AGS21 Reader
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THE NEW PACE OF CHANGE AUSTRALIAN GOVERNANCE SUMMIT 2021 READER AUSTRALIAN GOVERNANCE SUMMIT 2021 | READER Contents Introduction 5 5 Accelerating innovation: How boards can shape the future 29 1 Accelerate 6 5.1 Directors, get on board with technology 29 1.1 Sustaining our hopes for 2021 6 5.2 Driving Innovation: The Boardroom Gap 31 2 Creating an achievement culture 7 6 Culture shock: The new ways of work 33 2.1 Directors, are you ready 6.1 How we use and deliver infrastructure for a culture check? 7 services will never be the same 33 2.2 Governing Company Culture: 6.2 Can you have a healthy culture Insights from Australian Directors 8 without seeing the people you work with every day? 35 3 Changing fortunes for the lucky country 9 6.3 The new normal: what do workplaces look like in 2021? 36 3.1 Setting the path to a smarter future 9 6.4 Workplace 2021: The new hybrid 3.2 Preparing for a post-COVID-19 office model 38 business environment 11 6.5 How have directors’ WHS 3.3 Critical economic questions obligations changed? 43 for the year ahead 13 7 Not if but when: 3.4 AICD Advocacy on key issues for 2021 15 Building cyber resilient organisations 47 3.5 What’s your board’s renewal plan? 17 7.1 The cultural change required 3.6 Recapping the Essential for cyber resilience 47 Director Update 2020 20 7.3 Why SMEs are a juicy target 4 Leading in a post-pandemic world 23 for cyber criminals 52 7.4 COVID-19 brings new 4.1 Tesla chair Robyn Denholm’s tips cybersecurity threats 54 for driving a culture of innovation 23 7.5 Managing a data breach: 4.2 Three ASX chairs speak out on recovery 25 Ten oversight questions for directors 57 4.3 How trust changed in 2020 and what it means for businesses and their boards 27 4.4 AICD and GIA report: Key learnings from the COVID-19 crisis 28 AUSTRALIAN GOVERNANCE SUMMIT 2021 | READER 8 How should boards respond to 11 National COVID-19 status and social change: BLM, #MeToo and more 62 the path to recovery 98 8.1 How one director started the conversation 11.1 NCCC members on action on sexual harassment in the workplace 62 needed to drive recovery 98 8.2 What’s your board doing to 11.2 Driving infrastructure reform raise awareness on workplace in the post-COVID era 101 sexual harassment? 64 12 Nowhere to hide: Shareholders, 8.3 Why gender diversity isn’t the stakeholders and the role of the board 103 only diversity that matters 65 8.4 Sam Mostyn on opening doors 12.1 Investors put boards on notice to women on boards 66 over stronger social governance 103 12.2 How does directors’ best interests 9 The NFP challenge: duty compare around the world? 105 Delivering through a crisis 68 12.3 Directors must face the challenge 9.1 The NFP challenge and the role of serving all stakeholders 107 of corporate Australia 68 13 Turbulent times for the aviation 9.2 Corporate philanthropy could keep and tourism sectors 110 the NFP sector above water 69 9.3 2020 Not-for-Profit Governance and 13.1 What happens to governance Performance Study: The COVID-19 Edition 73 when the world stops? 110 9.4 COVID-19: Managing cash flow 13.2 Charting the flight path to recovery 112 for NFPs in crisis 74 13.3 Boost your strategy with tech and data 113 9.5 COVID-19: Director priorities for NFP recovery plans 79 14 Turning a crisis into an opportunity 114 9.6 Financial considerations for NFP survival 82 14.1 COVID-19: Governing for incremental recovery 114 10 Preparing for black swans: Thriving through the tail risk 87 14.2 COVID-19: Boardroom oversight of recovery strategies 117 10.1 Decarbonisation: A strategic and financial imperative 87 15 How have small and medium enterprises grappled with COVID-19? 121 10.2 Why climate change risk hasn’t gone away 92 15.1 Australian SMEs recovery critical 10.3 Climate change now an opportunity, to economic bounce-back 121 not a threat: AICD roundtable 93 15.2 6 strategies for SME survival 123 10.4 UK and NZ lead way on mandatory 15.3 What SME directors need to know climate risk disclosures 95 about new insolvency reforms 125 15.4 New insolvency law reforms for SMEs 127 15.5 Growth opportunities for SMEs 129 AUSTRALIAN GOVERNANCE SUMMIT 2021 | READER 16 Mindful leadership: Governance and mental health 133 16.1 The grand challenge of creating a mentally healthy workplace 133 16.2 How directors can protect employee (and their own) psychological wellbeing in the COVID-19 era 134 16.3 Why leaders must talk to staff on mental health 137 16.4 Why staff wellness needs investment as part of a board risk strategy 139 16.5 Employee wellbeing: A director’s duty of care 141 16.6 3 tips to support employee wellbeing after coronavirus 144 17 What should Australia and the world expect from the Biden administration? 