Emerging trends and change pressures in Corporate Governance was presented by Blue Zoo at a Chartered Institute of Management Accountants (CIMA) professional development event in April 2015.
The discussion included what are the forces shaping where Corporate Governance is today. What are some of the key trends and pressures most relevant in Australia, and what is the future outlook. (Note – Slides Only)
There are lots of change pressures and trends however, the session focused on four:
Director’s have an obligation for due diligence which implies that they have a responsibility to understand the company’s risks thoroughly, and ensure best and right practice risk capabilities. Many recent changes targeting Director’s role in risk oversight e.g. Changes to ASXCGC Principles and Recommendations, CPS220 – Risk Management focusing on culture and marrying hard and soft risk skills, etc.
Digital Literacy and IT Governance
Information is a key resource!!! Information technology is increasingly advanced and underpinning all we do. There is no room for ignorance, but new technologies and IT governance issues continue to challenge directors. IT governance is now an important responsibility of boards.
Better Board Composition and Diversity
A board needs to have the right group of people having particular regard to each individual’s background, skills and experience, and how the addition of an individual builds the collective capability and effective functioning of the board. (Board Dynamics) Recent changes including ASXCGC Principles and Recommendations – Gender Equality indicators, Inductions and Professional Development; Workplace Gender Equality Agency Act 2012, etc.
Tone at the Top – and Now in the Middle
Tone at the top approach assumes strong ethical leadership will trickle down, but it doesn’t work in isolation. Lots of organisational change, independent work and increasing knowledge-work has impacted the behaviors of middle management, who disproportionately influence employees. Need to ensure we are building a supporting culture of ethical leadership in the middle.