International Governance Leadership Conference 2024 day two: Key takeaways, ideas and tips from our experts
Day two of the Governance Institute of Australia’s International Governance Leadership Conference 2024 saw a deep dive into technology, geopolitics, poverty and ethics.
With delegates in Melbourne and virtually from around the world, discussions centred on the role of governance in shaping the world we live in.
This report presents the key takeaways and critical conversations from the final day.
Opening address – International keynote – Mind Change
- The effect of modern technology and digitalisation on how future generations think and feel
- Changes to human brain functions – the way we process information, engage, empathise and take risks
- How will this impact the way we work?
- Neuroscience and modern leadership
Baroness Susan Greenfield, World renowned neuroscientist, writer and broadcaster (UK)
Chair: Edward Santow, Industry Professor and Director, Policy And Governance Human Technology Institute
As technology becomes ever more pervasive, people are spending increasing amounts of time immersed in devices, watching, reading, gaming, chatting, and working.
But what are the impacts of increasing device usage on human beings?
“I call this mind change,” said Baroness Susan Greenfield, the world-renowned neuroscientist, writer, and broadcaster.
“It’s comparable, arguably, to climate change. It’s unprecedented, it’s global, it’s multifaceted.”
Greenfield said humans are born with all the brain cells they ever need and as we grow, more and more connections are made between these cells.
“Even if you’re a clone, an identical twin, you’re going to have a unique configuration of brain cell connections. Why? Because these brain cell connections are stimulated and atrophy and forged and modified every single moment you are alive.”
Dubbed ‘plasticity’, this change process allows us to adapt to change.
Greenfield recalls the classic study scanning the brains of London taxi drivers, who are required to memorise street maps, showing they have a measurably larger area in the part of their brains related to memory.
Similarly, after just three weeks, rats kept in enriched environments show stronger brain cell connections compared to rats kept in unstimulating cages.
“A stimulating environment, whether you’re a rat or a taxi driver, means your brain cells can make more connections,” Greenfield said.
“We can therefore ask the question … what is the impact of the unprecedented environment of this 21st century? You can get up in the morning, you can go to work, you can go shopping, you can go dating, and you can play games, without seeing another human being face to face.”
Problems becoming evident from increased technology use include reduced attention span, aggression, addiction, reckless behaviour, low empathy and poor interpersonal skills.
“This is the profile of a volatile three-year-old,” she said.
“When I first suggested this in the House of Lords in 2009 I got a huge backlash, with people saying, ‘Baroness said computers rot the brain’.
“But now, very sadly, I’m being vindicated.”
“The brain does what it rehearses.”
One study that asked young people to sit and think for 10 minutes, with nothing else to do, found many willing to administer electric shocks to themselves rather than be left alone with their thoughts, she said.
“We laugh, but it does speak to the idea of a real change in mentality, of needing to derive constant simulation externally, rather than having an internal narrative that gives you resilience.”
Greenfield said we can think of the human brain as having two modes – feeling, where we live in the here-and-now and focus on external stimuli, and thinking, where internal stimuli are dominant.
Social media is undermining the development of the thinking mode and stunting interpersonal skills.
“In the UK, recently, it came to a head with the very sad case of Molly Russell, who killed herself.”
“This was the first example, certainly in the UK, where the coroner attributed her death to overuse of the internet or being bullied online.”
Still, things can change. One experiment showed children who gave up their phones and went to summer camp saw improvements within five days.
“Because of the wonderful plasticity of the brain, you know that you can modify and change.”
Fireside chat: Geopolitics and global risk
- Deteriorating global risk outlook
- How geopolitical tensions are driving global insecurity
- Examining the ideological and economic polarisation of regions
- From pessimism to optimism – is there a way?
The Hon Arthur Sinodinos, Asia Pacific Chair, Asia Group (Washington)
Deepa Wadhwa, Fmr Ambassador and Fmr Joint Secretary, Indian Ministry of External Affairs & Non-executive Director, JK Cements, LTIMindtree, Chair, India- Japan Friendship Forum (India)
Chair: Anjali Rao, Award-winning Broadcast Journalist
War in Europe, conflict in Israel, and rising tensions between China and the US – the world is becoming an increasingly uncertain place, said Arthur Sinodinos, former Australian Ambassador to the US.
