The Amplification Principle – 2024 Annual Governance Study now available

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Why is it that some organisations can maintain effective governance without feeling like they are juggling a dozen balls at once? The secret lies in the Amplification Principle…

…where assurance activities are a safety net, ensuring operations run smoothly, ethically and in alignment with the rules. The 2024 Australian Annual Governance Study explores how behind-the-scenes assurance activities don’t just support governance, they supercharge it, turning it from a box-ticking exercise into a strategic advantage.

Let’s break it down and explore what the study uncovered about Australian organisations.

Assurance: The Glue Holding It Together

Assurance might sound like something a supportive colleague gives you before sending you on your way, but in governance, it’s all about confidence. Think audits, risk assessments, and compliance reviews—tools that help organisations stay on track, avoid mishaps and build trust with stakeholders.

The good news? Over 60% of our organisations are weaving assurance into their everyday activities, making it second nature. The not-so-good news? Nearly half still don’t review whether all these checks and balances are actually working together. It’s like setting up a fire alarm but never testing the batteries.

Governance and Assurance: A Perfect Pair

Governance tells us what should be done—setting goals, rules and expectations. Assurance, on the other hand, checks if it’s being done right. Together, they’re like peas in a pod, creating a system that ensures accountability and transparency.

The study emphasises this “amplification principle.” When assurance works well, it doesn’t just validate governance—it elevates it. Suddenly, decision-makers have the confidence to steer the ship through any type of waters without losing sight of the horizon.

Where We’re Nailing It (and Where We’re Not)

Compliance and Risk Management

Most organisations have the basics down, keeping operations in line with laws and policies. Two-thirds of Australian businesses have embedded compliance into their daily routines, which is a solid step forward.

But here’s the kicker: 40% don’t have proper controls for decision-making to ensure compliance. And about half aren’t reviewing the overall impact of their compliance efforts. That’s like driving a car without checking if the brakes work.

Risk mitigation is another hot topic. The study found over 70% of organisations bake risk management into their decision-making process, which is fantastic. Proactively identifying risks means fewer nasty surprises down the road.

The Money and Resources Factor

Assurance isn’t just about rules, it’s about making sure every dollar and resource is used wisely. From financial audits to protecting intellectual property, organisations are finding ways to safeguard their assets.

Here’s a fun fact: Around 60% of workers know their limits when it comes to decision-making authority. That’s great, but it leaves room for improvement, especially when misuse of power can lead to inefficiencies and risks, or MUCH worse!

Trust and Accountability: The Heart of Governance

Trust is the name of the game. And while Australian organisations are good at holding individuals accountable (think employees hitting their KPIs), they’re less consistent when it comes to properly and independently reviewing boards and committees.

Only half of organisations systematically assess how effective these groups are. An independent review periodically would make a world of difference, providing fresh eyes and actionable insights.

Ethics: Talking the Talk, Walking the Walk

The study highlights that most organisations behave ethically; great news for public trust. But there’s a catch: only two-thirds articulate leadership values like transparency and integrity. And 83% don’t have a communication strategy around ensuring governance, compliance and assurance.

Translation? Organisations might be doing the right thing but aren’t always great at letting the world (or even people within the business) know about it.

Room for Improvement in Performance

Half of those surveyed aren’t using performance reports to guide assurance activities. It’s a missed opportunity, especially since these reports can pinpoint inefficiencies and inspire improvement.

Regular audits and performance reviews not only keep things running smoothly but also boost morale. When leaders and employees see tangible improvements, it’s easier to stay motivated and aligned with organisational goals.

What’s Next?

The takeaway here is clear: assurance activities are more than a regulatory box to tick, they are tools to strengthen governance, optimise resources and build trust. By taking steps like embedding compliance into day-to-day operations, conducting independent reviews, and communicating more effectively, Australian organisations can move from good to great.

For actionable insights, download the free 2024 Australian Annual Governance Study, which offers tips and resources to implement the Amplification Principle. Our previous studies and other free tools, such as the Better Practice Governance Model, the Governance Maturity Self-Assessment Tool, and the DIY Building Better Governance Toolkit, are also available online.

By prioritising assurance activities, Australian organisations can transform governance from a functional necessity into a force for resilience and positive change, ready to tackle future challenges.

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View the 2024 Annual Australian Governance Study here.

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