust in institutions. “If we can get the community to trust institutions more - and institutions have got to do more to gain that trust - that’s another factor for productivity increases,” he said.
Four focus areas for directors: Dr Pamela Hanrahan
Non-executive directors can’t have eyes on everything that happens in their organisation and so should keep a close eye on four specific areas, said Dr Pamela Hanrahan, a legal adviser on corporate law and governance. The first area is what she calls “reasonable steps” duties.
“The number of these is growing — governments like them and they are a direct instruction to boards that you cannot delegate this,” said Hanrahan, author of Directors’ Legal Responsibilities: A Handbook for Australian Boards, senior fellow at the Melbourne Law School and a consultant with law firm Johnson Winter Slattery.
These duties include financial reporting, workplace health and safety, including sexual discrimination and harassment, and for financial services companies, the financial accountability regime.
The second is conflicted transactions. “If there’s a transaction between a director or a controlling shareholder in the company, then you must be very vigilant,” said Hanrahan, adding that boards should seek independent advice.
Third is “red flags”. If directors know there is a problem and management keeps putting the boards off, that is very high-risk, she said.
Finally, boards need to keep a close eye on mission-critical risks, such as the worst thing that could happen to a company, she told this year’s AGS.
Flexible work panel discussion
Following the massive upheavals brought about by COVID-19, boards are grappling with the question of where their people do their work.
“I feel we’ve gone through the storming and we’re not yet at the norming,” said Annette King FAICD, a director at HCF and Swiss Re. “Organisations are still experimenting.”
She urged directors to make sure their decisions are based on what is best for organisational outcomes and employees, not the personal preference of either the board or the CEO.
Cameron Pitt, lead partner for modern work at Deloitte Australia, agreed that many organisations are looking for the sweet spot that meets the needs of the organisation and the workforce.
“Individuals now feel that when mandates are put on them, they’re being controlled, which can create distrust,” he said. “At the same time, when they’re spending too much time at home, you can get worker isolation, creativity drops and engagement and retention fall.”
Across her boards, King is seeing a much greater need for accountability and agile decision-making by the line manager. “Shorter working weeks or remote working work in some roles, but not for others,” she said. “That can really only be determined by a line manager with the capability to understand team output, what team members are feeling and thinking, how engaged they are and what tools they need.”
Pitt said a high-impact, high-performing manager is virtually trilingual, able to navigate engagement face-to-face, through social networks and in Zoom meetings. However, Sarah McCann-Bartlett FAICD, CEO and managing director of the Australian HR Institute, said their 2023 research found that fewer than a third of Australian organisations were training their line managers on how to manage a hybrid workforce. She also noted that when employees are working remotely, directors need to be sure they’re compliant with workplace health and safety laws.
“Wherever it is, a workplace is still a workplace,” she said.
Trust is paramount: Scott Perkins, Woolworths Group chair
Choosing the chief executive is 95 per cent of the board’s job. The next part of the job is helping the CEO and their team make better decisions by establishing trust, said Woolworths Group Ltd and Origin Energy Ltd chair Scott Perkins.
First and foremost, directors need to overtly invest in creating a trusted environment — with trust between the board and the CEO, and trust among the board members themselves.
“Trust that enables the CEO to go, ‘I’m not sure about this’; trust that encourages diversity of opinion,” he said.
When Perkins took over as chair of Origin, he abolished the practice of board meetings starting with a private session without executives present. His experience had been that even though directors had read the board papers and discussed an issue among themselves, it was later recalibrated when the executives contributed to the discussion.
He asked why private sessions were even needed, except to discuss CEO performance and pay. “Why can’t we say everything in front of the chief executive? He or she is sitting outside thinking, ‘What are we talking about?’ for the hour,” said Perkins. “It’s actually not trusting. We should back ourselves to say everything in front of the chief executive, including the hard discussions.”
In a wide-ranging discussion with AICD managing director and CEO Mark Rigotti MAICD, Perkins also commented on director tenure, saying it should not be a given that a director is appointed for 10 years.
“There should be an expectation that the director is appointed for as long as she or he is performing,” said Perkins, who added that all of the boards he is involved with have a very rigorous performance management ethic.