“It is genuinely quite an uncertain and dangerous time,” he said.
And yet in the US, a new debate is emerging about that country’s role as it loses its position as the world’s sole superpower. Should the US be more engaged in global affairs, or should it take a step back?
The coming election is bringing this to a head.
Kamala Harris promises a continuation of the Biden approach of strengthening alliances and partnerships with like-minded countries. Another Trump presidency could see more selective engagement in the world.
But Sinodinos said one issue unites the parties – winning the tech cold war with China as each of the great powers seeks to deny the other technological advantage.
“In Washington, this is the one issue that seems to unite Republicans and Democrats,” he said.
“It’s a very different world to the one we envisaged maybe 30 years ago, when the US was the sole superpower. Globalisation – free markets, limited government, low tax – was the model for economic prosperity.
“How quickly things change.”
Deepa Wadhwa, former Indian Ambassador to Sweden, Qatar, and Japan, said potential areas of conflict are emerging close to Australia, including tensions in the South China Sea and the growing threat of a rogue North Korea. But the West only selectively exercises its power.
“How many of you in this room know what’s happening in Sudan right now? It’s imploding… millions on the brink of famine. How much do we all talk about this? How much are we aware of this?”
Wadhwa said geopolitics means different things to different people – determined by geography, history and experience – but some challenges are global in nature.
A strike by North Korea on South Korea would have the potential to cripple the global semi-conductor industry and deep repercussions for the global economy, she said.
More broadly, the failure of the world to act on climate change can be directly attributed to geopolitical divisions.
Is there a way forward?
“I think there is,” said Wadhwa.
“You have to resort to diplomacy… there has to be dialogue.”
Another critical point is recognising the importance of the Global South, the collective term for developing and emerging economies in Africa, Asia, and Latin America, she said.
She adds there is a need to rethink the world’s multilateral institutions, which appear paralysed to drive change.
Sinodinos agrees: “Deepa is right – if the UN did not exist, we’d have to invent it. So, it’s frustrating that not much necessarily gets done through it.”
“We really need that intensive statecraft to occur… We all have agency. We all need to step up.”
“It’s the responsibility [of] like-minded countries who are committed to democracy, rule of law, and freedom of the press.”
Public Sector Plenary – Rights-based approach to human development
- Where it succeeds
- How it is challenged and where it fails
- How the public servant serves.
Cris Parker, Head of the Ethics Alliance, The Ethics Centre
The public service plays a critical role in society, upholding rights and freedoms, delivering essential services like education and healthcare, and addressing inequalities.
However, trust in the public service has been falling in recent years, said Cris Parker, who heads the Ethics Centre’s initiative, the Ethics Alliance, a community of organisations across sectors that works collaboratively to shape the future of business ethics.
This is partly a function of failings in recent years such as the Robodebt scandal, which saw the unlawful use of automated debt recovery tools to claw back supposed overpayments to welfare recipients.
“Trusting in our public service is absolutely essential. I actually think it’s probably the sector that requires the most amount of trust. They are the bedrock of our governance,” said Parker.
But the failings of Robodebt can provide a roadmap for public servants seeking to improve trust, she said.
Parker said Robodebt was driven by a singular focus on achieving outcomes, rather than considering the ethical implications of those outcomes, alongside a reluctance to sound the alarm due to a lack of psychological safety within the public service.
As a result, the public service is now doing some remarkable work developing processes, initiatives, and programs that look at addressing this behaviour, she said.
“A lot of energy into psychological safety processes for people to feel confident to speak up. It’s systems that are amplifying the good that’s being done, helping people feel really proud of what they’re doing … with the full aim of strengthening the ethical infrastructure of the public service and ultimately increasing their trustworthiness.”
It takes moral courage to make these changes.
“Moral courage is hugely important, and it’s a way of trying to help people who identify a tension between their own values and what is being required of them,” she said.
