April 2015 - Australian Institute of Company Directors

QLDdirector
Issue 54 | APRIL 2015
companydirectors.com.au
INSIDE
2 State Manager update
3 Shareholder engagement
in the Age of Activism
4 Brisbane events
4 Introducing
John Brogden AM FAICD
5 Regional events
5 NFP governance – how do
you measure success?
6 Diary dates
6 Welcome new members
The Honourable Joe Hockey MP speaking at our recent Leaders’ Edge Lunch
The need for a grey army
Leaders’ Edge Luncheon with the Hon J.B. Hockey MP,
Treasurer of the Commonwealth of Australia
Federal Treasurer, the Honourable Joe
Hockey MP, addressed the Leaders’ Edge
Lunch in partnership with Griffith University
Business School on Friday 6 March,
discussing the fiscal and economic
opportunities for Australia over coming years.
Every five years, the Australian Government
produces an Intergenerational Report (IGR)
that assesses the long-term sustainability
of current Government policies and how
changes to Australia’s population size and
age profile may impact on economic growth,
workforce and public finances over the next
40 years.
The Intergenerational Report is the social
compact between the generations – children,
grandchildren, parents, grandparents and
each other. The Treasurer projected that
life expectancy is increasing and will reach
88 years for men and 90.5 years for women.
It will even be higher if you take into account
expected improvement in health and new
technologies.
The Treasurer also advised that for
Australia to drive higher levels of prosperity
through economic growth, we must increase
productivity and participation. If we are to
achieve these goals we need to encourage
those currently not in the workforce, there is
a call to arms for older people to come back
to work and women, to enter, re-enter and
stay in work, where they choose to do so.
It is crucial that we need the grey army.
Our productivity improvement is the biggest
driver of prosperity and income growth.
Invest in new capital and infrastructure,
innovation and technology, entrepreneurship
and competition, skills and education. To
build a stronger Australia, we need to be able
to afford our future. The IGR shows we have
made considerable progress in putting the
budget back on track, although more needs
to be done.
In responding to the IGR, the Government
will continue to promote growth, jobs
and opportunity so that we can relieve
the burden on Australians and unlock the
immense potential of our future.
The Treasurer stated we must continue
to make the changes that unlock the vast
potential of Australia’s future.
NEWSLETTER SPONSORED BY
QLD GOLD CORPORATE PARTNER
Contact us: QLD Division, GPO Box 73, Brisbane QLD 4001 t: 07 3222 5500 f: 07 3222 5522 e: [email protected]
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QLDdirector | APRIL 2015
STATE MANAGER UPDATE
Richard Moore GAICD
State Manager,
QLD and International (Pacific)
Australian Institute
of Company Directors
In a recent discussion, an
important issue was raised
around the role of the board
to effectively manage its own
succession risk. It was agreed
one of the key roles of any board
is to continually ensure that it
has the right set of skills, talents
and attributes represented in its
board members.
There is an increasing
demand for highly qualified,
dedicated, conscious and
talented directors who truly
add value to the organisation.
A conscious board will develop
a succession plan that provides
guidance on identifying and
sourcing potential board
members who can fulfil key
requirements. This succession
plan helps appoint new
directors quickly in a structured
manner, and the board can
continue its business without
disruption, meeting any
business challenges that are
encountered.
When developing the board’s
own succession, the key
questions to be asked include:
• What skills, talents
and attributes does our
organisation require?
• What current gaps are
there on the board?
• How do we find people
with these skills, talents
and attributes?
• Once we have found the
people, how do we attract
them to our board?
Effective succession planning
also involves:
• Clearly defined roles for the
chair and board members
• An effective performance
management structure
that enables identification
of potential successors to
the chair; and recognition
of the gaps between the
board members’ current sets
of competencies and the
competencies required to
credibly step up to the chair.
QLD Division, GPO Box 73, Brisbane Qld 4001
t:07 3222 5500 f:07 3222 5522 e:[email protected]
Newsletter written by: QLD State Office. For more information or to submit content, contact us.
Disclaimer: The opinions expressed in QLD Director do not necessarily represent the views of the Australian Institute of Company Directors nor the publication. While every effort has been made to ensure accuracy, no
responsibility can be accepted by the publisher for omissions, typographical or printer’s errors, inaccuracies or changes that may have taken place after the publication. All rights reserved.
