Louise Petschler GAICD on recent geopolitical developments

With geopolitical upheaval affecting governance, and regulatory simplification on the agenda, there is much to consider in the months ahead.

Geopolitics & governance trends

The role that boards play in elevating focus from current “confusion and noise” was strongly reinforced by leading directors at a media roundtable hosted by the AICD last month.

In the early weeks of President Trump’s administration, trade wars and tariffs, energy policy, climate, diversity and inclusion are just some of the topics dominating headlines. AICD MD and CEO Mark Rigotti discusses the challenges for boards in his column this month (see p10), including the focus on ESG and diversity.

The AICD is providing regular insights on the external environment through free webinar briefings for members (access the AICD’s Forces and Megatrends Shaping the Australian and Global Economies in 2025 briefing HERE) and regular updates from AICD Chief Economist Mark Thirlwell (see p22).

Regulatory simplification: An election priority

The pace of presidential executive orders, DOGE (Department of Government Efficiency) actions and related court and Congressional challenges in the US creates considerable uncertainty. Boards will be testing many scenarios as they assess this environment. But away from the “shock and awe” of US politics, Australia has its own challenges on regulatory complexity to consider.

At the corporate regulator’s annual forum last year, ASIC chair Joe Longo set a clear and measured call to action on Australian regulation. As he pointed out, the complexity of our current regulatory regime is staggering, with over 49,000 cross-referencing definitions appearing across Commonwealth Acts. Each new law adds new layers of complexity. This is costly for regulated entities, for regulators tasked with enforcement and for the community seeking redress and protection.

The AICD has welcomed ASIC’s new Simplification Consultative Group to bring an informed, proactive focus to improving corporations and markets regulation.

The key to a successful regulatory regime lies not in the quantity of regulations, but in their quality and execution. We know through our regular Director Sentiment Index survey that regulatory complexity is a substantial contributor to board risk appetite in Australia. We hear this in our detailed consultation with directors on governance policy and legislation. As we head into a federal election there is an opportunity for real focus on this issue.

The Business Council of Australia has set markers on where political attention should be in its pre-election review of the “Big 5 Questions” for the federal election. Better policymaking, with regulations assessed through a productivity lens and removal of law duplication across departments and state/federal jurisdictions, are important suggestions. There is also need for a national stocktake and simplification agenda, driven by sensible policy principles, not populist headlines.

Deregulation is an evergreen topic, of course. Successive political cycles have seen limited practical action, with detailed reviews often becoming footnotes in future reports. While the difficulty is acknowledged, there are many benefits from clearer, more concise and coordinated corporate laws — for all stakeholders. The AICD will engage constructively with the major parties and governance stakeholders on this important national priority, bringing director perspectives to the table.