“Moral courage is a great term to describe [the] capability that we should build in our employees so that they do feel confident to speak up.
“We want employees speaking up because hypocrisy is the death of ethics.”
How can private organisations learn from this?
“It’s really important that leaders speak in the language of values,” she said.
“This decision has been made because we value this, we care about this, and we behave this way.
“As that sense of ethical behaviour trickles down, it gets picked up by other people… and individuals become ambassadors of behaviour.”
Parker said ensuring people are held to account is important.
“We do not do accountability well, and we’re getting worse and worse at it as we prioritise reputation over purpose.”
“By having an ethical culture and behaviour, you will in fact deliver and develop the reputation, rather than manufacture it for the sake of some form of popularity or engagement.”
Concurrent 1 – Influence of company secretaries on impactful governance
Warren Baillie FGIA FCG
Nicole Birman FGIA, General Counsel and Company Secretary, Car Group Ltd
Chair: Scott Hudson, Managing Director, Australia and New Zealand, Georgeson
What does life as a company secretary really look like? And how is the role changing?
Nicole Birman, General Counsel and Company Secretary at Car Group, the owner of Carsales, relates her business’s rapid expansion from a founder-led startup to a globally active large company.
“The challenge for the company secretary role was bringing in a proper level of governance at an appropriate pace and that was going to be suitable for the culture.”
She relates the story of a shareholder advising her it was unable to lift its stake unless Cars Group improved its ESG rating, forcing her to step up to become the ESG leader for the business.
“As a cosec you do end up taking on a lot of miscellaneous tasks that don’t necessarily have a place anywhere else. You have excellent viewability over the company.”
Warren Baillie, until very recently company secretary at oil and gas giant Woodside, agrees that the role provides access across multiple areas.
“There’s all these things you need to keep on top of… making sure you have the right resources is really important.”
He said in the oil and gas industry the rise of stakeholder and investor engagement and the expectations from stakeholders around how organisations are run and contribute to society has been a challenge.
“Some stakeholders want more gas, some want cheaper gas, some want cleaner gas, some want no gas – working out how you compromise, because you can’t keep everybody happy, is going to be a continuing issue.”
The recent merger with BHP’s oil and gas business brought a large number of new employees to Woodside – along with a large number of shareholders from BHP.
“There’s a lot of integration between two big businesses, in terms of IT, HR, all the obvious things, but in the governance space, there was a lot of integration between policies and processes.”
Increasingly, the company secretary is becoming an important interface to shareholders and proxy advisers.
“It’s definitely something you have to be prepared and comfortable to do to speak to your investors now,” said Birman.
“I certainly have discovered that a few retail shareholders feel quite comfortable contacting me – which I always enjoy.”
Baillie said the tone of the company’s AGM has changed recently as activist investors with small shareholdings make their voices heard.
“We want to be very open to questions and open to different views [and] don’t want to shut things down… but you also have other shareholders that you want to make sure participate.
“It has been an ongoing work in progress.”
He said one solution is holding separate briefings by invitation to help shareholders get better access to the business.
Birman also uses investor day briefings to help shareholders understand the business, which has grown rapidly by acquisition into Korea, Brazil and North America.
Expanding offshore brings unusual challenges, said Birman, with geopolitical considerations, and different economic and social environments.
“As company secretary, it’s really important that you make available all the information the board needs to make those decisions.”
Woodside’s BHP merger has delivered the traditionally Western Australia-based company a very international portfolio, including assets in the US, Mexico and Senegal.
“Some of those offices might be quite small but they take a lot more time and energy to manage,” said Baillie.
“In the governance space, it’s about how best we can support and manage the risks around all of that.”
So how can company secretaries strike the right balance, ensuring governance and managing risk without stifling growth?
“If you’re Chicken Little the whole time – the sky is falling – you’re not going to have the credibility when you really need to pull the reins,” said Birman.
“My philosophy is not to be the handbrake to happiness.”
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Concurrent 2 – Implementing cyber strategy pillars – what is the key work for the humans to implement
Nick Ellsmore, Partner – Cyber, Mantel Group
Katherine Robins, Partner, Cyber Security Services, IBM
Chair: Lyn Nicholson FGIA FCG, General Counsel, Holding Redlich
How can we understand the human element of cyber security?