146 17.1 What a Biden win means for the world 146 18 Relations with China: Unsettled ties with Australia’s biggest trading partner 151 18.1 Australia’s trade dependency on China highlights our vulnerability 151 19 Industry on a knife’s edge: How will the hospitality sector recover from the pandemic? 153 19.1 The hospitality reform to-do list 153 19.2 Chef Matt Moran on the hospitality sector’s path to recovery 155 20 Resolve and resilience: Leading during a crisis 159 20.1 How to build organisational resilience 159 20.2 What key directors have to say about risk and resilience 161 20.3 Time for resolve 165 Introduction The Australian Governance Summit 2021 will be a As in past years, this Australian Governance Summit defining moment for the director community as we 2021 Reader broadly follows the summit program and accelerate towards a post-pandemic world. It will provides a selection of expert presenter submissions shape the governance conversation for the coming and recently published articles and extracts from twelve months and inform the governance agenda the Australian Institute of Company Directors. The for the coming years. purpose of this collection is to enhance attendee’s participation by providing contextual background to As organisations grapple with changing business the current director and governance landscape as it models, the shifting risk and strategy landscape, relates to the themes explored in this year’s summit. new dimensions of WHS and the increasing pace of change, the summit presents attendees with the chance to take stock of current governance issues, share knowledge with fellow directors, leading experts and organisational leaders and reflect on the leadership our organisations require from us. AUSTRALIAN GOVERNANCE SUMMIT 2021 READER | 5 ACCELERATE 1 Accelerate 1.1 Sustaining our hopes for 2021 Even with that more promising outlook, directors cannot rely on the tailwind of catch-up growth. Angus Armour FAICD | “Sustaining our Outbreaks will threaten to halt the recovery and hopes for 2021”, Company Director, constrain our daily lives. Global growth will continue February 2021, AICD. to be subdued and the impact on Australia may be exacerbated by the deterioration in our trading A bitter US election contest was determined in relationship with China. The timing of stimulus November, but an orderly transition has been withdrawal also hangs over the Australian and global frustrated as the outcome was contested. COVID-19 economies. For every organisation, clarity around vaccines are being administered against a backdrop long-term strategy and resilience planning will be of [outbreaks], surging cases in Europe and a vital given the uncertainty and downside risks. mutating virus. The extent of a Russian cyber attack against US companies and federal agencies is We host the [2021] Australian Governance Summit undetermined, as globally we continue to embrace in a hybrid format for the first time. We are excited technology that allows us to ‘work from anywhere’. to extend the reach of the AICD’s landmark annual Australia’s relationship with our largest trading event, particularly to regional communities. partner remains fraught, as the EU and China sign This year’s program – based around the theme an investment agreement and the New York Stock “Accelerate” – will consider the roles of directors Exchange begins delisting Chinese firms suspected and boards in response to these remarkable times. to have military links. Speakers include many of Australia’s top directors, Many Australians have endured another summer including Margie Seale FAICD, Gordon Cairns, Nev of anxiety. A year ago, we were confronted by Power MAICD, Christine McLoughlin FAICD and Phil devastation wreaked by bushfires. This summer Chronican GAICD COVID-19 outbreaks have disrupted the holiday The summit will be a chance for the director season. Despite the outbreaks, we can be cautiously community to share what they have learned over the optimistic about our economic recovery. The early past year and lead the conversation on the post- availability of vaccines brings us closer to the COVID recovery. There are reasons to be hopeful that Commonwealth Treasury’s upside scenario in its 2021 will be a better year, but that hope is fragile. We budget forecasts. The Mid-Year Economic and Fiscal have turned the page, but we are far from turning Outlook (MYEFO) revised the growth forecast for the corner. The confidence of our community must be 2021 to 4.5 per cent, up from the budget’s baseline sustained by strong, focused and ethical leadership.