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Shareholder engagement in the age of activism
– Are you ready for the active shareholder?
Understanding the
activists’ agenda
Sally Freeman
National Managing Partner
Risk Consulting, KPMG
With the newspapers filled
with stories of a rising tide in
shareholder and stakeholder
activism in Australia,
boardrooms have to be asking
this question.
Shareholder activism can
occur from different ends of the
investor spectrum - wealthy
and influential investors, small
share-owners, now being joined
by superannuation funds and
other shareholders that are
stepping up their engagement
with organisations.
Australia is seeing a dramatic
increase in activism, which
has traditionally been more
prevalent in the US. The noise
around the Westfield demerger
in 2014, Solomon Lew’s stake
in David Jones and the Seven
Group’s failed attempt to acquire
Nexus Energy, all serve as
recent examples of increasing
activity among shareholders
and the shifting dynamics
within the Australian business
environment.1 We have seen
the financial services sector
specifically targeted for their
funding relationship with
companies perceived to be
environmentally damaging.
Activist investors are looking for
opportunities to disrupt and are
challenging boards and executives
across areas of governance,
strategy, operations and
sustainability – all in the name of
maximizing shareholder value.
Even in the US, where
activism has been more
commonplace, companies
are often caught on the hop,
generally responding to
campaigns rather than being
ahead of them. Australian
companies need to learn from
those lessons and prepare for
threats before they happen.
Performing vulnerability
assessments is key. These
assessments offer boards an
independent understanding of
the risks and opportunities facing
their companies and position them
to address risks and challenge
management to improve longterm performance, before an
activist comes knocking.
In order to be truly strategic,
boards and management should
be addressing the issues that
currently attract activists and
trying to anticipate the likely
issues of the future. Building
strong relationships with
shareholders is a critical part of
the solution.
Stakeholder
engagement
The board’s role in
overseeing the development
and implementation of the
stakeholder engagement
framework is also key. Boards
should be identifying those
stakeholders with whom
they should be establishing
relationships, both formally and
informally, and implement an
engagement plan.
Social media
Social media allows for an
unprecedented ability to gather
and communicate to mass
audiences. Shareholders can
locate one-another, connect and
cooperate to achieve disruptive
ends.
Activists are increasingly
using social media to launch
attacks. This poses multiple
risks to the company and puts
the board, management and
the company’s response in the
spotlight.
A well thought through
social media strategy can help
organisations manage these risks
and should form part of the
broader stakeholder engagement
framework. The strategy should
establish a framework that
provides for a high degree of
coordination between corporate
communications, investor
relations, management and
the board and is supported
by monitoring and escalation
procedures.
The cornerstone of an
effective ongoing social media
risk management strategy
is an effective intelligence
monitoring program, which
should intimately know the risk
landscape, risk-relevant issues,
communities and web- locations,
for each brand and be sensitive
to emerging risks - ensuring that
organisations are first to know
when a campaign originates,
why it has emerged, who is
driving it, and its likely and
possible material impact.
An effective social media
strategy also contains provision
for fast action. Monitoring
without action is largely inept
in a crisis situation. Company
statements and other official
collateral should be devised to
suit the nature of the concern
and disseminated to key
audiences.
Organisations should be
assessed, at least annually, for
the social media risk exposures
that they face from reputational,
operational and compliance
aspects.
The Board’s role
Boards’ natural aversion to
risk is often a key driver in the
corporate adoption of a social
media risk strategy. Proper social
media processes are resourceintensive, and therefore budget
must be allocated.
Investor relations has
traditionally been underprioritised by social and, more
broadly, digital media programs,
as organisations have been more
focused on customers, brand
detractors and political/public
figures. Investor relations has
a key interest in social media,
and with the rise of shareholder
activism, boards should ensure
that investor relations are being
serviced through digital means.
In conclusion, Australian
shareholder activism is on the
rise. Directors need to be raising
this as a discussion item at board
meetings, taking a fresh look
at stakeholder engagement,
the organisation’s social
media strategy and the use of
vulnerability assessments as a
best practice strategy for being
prepared.