Nick Ellsmore, a partner at Mantel Group, said much of the focus on protecting against cyber threats centres on building defence against potential attacks, but a better approach is to think about changing the underlying business processes that create the risk in the first place.
“If you don’t store data, you don’t need to protect it,” he said.
“If you ask cyber security professionals to secure a system, they will secure the system.”
“But we actually need to step back before that and… look at whether or not systems can be built and designed in a slightly different way.”
Ellsmore said such cultural change can help solve many cyber security problems. Some 95 per cent of security breaches are from staff just trying to do their job and not being able to because the system does not let them, he said.
“Say ‘dear security team, I have this need, you need to solve this problem for me.’ And the security team needs to recognise that it is their problem to solve that.”
IBM’s Katherine Robins said one key is to know the data you are protecting and understand how to handle it.
“If you know where your data is, then you know what you’re protecting.”
She said organisations should take time to understand their ‘crown jewels’ – the data, systems, or information that, if compromised, would have the most severe business impact on the organisation.
One of the problems of cyber security is the lack of alignment among senior leaders and a growing sense of complacency, so what messages should governance professionals use to get buy-in from senior leaders?
“Security fatigue is a really interesting concept,” said Ellsmore.
“There’s quite a lot of academic research across a whole range of fields – drink driving, road deaths and a whole range of other things – that basically say the same thing: a fear-based message will drive down rates for a period of time, and then it will bounce.”
“What the research said – and what ultimately is important – is we can’t rely on fear as a driver.”
As a result, Australia is seeing more regulation coming in to govern compliance, he said.
“Compliance and regulation is one of the ways that realistically we have to communicate because we have decades of evidence that suggests that without it, we’re not going to do the right thing.”
“But at the same time, we also need the cultural change at boards and at executive levels.”
Robins said cyber security professionals are the “security guards” of the business and tend to be underfunded, meaning bartering and influencing is needed.
So, how can boards help give cyber security the budget it needs?
Ellsmore said generational change will ultimately lead to boards with better IT and online knowledge, improving cyber security governance, but in the meantime, directors need to actively seek the advice they need.
Robins said boards need to be aware that security professionals can have differing backgrounds – with many from a technology and engineering background and others coming from a risk background. This can lead to differing abilities to communicate with boards.
She added more work is needed to understand exposure to third-party risk – as evidenced by the recent CrowdStrike outage, which, while not a cyber breach, still ended up causing widespread outages across many businesses.
The panel also had advice for smaller businesses.
“Try and remove as much security decision making from the organisation as possible,” said Ellsmore.
That means using outsourced cloud-based services from large providers like Google and Microsoft, which have built in security protections.
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NFP plenary – What are we made of – exploring the social compact
- Is poverty man-made?
- How can we better manage shared prosperity?
- The factors impacting equity, poverty and wellbeing – national and global views
- The challenge for youth, ageing and homelessness
Doug Taylor, Chief Executive Officer, The Smith Family
One of the key roles of governance professionals is balancing the internal needs of an organisation with being responsive to the communities in which they live and work, and the customers they depend on, said Smith Family CEO Doug Taylor.
Much of the day-to-day work is consumed with the internal governance and fiduciary duties. That is balanced with thinking about the outcomes the organisation is creating.
But that is not enough, said Taylor.
Instead, governance professionals should look beyond their individual work and consider the collaborative endeavours to solve society’s complex problems.
Poverty is one of the most pressing of these societal issues.
Taylor runs delegates through a thought-experiment – think of a child in your life and ask yourself if they have these advantages: parents that finished school, regular meals, access to the internet, and access to support when they fall behind at school.
“The point of that exercise is to address the myth that people who succeed in life are the ones who are more capable and who’ve worked harder than anyone else.”
“The reality is that for [those of us] successful … we’ve had advantages in life that gives us a head start.”
In contrast, Australians in poverty typically face disproportionate disadvantage.
