33rd National Conference – Day 1 re-cap
It was a great first day. The sessions kicked off with a special video address from the Honourable Kelly O’Dwyer MP, Minister for Revenue and Financial Services, who provided an update on the Turnbull Government’s legislative agenda aimed at supporting good governance practices, by introducing technology-neutral distribution of meeting materials and independence of directors on superannuation boards.
We received an insightful update from the regulators’ panel, with APRA’s Geoff Summerhayes noting that complacency is our biggest risk – and to quote Mark Twain – ‘history never repeats itself, but it often rhymes’. ASIC’s John Price discussed how it will focus on investor trust and confidence in its upcoming corporate plan, focusing on the tone set from the top by the board and senior management so that corporate culture supports investor confidence. And ASX’s David Barnett stepped us through the admission rule changes ASX has introduced to ensure there is confidence in our listed entities.
In the second plenary session we heard a conversation on the economy, which quickly turned into a discussion on the implications of recent political changes on the global front and how they will potentially affect the global and domestic economies – namely Brexit, the election of Trump and the predicted instability of the Euro.
Next the business judgement rule was put under the microscope, with John Stanhope AM, Chairman, Australia Post, raising concerns that directors see the operation of the business judgment rule and the threat of class actions inhibiting them from making meaningful, substantive and frank disclosures in forward-looking statements. This in turn is stifling the take-up of integrated reporting. Dr Ian Woods, AMP Capital, noted that investors feel that the system is operating effectively and that directors’ concerns are exaggerated. Professor Pamela Hanrahan posited a potential way out, suggesting we could look at the inconsistencies in defences for prospectuses and continuous disclosure in the Corporations Act.
Dr Mike Briers, Chief Executive and Founder of The Knowledge Economy Institute, discussed the impact of big data and how latest technologies are challenging conventional economics.
We later examined innovation in action, and how top executives are encouraging and harnessing cultural change to encourage staff to challenge the status quo. The panel flagged game-changers Netflix, airbnb and Uber as models of how any organisation can be ‘out-competed’, noting that organisational structures need to be flexible in order to meet the needs of innovation.
In the penultimate session, John Price reinforced why ASIC is focused on culture, and how companies, not only the regulators, should consider the implications of poor culture as a driver of poor conduct. Peter Wilson, Chairman, AHRI, pointed out that there are hard metrics available now that companies can use to measure culture – saying that ‘it is too hard’ is simply not good enough.
Closing out day one of the conference, Brett Warfield and Matthew Craft introduced us to the eye-opening prevalence of corporate crimes and the common indicators to look out for within organisations. The key advice was that internal controls must be tested, and reporting mechanisms in place to allow employees to come forward if they feel that ‘something does not smell right’.
John Bell, doyen of the theatre, gave us an inside view of his leadership style in two theatre companies over many years. He confirmed that the tone must be set from the top and cascade throughout the organisation.
Overall, it was a thoroughly enjoyable day – looking forward to more updates and insights during today’s sessions.