Your governance and risk success guide for 2023
With reforms sweeping Australia and the globe, 2023 is set to be a big year for governance and risk professionals. Governance Institute outlines five major issues and how leaders can successfully prepare for their arrival.
Voice to Parliament
2023 will see the First Nations Voice to Parliament go to a referendum.
The goal of First Nations Voice to Parliament is to give Aboriginal and Torres Strait Islander people a constitutionally recognised pathway to help inform policy and legal decisions that impact their lives.
These three historic sentences are part of the government’s consideration to add to the Constitution and therefore be voted on in the 2023 referendum, with final details to come at a later date:
- There shall be a body, to be called the Aboriginal and Torres Strait Islander Voice.
- The Aboriginal and Torres Strait Islander Voice may make representations to Parliament and the executive government on matters relating to Aboriginal and Torres Strait Islander peoples.
- The Parliament shall, subject to this constitution, have power to make laws with respect to the composition, functions, powers and procedures of the Aboriginal and Torres Strait Islander Voice.
Empowering the Voice to Parliament is the Uluru Statement — an invitation to all Australians to help support Voice to Parliament and help Indigenous people achieve a rightful place in their homeland.
2023 success tips
To prepare for the referendum on a First Nations’ Voice to Parliament, you can:
- read the Uluru Statement and understand the background to the Voice to Parliament proposal — From the Heart website.
- create clear and open communications channels with Indigenous organisations and learn about the challenges facing them
- consider how your organisation’s actions and frameworks affect Indigenous populations. By being active participants at the decision-making table, Indigenous people can craft health, housing, employment, and education (and many other) policies that work for them
- listen to Noel Pearson’s Boyer Lecture series.
The International Sustainability Standards Board (ISSB) is close to finalising IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (draft S1) and IFRS S2 Climate-related Disclosures (draft S2).
Once finalised, the standards will form a comprehensive global baseline of sustainability-related disclosures designed to meet the information needs of investors in assessing enterprise value.
While sustainability reporting isn’t mandatory in Australia, recent Federal election results have revealed the public care about environment and sustainability issues.
Treasury released a paper on 12 December seeking initial views on key considerations for the design and implementation of the Government’s commitment to standardised, internationally‑aligned requirements for disclosure of climate‑related financial risks and opportunities in Australia.
2023 success tips
Sustainability reporting is a complex web. Major items to be across in 2023 include:
- Reputational risk: Increasingly, Australians factor environmental, social and governance (ESG) issues when considering whether to engage with an organisation. By ignoring ESG and sustainability, you are exposing your organisation to reputational risk.
- Global risk analysis: Australian businesses operating in the European Union (EU) are subject to their sustainability requirements, and non-compliers will face penalties.
- Regulators eye greenwashing: Organisations guilty of greenwashing (intentionally or otherwise) will face Australian Securities and Investment Commission (ASIC) penalties. Make sure your actions match your strategy. Statements about ‘green’ initiatives must be accurate and able to be substantiated.
‘Whistleblowing’ in the public sector
With reforms to the Public Interest Disclosure Act proposed, this framework will strengthen in 2023.
The new proposals will:
- enforce a ‘positive duty’ to protect public sector whistleblowers
- strengthen protections for disclosures and introduce protections for witnesses
- enhance the oversight roles of the Ombudsman and Inspector-General of Intelligence and Security
- facilitate the reporting and sharing of information, improve the allocation and investigation processes for authorised officers and principal officers
- remove solely personal work-related conduct from the scope of disclosable conduct
- tackle corruption through transparency and accountability.
The proposals complement the newly formed National Anti-Corruption Commission (NACC), which gives public sector employees an avenue to raise integrity concerns.
2023 success tips
Employees are often the best people to identify and report organisational corruption, yet many employees don’t act due to concerns their reports will fall on deaf ears. To support the new Framework, you can:
- identify corruption by auditing your origination’s culture, frameworks and processes
- foster a culture that values transparency and accountability
- ask employees for honest feedback – and take their responses seriously
- ensure whistleblowers are treated in accordance with the new amendments.
Several high-profile cybersecurity attacks have expediated changes to Australia’s Privacy regime, with the Federal Government passing the Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022 as an initial measure while it addresses a bigger reform agenda of Australia’s privacy laws.
The amendments passed include the following:
- increased penalties (from $10 million to $50 million); or three times the value of any benefit obtained through the misuse of information; or 30% of a company’s adjusted turnover in the relevant period
- expanded powers for the Australian Communications and Media Authorities (ACMA), increasing their ability to share information
- supplied greater information sharing and enforcement powers to the Office of the Australian Information Commissioner (OAIC) to address privacy breaches.
- changes to the extraterritorial jurisdiction of Australia’s Privacy Act mean foreign companies undertaking business here are also subject to the amended laws.
2023 success tips
Failure to take privacy seriously can result in multi-million-dollar fines and fatal damage to an organisation’s reputation, intellectual property (IP) and infrastructure.
To meet cyber challenges head-on, you can:
- study the Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022
- place data and cybersecurity at the top of your risk register
- instil regulator-backed cyber resiliency best practices to protect privacy
- create a crisis communications plan.
On 28 November, the Federal Government passed the Respect@Work Bill, legislating the recommendations by Australia’s Sex Discrimination Commissioner Kate Jenkins in the Respect@Work: Sexual Harassment National Inquiry Report (2020), which was a call to action for governments, businesses and the community to more effectively prevent and address workplace sexual harassment.
The laws to implement the Respect@Work recommendations via the Act will:
- prohibit hostile work environments
- introduce a positive duty on employers meaning they will now have to take steps and show, if asked, that they’re proactively trying to eliminate sex discrimination ‘as far as possible’
- give powers to the Australian Human Rights Commission (AHRC) to enforce the positive duty obligations, and, if they’re not, enforce some of the measures
- allow the AHRC to conduct inquiries into systemic unlawful discrimination and try to expose exactly what factors drive it
- allow for representative claims, removing existing procedural barriers on representative bodies that lodge a complaint on behalf of one or more affected persons in the AHRC (a representative complaint)
- mandate public sector gender annual reporting in line with obligations existing on private entities.
2023 success tips
- These laws will shift the burden away from workers and onto employers to take ‘proactive and preventative action’ to ensure no prohibited conduct occurs in the workplace.
- It defines a hostile workplace environment as one where:
‘a reasonable person, having regard to all the circumstances, would have anticipated the possibility of the conduct resulting in the workplace environment being offensive, intimidating or humiliating to a person of the sex of the second person by reason of their sex or characteristics that generally appertain or are imputed to persons of their sex’.
- Employers must take care to ensure that a culture of sex discrimination or harassment does not develop in their workplace. Find out more about the new laws mean for all Australian workplaces here.
Thank you for supporting our drive for good governance.
We wish you a very happy holiday season and a peaceful and prosperous New Year.
Our offices will be closed from Friday, 23 December 2022 and reopen Monday, 9 January 2023.