Taylor said poverty is dynamic, with some 70% of people that move into income poverty bouncing back out.
“But in our nation … about five per cent experience perennial poverty for more than five years, and that’s very much the focus of our work at the Smith family in terms of helping people break that cycle.”
Why does understanding this matter?
“I can guarantee that at some stage in your life … somebody will have some significant life changes where they’ll experience some of the dimensions of poverty that I’ve outlined.”
“So, there’s a bit of self-interest.”
But poverty also brings real costs to the nation – both through actual expenditure and increased social disharmony and conflict.
“And think about the incredible waste of human potential,” he said.
“It’s our biggest opportunity cost as a nation.
“The social compact that has served Western democracies well since the Second World War is at risk. Can we say to young people today that if you invest in your education, you work hard, you pay your taxes, that you’ll be able to provide for you and your future? That you’ll have enough, not the same as everyone, but enough – the essentials of life, financial security, housing, health and education?”
Taylor said focusing on education is an important solution.
“It’s not just about a safety net – catching people when they fall is important, but we want people to build a future.”
“By year nine, a child who experiences disadvantage can be five to six years behind in literacy and numeracy.”
Across OECD countries, school attendance and completion rates are declining.
He said corporations have an important role to play.
“Think about the different frameworks guide your work – social investment, ESG, CSR, shared value – all those things absolutely matter.”
“The key for each of our institutions is to think about two things: our organisational drivers as they relate to the social economy – could be our social license, could be customer expectations, employee engagement, compliance and regulation – but think about our drivers and the contemporary needs of our community.”
The most effective organisations establish a genuine connection and alignment between their institutional drivers and societal needs, said Taylor.
Sports Governance
Brooke Irvine, General Manager Integrity, Equestrian Australia
Darcy Moore, Captain, Collingwood Football Team
Chair: Diane Smith-Gander AO FGIA FCG, Chair, ZipCo and CEDA and Chancellor Elect, University of Western Australia
Sport ties the Australian community together – from children’s weekend games to the highest level of professional competition – and governance is a critical part of how sport engages the community.
“Sport is often and really very sadly characterised by members of the community clamouring for attention. I see board members seeking entitlements in return for their voluntary contributions [and] endeavours from factions to gain disproportionate control of the game,” said Diane Smith-Gander, ZipCo Chair and Chancellor Elect, University of Western Australia.
“This has a real potential to relegate the athletes and the grassroots participants to the role of bit players – and affect negatively the enthusiasm of government [and] supporters to be connected with sport.”
“All of that can be sorted out by good governance.”
Many of the difficulties faced by sporting organisations are similar to the challenges that corporations deal with, said Brooke Irvine, General Manager Integrity, Equestrian Australia.
But sport carries its own challenges – a four-year cycle for Olympic sports, federated models with multiple grassroots clubs, a largely volunteer workforce and elected, not appointed, governance.
In the high-profile world of AFL, pressures are different, said Darcy Moore, Captain of the Collingwood Football Team.
As captain, Moore represents the playing group, while also being a director of the players union, the AFL Players Association.
“And as an athlete, working with different brands [and] competing commercial obligations and conflicts of interest and navigating those things in the spotlight brings about its own challenges as well.”
Moore relates the AFL Players Association’s move to recompose its board to achieve gender equality as the AFLW became established.
“Purely practically, it has made us much more effective as a board,” he said.
A unique feature of sport is the immediacy of results, said Moore, who notes that poor governance can lose games, but good governance cannot win them.
“You have this accountability measure of wins and losses every single week, every single season,” he said.
“Winning games can cover up a lot of issues.”
“You almost need governance processes to just be humming along nicely in the background, and to be kind of out of the organisation’s way,” he said.
So, what are the factors that matter? Good leadership in key roles and stability for organisation, he said.
“That doesn’t always result in top four finishes and premierships, but it gives the organisation the best chance to create a high performing environment.
“Wins and losses in sport – and using it as a way to measure governance – is seductive. It’d be really nice if it was that simple.”
“If you could work out the exact correlation, then we would have won a lot more premierships.”
