Avoiding ‘tick the box’ governance reporting

Governance Institute has presented two important awards recognising excellence in governance reporting.

At the recent Australasian Reporting Awards (ARA) we were delighted to announce Transurban as the winner of the Special Award for Governance Reporting (private sector) and the Judicial Commission of NSW as the winner of the Special Award for Governance Reporting (public & not-for-profit sectors).

We spoke to the winning organisations about their approach to governance reporting.

Incorporating key issues into governance reporting

Transurban’s General Manager Corporate Affairs & Investor Relations, Jessica O’Brien said reporting is more than a ‘tick the box’ exercise.

“We put a lot of effort into finding out what our stakeholders want to hear about and we use their feedback to inform what we report on,” she said.

“Governance disclosures are more than a compliance task, they’re an opportunity to demonstrate that boards and management are alive to the relevant governance issues impacting a company, and understand the importance of effective corporate governance to the long-term success of a business.”

Clear and definitive reporting

Judicial Commission of NSW’s Chief Executive Ernest Schmatt said the organisation has placed a focus on reporting “clearly and definitively”.

“It goes without saying that good governance is essential for organisations to achieve their objectives and flourish,” Mr Schmatt said.

“The Commission recognises that good governance requires a deep understanding of best practices and leadership. This is where the ARA has helped the Commission over the years. The fact that the Commission started reporting on its governance to the standard expected by the ARA meant it had to report clearly and definitively on the elements of good governance that it practiced.

“Among other things, the Commission followed and carefully reported on the eight corporate governance principles enunciated by the ASX and in particular how the Commission practiced transparency, accountability, risk management and integrity.”

Delivering more than financial returns

Transurban’s Ms O’Brien said that Environmental, Social and Governance (ESG) issues are an ongoing focus – and transparency is key.

“We know it’s more important than ever to deliver more than just financial returns. We’ve set ourselves high standards for our performance across ESG issues, and transparent disclosure is key to doing this in a meaningful way,” Ms O’Brien said.

“Our Corporate Report is only one example of this, and ESG news and updates also feature prominently on the Transurban website, across our social media channels and in conversations with our investors and other stakeholders.

“We also participate in a variety of external rating programs that assess our policies and performance across a range of ESG areas, and compare us to other organisations globally.”

Which reporting framework should you choose?

Ms O’Brien said it is important to keep up-to-date with ever-changing reporting trends.

“Reporting trends are always evolving, and there are many ESG reporting frameworks out there, so a key challenge can be determining which ones are most relevant for us as a business and useful for our audience.

“Ultimately, stakeholder feedback and evolving market practice will always inform which frameworks we land on and our reporting will continue to evolve in line with this.”

Reporting in uncertain times

Reporting – and timely disclosures – have become increasingly important during turbulent times.

“World events this year have highlighted that reporting is a crucial tool for informing stakeholders about a businesses’ strategic direction in uncertain times and underscored the importance of clear and timely disclosures,” Ms O’Brien said.

Judicial Commission of NSW’s Mr Schmatt said reconciling risks with the current economic disruption and changing demographics is likely to become increasingly difficult.

“In these circumstances, improved governance into the future may require organisations to become even more adept at using technology and what it has to offer, not as a master but as a servant to achieve beneficial outcomes for the organisation in particular and society in general.”