1
The Australian, 2 October 2014,
Corporates beware: hedge funds activists
are heading here to wreak havoc
Sponsorship Opportunity
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this newsletter, this is a unique opportunity to provide relevant thought leadership on the issues that face directors. If you are interested
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QLDdirector | APRIL 2015
Brisbane events
To find out more or to RSVP contact Elly Trend t: 07 3222 5500 e: [email protected]
Impacts of the
foreshadowed
amendments
Insights on
strategies for
continued success
Director Briefing: Competition & Consumer Act 2010
Leaders’ Edge Lunch Series: Jon Sutton MAICD,
Managing Director and Chief Executive Officer,
Bank of Queensland
Cooper Grace Ward (CGW) is a leading Australian law firm servicing
clients with a local, national and international presence. Hear from
our panel as they discuss the upcoming changes to the Act for
directors, boards and businesses.
Date: Wednesday 22 April 2015
Time: 5.30pm for 5.45pm to 8.00pm
Venue: Cooper Grace Ward Lawyers offices
Cost: Member $66.00
Non-member $80.00
To register
w: companydirectors.com.au/events
QLD Gold Corporate Partner:
This is a unique opportunity to hear from our guest speaker as he
discusses his strategy to ensure Bank of Queensland’s continued
success and explains why Australian customers still want and need
a multi-tiered banking system.
Date: Tuesday 9 June 2015
Time: 12.00pm for 12.30pm to 2.00pm
Venue: Hilton Hotel Brisbane
Cost: Member $140.00
Non-member $160.00
Table of 10 $1,400.00
To register
w: companydirectors.com.au/events
Sponsored by:
Leaders’ Edge Lunch Partner:
Introducing John Brogden AM FAICD
John Brogden joined the
Australian Institute of Company
Directors as Managing Director
and Chief Executive Officer in
January 2015.
He is responsible for leading
the overall organisation,
representing directors on
policy issues, maintaining
excellence in education
and building stakeholder
understanding of directorship
and governance.
John was CEO of the
Financial Services Council
(FSC), which represents
Australia’s retail and
wholesale funds management
businesses, superannuation
funds, life insurers, financial
advisory networks, trustee
companies and public trustees
from 2009 to 2015.
In 2006, John was
appointed CEO of health
insurer Manchester Unity,
which he successfully merged
with HCF in 2008. From
2006 to 2009, John was
the Chairman of Abacus
Australian Mutuals, the body
representing Australia’s credit
unions and building societies.
From 1996 to 2005, John
was the Member for Pittwater
in the NSW Parliament. From
2002 to 2005 he was Leader
of the Opposition.
John is the Chairman of
Lifeline and Chairman of
UrbanGrowth NSW, a Director
of NIA Pty Ltd and Chairman
of Furlough House Retirement
Village. John is also the Patron
of Sailability Pittwater, Bilgola
Surf Lifesaving Club and Avalon
Beach Surf Lifesaving Club.
In January 2014, John
was made a Member of the
Order of Australia (AM)
for significant service to
the community through
representational roles with
social welfare organisations,
particularly Lifeline, to the
business and financial sectors
and to the Parliament of New
South Wales.
He is a Fellow of the
Australian Institute of
Company Directors (FAICD)
and holds a Masters of Public
Affairs (MPA) from the
University of Sydney.
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QLDdirector | APRIL 2015
Regional events
To find out more or to RSVP contact Jess Will
t: 07 3222 5500 e: [email protected]
Insights on leading with influence
Townsville Business Leaders’ Luncheon with Alison Watkins
FAICD, Group Managing Director of Coca-Cola Amatil
Wednesday 15 April 2015
12.00pm to 2.00pm
Jupiters Townsville Hotel and Casino
Member: $65.00
Non-member: $75.00
Table of 10: $650.00
To register
w: companydirectors.com.au/events
QLD Gold Corporate Partner:
Sponsored by:
Cotton Australia: where to in 2015?