Irvine reflects on the Australian Human Rights Commission’s investigation into culture at gymnastics in Australia.
“Particularly in smaller sports, [it can be] difficult when we talk about whistleblowing or putting in complaints, because there tends to be a fear of retribution that I’m not going to get selected.”
In response to questions from delegates, the panel also discussed the influence of gambling over sport.
Moore notes that many AFL clubs have moved away from poker machines, but the playing group has mixed feelings about the push to ban advertising of sports betting.
“Gambling, advertising and sports betting … is a relatively recent development in sport, particularly in football,” he said.
“There are really mixed feelings amongst the playing group.
“It’s interesting to consider the experience of watching football and consuming football versus 10 to 15 years ago. It is a different experience because of the sports betting advertising and the way that it dominates around the way the game is covered, which I think, particularly for children, has a massive impact.”
He said the Players Association does not consent to players images being used in gambling advertising, but it is less clear what the outcome of the government review will be.
“There’s a reason why you don’t see players’ individual faces… used in those official gambling partnerships – it’s because the Players Association don’t consent to players images being used.
“There’s an asterisk next to that issue when it comes to governance, and I don’t know where we end up.”
Irvine said Equestrian Australia follows the National Integrity Framework from Sport Integrity Australia which mandates sponsorship from gambling companies must be approved by the national board.
“We haven’t gone into that market yet, as tempting as it is because of the funding that would come our way.”
Closing address: The Founder complex
- How founders influence the pathway of modern organisations
- The ethical dilemmas for founders and leaders of transformative technological organisations.
- How they will affect the future of our world
Stephen Scheeler, former CEO for AU and NZ for Facebook and Instagram
Chair: Megan Motto FGIA FCG, CEO, Governance Institute of Australia
One of the most intriguing and puzzling discussions in the corporate world is the rise of the founder complex, said Governance Institute of Australia CEO Megan Motto.
Many of the world’s most important organisations have been run by strong founders, from Mark Zuckerberg to Elon Musk to Bill Gates, who carry incredible power to drive not just the products and services of the company but also the culture and governance arrangements that set how these businesses are run.
But as a society, do we have the guardrails in place to protect us against the negative effects of this kind of unfettered power?
“When the founder’s vision is transformative, the power it brings can have a really deep impact,” said Motto.
Former Facebook Australia and NZ Stephen Scheeler has a unique window into this challenge.
When he first joined Facebook, it was a small startup with a crash-through culture that was very loosely managed, he said.
“I discovered later I was the oldest person Facebook had ever hired up to that point in time – and in fact I was twice the age.”
That youth is still a feature of the largely founder led Magnificent Seven tech companies that dominate global market capitalisation.
“Those mega founders all became incredibly rich and successful at an unbelievably young age,” he said.
“They have big ambitions about not just building a great company but leaving a dent and mark on society – and I think that’s a unique difference today amongst those mega founders and other great mega founders.”
Does that long term view mean society needs to place some form of ethical overlay over these big companies?
“I don’t think you can expect companies to always behave ethically,” said Scheeler.
“This was the genius and the evil of Google and Facebook – in a world of zero regulation, they managed to hoover up personal data on everybody on the face of the earth before the regulator got on to them.
“Now the regulators are catching up, but they’ve already built multi-trillion dollar businesses – so we’re locking the barn door a little late.”
Scheeler said ethics can often be in the eye of the beholder and reasonable people can disagree.
“It is a challenge for these leaders – it’s hard to just put a finger on the ethically right choice about the business you are building.”
Ethics can also be different in different cultures. He recalls Facebook’s early struggles in Japan, where it was culturally unusual to be connected on social media with a boss or work colleague.
“Every culture can be very different, and what is right in one is not right in another.”
Still, Scheeler said Facebook’s heavily influence over the information ecosystem is disturbing.
“If a Chinese actor was messing with Australia’s information ecosystem … we would be up in arms.”
“It is a mega challenge for us … to think hard about how do we treat these organisations that have the power of a sovereign state, but are not defined as a sovereign state.”
“Having them as free agents that flow around the world and skirt laws is a big problem.”