AICD looks forward to new horizons in 2024: AICD CEO Mark Rigotti MAICD
The AICD is looking forward to a successful year with a digital transformation program, enhanced education offerings and expanded strategic partner relationships, AICD CEO and MD Mark Rigotti MAICD told the AGS this year.
Digital transformation will offer members digital platforms with more resources such as virtual events to online learning platforms that deliver a range of interactive and engaging personal experiences, a more dynamic curriculum and more opportunities for professional development. “This kind of technology transformation enables us to scale our member benefits like never before,” he said.
The AICD is strengthening investment in its flagship Company Directors Course (CDC), which will be 50 years old this year. Content will be updated twice a year, and the standard of materials enhanced, to keep learners abreast of contemporary governance practices.
The AICD is also proud of what it has achieved in the past seven months, with 5500 learner programs, 28,000 webinar attendees, 110 events across the country and 460 scholarships awarded to First Nations people, people with disability and regional people.
The AICD marks 70 years of operation this year.
The AICD will aim to maintain and elevate last year’s focus on members as part of a long-term refresh strategy, and increase the focus this year on revamping its education offering and pursuing a digital transformation, said Rigotti.
Government boards
Government boards can present a new set of challenges to directors from the private sector, the summit was told.
“In a listed company, we think about shareholder value,” said Jane Halton AO PSM FAICD, who sits on the board of ANZ.
“In the government context, your governance is actually as a steward for something the government owns and the government considers responsible. That brings all the complexity, all the nuance and, frankly, all the challenges we see in a public sector and sometimes a political environment.”
Gabrielle Upton FAICD, a director of Netball Australia and former NSW Liberal MP, said that the social licence to operate is baked into a public sector organisation, not so much in the private sector. Directors also need to understand the fetters on their power.
“In the private sector, a board will set strategy and appoint the chair and CEO,” she said. “In the public sector, these are often the province of ministers on the recommendation of the public service.”
Asked about diversity on public sector boards, Australian Public Service Commissioner Dr Gordon de Brouwer PSM said this is front of mind.
“On boards, we have a very strong gender balance,” he said. “But, if you think about what Australia looks like, 25 per cent of Australians don’t speak English at home. You won’t find that representation on a public sector board. When it comes to cultural and linguistic diversity and disability, that’s where we’ve really got a problem, and that’s something we’re leaning into directly.”
Building more accessible, inclusive workplaces
Weighting candidates with a disability during the recruitment process and delivering disability awareness training to directors were among the tools suggested to tackle the vexed issue of a lack of representation of people with disability on boards.
A three-strong panel also proposed investing in coaching, support and mentorships, as Suzanne Colbert AM GAICD suggested the most compelling case for better representation may be the business one.
“Without the voices of people with disability in the services you’re providing, you’re not really going to ever hit the mark of meeting the quality you’re aspiring to,” said Colbert, who co-founded the Australian Network on Disability.
Lillian Leigh GAICD pointed out that 4.4 million Australians live with a disability, making it likely many boards already had people with disability on them — they just didn’t know it.
Former Disability Royal Commissioner Dr Alastair McEwin AM GAICD said many people didn’t want to disclose “because they just don’t feel safe in the workplace”.
“My personal commitment is to see the board and management have an open culture,” he said.
It was vital that organisations didn’t just assume that all people with a disability shared the same experiences. “Ultimately, what we recommended was culture change through policies and procedures that are flexible, adaptable and not just one size fits all,” he added.
Securing your next board role
Finding your next board role can often be more about standing out from the crowd by demonstrating the value that you add and your background or depth of knowledge in particular fields rather than about specific skills, the AGS was told.
Naomi Edwards FAICD said that when she was asked to join the board of life insurer TAL, many people thought the reason was her background as an actuary. “But it was because I had worked deep inside the super sector for a decade,” she told the summit in a session on securing your next board role.
The superannuation sector had a big customer base and the understanding that she held in the sector stood her in good stead for the new role.
René Johnson MAICD, managing director of executive and board recruiter Pacific Search, said he likes to see a cover letter on a board role application, which contains bullet points on the value applicants can bring to a particular board.
“That makes it easier for me and my client, the chair, to identify who does stand out from the crowd.”
Vivienne Yu GAICD, a non-executive director of Bridge Housing, said, “Try to embrace who you are — your uniqueness makes you stand out from the crowd. Your diverse background is often your greatest asset. It’s a matter of finding a board that values that.”