Toowoomba Business Leaders’ Breakfast with
Adam Kay GAICD, Chief Executive Officer, Cotton Australia
Friday 24 April 2015
7.00am to 9.00am
Empire Theatres Toowoomba
Member: $60.00
Non-member: $70.00
Table of 10: $600.00
To register
w: companydirectors.com.au/events
QLD Gold Corporate Partner:
Sponsored by:
See what’s in store for the
economy and financial markets
2015 Regional Economic Forecast Breakfasts
NFP governance –
how do you
measure success?
The not-for-profit (NFP) sector
has seen a range of reforms over
recent years at Federal, State
and Territory levels. While much
of this reform has been positive,
there is still uncertainty
for organisations including
regulatory changes, funding
sources and changing business
models. This uncertainty is
causing many organisations
to re-think their purpose and
structures.
Many NFP directors are
searching for a way to find
performance indicators
that clearly show how an
organisation is achieving its
purpose. This is complicated
by the difficulty in gauging
outcomes when an
organisation’s impact can take
years to become visible.
In some cases, outcomes may
never be quantifiable.
Donors and other funders
increasingly want to measure the
return on their social investment
in NFPs, increasing the pressure
on boards to find better ways to
measure what they do.
According to our most
recent NFP Governance and
Performance Study, some 60
per cent of NFP directors are
looking for more or better
ways to determine if their
organisation’s strategy is
achieving its purpose.
For most NFPs, this aspect
of performance measurement
comes down to evaluating
quality and impact. Quality
– though by its nature a
qualitative outcome – can often
be quantified in some way.
Measuring the impact of an
NFP’s operations is more complex.
As one senior NFP director
recently observed “Impact, for
almost all NFPs, is a long-term
issue.”
“We want to evaluate if the
service we’ve provided or the
research we’ve done has actually
made a difference to someone.
Usually that is a long-term
consideration.”
Much work has been done
to compare social returns on
investment in order to choose
between alternative investments;
however, these assessment
frameworks have not yet yielded
evaluation structures that
produce consistent results when
used by different evaluators. In
addition, some NFPs are tackling
problems where there are no
agreed solutions to test, or which
could take decades to diminish.
There is no silver-bullet in
this discussion and given the
considerable diversity in the
NFP sector the answer may be
different for each organisation.
However, it’s a conversation
that should be in every NFP
boardroom across the state.
If you are looking at gaining
a further understanding in
the NFP sector enrol in our
course Advanced Not-for-Profit
Governance on the 22 April to 23
April 2015. Refer to our courses
calendar for further details.
Cairns Tuesday 19 May
Townsville Wednesday 20 May
Mackay Thursday 21 May
Central Queensland Friday 22 May
Sunshine Coast Tuesday 26 May
Toowoomba Wednesday 27 May
Gold Coast Thursday 28 May To register w: companydirectors.com.au/events
QLD Gold Corporate Partner:
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Diary dates
Events
Courses
Brisbane events: Julie Anderson or Elly Trend t: 07 3222 5500
Regional events: Annette Bales or Jessica Will t: 07 3222 5500
Courses enquiries: Christina Fenton or Kerri Giesemann
t: 07 3222 5500 w: companydirectors.com.au/In-My-State/QLD
9 to 10 April
24 April
Company Directors
Course Update
The Brisbane Club
9.00am to 4.00pm (both days)
Toowoomba Business
Leaders’ Breakfast
with Adam Kay GAICD
CEO, Cotton Australia
Empire Theatres
7.00am to 9.00am
10 April
Foundations of Directorship
Governance for Directors
Treasury Casino & Hotel
8.30am to 4.30pm
14 April
Gold Coast
Members’ Evening
with Annabelle Chaplain FAICD
The Arts Centre
5.45pm to 7.30pm
15 April
Townsville Business
Leaders’ Luncheon
with Alison Watkins FAICD,
Group MD, Coca-Cola Amatil
Jupiters Townsville
Hotel and Casino
12.00pm to 2.00pm
22 to 23 April
Short Courses
Advanced Not-for-Profit
Governance
Customs House
8.30am to 4.30pm (both days)
22 April
04854-1_15
Directors Briefing
Impacts of the foreshadowed
amendments to the Competition
& Consumer Act 2010
Cooper Grace Ward Lawyers
5.30pm to 8.00pm
Welcome new members
Our monthly newsletter will help keep you informed about local initiatives,
regulatory reforms and professional development opportunities in your
region, which should help you be the best director you can be.