When Yu joined the Bridge Housing board, her background in capital raising and innovative solutions made her stand out from other candidates and proved valuable when assessing strategies for the housing organisation’s future fund.
When searching for a first board to join, potential candidates need to network and find one that best suits their interests, said Johnson. “Boards won’t chase you — figure out who you are. Google boards that may suit you. You may know someone… Make a project of it.”
He added that boards will seek candidates out when they have three or four boards on their CV, but if they have no board experience, they need to “make it happen”.
Using recruitment firms is also a good idea, said Edwards. Boards tend to use search firms much more than in previous years, when they relied on word of mouth.
Advisory boards can also be a useful way into a board career and a good way to test the waters, she added. Taking advantage of sponsorship and mentorship opportunities can also be useful.
STEM skills
Looking beyond digital, a Q&A session asked what the panel thought their experience as a STEM professional brought to the board.
Professor Alan Duffy GAICD, founding director of the Space Technology and Industry Institute, said he had approached new problems over and over again as a scientist and now felt comfortable with navigating that challenge as a director.
Dr Nick Fleming GAICD, former national president and chair of Engineers Australia, said people with STEM backgrounds know how to scaffold discussions in a way that brings clarity without judging the input. In complex situations, this can help the board to separate the noise from the material.
Indigital founder Mikaela Jade said that as a western-trained scientist and a First Nations female board member, she believes a special skillset that First Nations people bring to boards is a holistic way of thinking about STEM.
“I find western science is very good at breaking things down into smaller and smaller parts and getting really deep into the minutiae,” she said. “We’re very good at looking at the whole system and understanding how the component parts affect each other.”
Fleming also made the point that scientists are trained to understand risk.
“Most organisations’ risk assessments are woeful,” he said. “They are ‘wet finger’ assessments based on false assumptions about risk distributions. In a world where our networks will be reengineered and reimagined, an understanding of risk has never been more important.”
The next generation of directors
Building a pipeline of potential directors to plug existing skills gaps and provide diverse perspectives is shaping up as the next big challenge facing boardrooms.
Lauren Williams GAICD, a non-executive director of global software company Altium, noted that while enormous progress had been made in terms of getting more women on to boards, a Watermark survey found that 19 per cent of all female directors (prepared to serve on boards) hold 46 per cent of female-occupied board seats.
Age, cultural and other forms of diversity were also needed to “bring a different group of people onto the board to encourage different sorts of thinking and different sort of outcomes,” she added.
Matthew Everitt GAICD, of First Nations consultancy Dreamtime Art Creative, said that for boards to become truly diverse spaces, a lot of work needed to occur on “unbundling boardroom dynamics”.
“We can’t make an assumption that everyone’s going to be able to afford to turn up today or to do a program that would help them get better at governance,” he said. It also meant developing a framework around creating a safe space in which to tackle difficult conversations.
Bianca Goebel GAICD, a director of South East Water, indicated that both individual and collective actions were needed to shift the dial. The next generation of board directors could consider gaining experience by sitting on committees run by universities, professional associations or government panels.
“There are lots of different ways you can start to build that governance skillset in real life without actually sitting on a board to help you get there,” she said.
Social issues — How and when should boards take a position?
As boards across Australia grapple with complex cultural, political and social issues, directors are finding that traditional one-way communication with stakeholders is no longer enough. “Stakeholders… are becoming a lot louder, a lot more connected and a lot more mobilised in the way that they approached various issues,” said Taleen Shamlian MAICD of Advisory Street Pty Ltd.
But directors need to ensure that any position the board took was thoroughly thought through. “We need to step back… [and make sure] we’ve done the homework, we’ve looked at the data and we know we can have an impact,” added Freeman.
Patrick Langrell GAICD, a director at the Australian Catholic University, cautioned against boards taking a strong “for or against” position, in favour of allowing for more nuanced and moderate views.
“The binary approach of taking a stand or remaining silent — both of those options are untenable now and increasingly fraught with risk,” he said. “You’re damned if you do and damned if you don’t.”
The AGS will return in March 2025 at the International Convention Centre Sydney.
We will provide updates on the 2025 Australian Governance Summit towards the end of 2024.
Watch videos of some of the speakers from the AGS 2024
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