Juliette Sperber Townsville
Blake Repine Central QLD
Prof Mark Kendall Brisbane
Graham Blight Sunshine Coast
Richard Gibb Brisbane
Dr Kathleen Turner Brisbane
Dr Jonathan Mason Sunshine Coast Jane Pickels Mackay
Gavin Mackenzie Brisbane
Gina Lacey Mackay
Travis Green Brisbane
Anne Baker Mackay
Janet Moore Brisbane
Barbara Stranks Central QLD
Karl Newman Brisbane
Cameron Geddes Central QLD
David King Brisbane
Ross Burnett Central QLD
Marian McLean Brisbane
Nigel Burnett Central QLD
27 April to 1 May
Helen Towler Townsville
Melissa Wells Central QLD
Company Directors Course
Five-day course
Customs House
9.00am to 4.30pm (each day)
Timothy Barker Brisbane
Mark Pearce Brisbane
Carolyn Kirk Brisbane
Kevin Standish Brisbane
David Gibson Sunshine Coast
Nik Babovic Central QLD
Peter Callaghan Sunshine Coast
Cameron Currie Toowoomba
Kate Spencer Brisbane
Liam O’Donnell Brisbane
Louise Broekman Brisbane
Juhani von Hellens Brisbane
Darren Carlson Sunshine Coast
Jim Crane Brisbane
Greg Ferguson Brisbane
Shane Hansen Brisbane
Andrea Bialocerkowski Gold Coast
Dr Richard Valenta Brisbane
Sarah Meibusch Brisbane
Robert Crowe AM Toowoomba
Lisa Curtis Central QLD
Greig Duncan Brisbane
Lisa Morgan Brisbane
Kate Klease Brisbane
Phillip Ryan Brisbane
Cameron Smith Brisbane
David Cook Brisbane
Dr Alexandra Fisher Brisbane
Louise Hickson Brisbane
David Haynes Brisbane
Graeme Sherlock Brisbane
Chistopher Rodgers Brisbane
David Collins Gold Coast
Nicholas Walker Gold Coast
Ian Hall Brisbane
Louise Edwards Gold Coast
Daniel Matthews Cairns
Prof Gerald Holtmann Brisbane
Haseda Fazlic Brisbane
Peter Freeleagus Mackay
Sharon Smith Brisbane
Rebecca Freath Gold Coast
Mark Tobin Brisbane
Delville Wheeler Mackay
Melissa King Brisbane
Elizabeth Howard Brisbane
Nicos Violaris Brisbane
Caroline Bennison Gold Coast
Alan Angus Brisbane
Andrea Harcourt Brisbane
Brett Hooker Brisbane
Murray Freeman Brisbane
Edin Bosnjak Brisbane
Anthony Ferris Sunshine Coast
Gary Bone Gold Coast
Cornelis Keyser Brisbane
Ilse Schache Brisbane
Eric Richman Brisbane
Jacqueline Payne Brisbane
Steven Sergeant Townsville
Michael Brittliff Brisbane
Amy Phillips Cairns
1 May
Foundations of Directorship
Finance for Directors
Treasury Casino & Hotel
8.30am to 4.30pm
4 to 8 May
Company Directors Course
Five-day course
The Brisbane Club
9.00am to 4.30pm (each day)
11 May
Short Courses
The Board and the
Company Secretary
The Brisbane Club
8.30am to 12.30pm
13 to 17 May
Company Directors Course
Sunshine Coast
Five-day course
Oaks Oasis, Caloundra
9.00am to 4.30pm (each day)
Michael Thomason Brisbane
Henry Barnes Sunshine Coast
18 May
Scott McMullen Brisbane
Deborah Bonel Sunshine Coast
Short Courses
Establishing Boards
for Business Owners
The Brisbane Club
8.30am to 12.30pm
Toni Hawkins Brisbane
Deborah Friel Central QLD
Raylene Boulter Brisbane
David Carey Mackay
Trent Fuller Brisbane
Simon Cook Brisbane
Bernard Tobin Brisbane
Sandra Haines Brisbane
Naomi Blake Brisbane
Andrew Messer Brisbane
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