The Essential Director Update is a series of national events, hosted by Graham Bradley AM FAICD across capital cities in 2016, which present key topics of importance and interest to the director community. The accompanying EDU16 handbook is complimentary to AICD members only. It is an invaluable resource full of business, legislative and regulatory updates designed to complement the series of live events being held around Australia in September and October.
Si bien la Transformación Digital trae consigo nuevos riesgos, implica además la posibilidad de aplicar nuevos modelos de trabajo, apoyados en la tecnología.
La tecnología ofrece la capacidad tanto de mejorar la calidad de la auditoría como de agregarle valor: la auditoría pasa de ser un ejercicio reactivo y retrospectivo a uno proactivo, predictivo y prospectivo, que funciona en tiempo real. Como tal, brinda más oportunidades para ayudar a las empresas a través de información oportuna.
El análisis de datos parece ser el más maduro de los avances tecnológicos
BA and Beyond 20 - Marijke Verhavert and Hans Ponnet - Future-Proof Digital T...BA and Beyond
Sport Flanders and Tomorrowlab have been working together for several years now to explore the future of Sport and to build the business strategy from there. Insights in trends and future customer behavior and a solid understanding of the disruptive technologies that lie ahead is crucial to stay on the map tomorrow.
Since last year, they have strengthened their cooperation with a new pillar: the digital transformation as a crucial next step.
In this talk:
- Future Foresight and Scenario Planning, necessary tools for defining a future proof diigital ambition.
- Working in 3 horizons following a proven path for digital transformation.
- Building future proof digital transformation capabilities from within the organization.
This document discusses esports and networking technology from Extreme Networks' perspective. It begins with an introduction of Extreme Networks, describing their history, customers, and industry recognition. It then presents a case study of SUNY Canton's esports program, including how their arena was set up and how esports has increased enrollment in related programs. The document concludes by discussing the current state and future predictions of the esports industry, and emphasizes the importance of infrastructure and computing technology to esports.
There is a high demand for IT professionals, with over 300,000 core IT jobs currently open in the US. IT certifications are important for validating skills and making training more effective. Some of the most valuable certifications for getting hired and advancing one's career include the CompTIA A+, Network+, Security+, and various Microsoft and Cisco certifications. Many federal agencies also require or recommend various CompTIA certifications. Certified workers tend to be more productive, solve problems better, and are less likely to change jobs.
This document provides an introduction and overview of dewatering methods used in construction projects. It discusses how the water table and groundwater conditions can impact foundations and excavations. Several key dewatering methods are described, including sumps, wells, well points, drainage galleries, and exclusion methods like ground freezing. Sumps involve pumping from perforated drums in a gravel-filled excavation and work best in fine-grained soils. Wells use large-diameter casings and pumps to dewater large areas to depth in permeable soils. Well points are smaller and more shallow but can effectively dewater coarse-grained soils through a vacuum system. Selection of the appropriate dewatering method depends on factors like soil type, excav
A Proven Marketing Strategy and Plan for Financial AdvisorsDavid Finley
This document outlines a five step marketing strategy and plan framework for financial advisors. The framework guides advisors through planning and organization, developing a competitive strategy by defining their niche and value proposition, establishing their brand identity, creating content for their marketing hub, and implementing a referral networking platform. The goal is to leverage both referral networking and content marketing tactics to build the advisor's authority and generate new business through word-of-mouth recommendations.
Si bien la Transformación Digital trae consigo nuevos riesgos, implica además la posibilidad de aplicar nuevos modelos de trabajo, apoyados en la tecnología.
La tecnología ofrece la capacidad tanto de mejorar la calidad de la auditoría como de agregarle valor: la auditoría pasa de ser un ejercicio reactivo y retrospectivo a uno proactivo, predictivo y prospectivo, que funciona en tiempo real. Como tal, brinda más oportunidades para ayudar a las empresas a través de información oportuna.
El análisis de datos parece ser el más maduro de los avances tecnológicos
BA and Beyond 20 - Marijke Verhavert and Hans Ponnet - Future-Proof Digital T...BA and Beyond
Sport Flanders and Tomorrowlab have been working together for several years now to explore the future of Sport and to build the business strategy from there. Insights in trends and future customer behavior and a solid understanding of the disruptive technologies that lie ahead is crucial to stay on the map tomorrow.
Since last year, they have strengthened their cooperation with a new pillar: the digital transformation as a crucial next step.
In this talk:
- Future Foresight and Scenario Planning, necessary tools for defining a future proof diigital ambition.
- Working in 3 horizons following a proven path for digital transformation.
- Building future proof digital transformation capabilities from within the organization.
This document discusses esports and networking technology from Extreme Networks' perspective. It begins with an introduction of Extreme Networks, describing their history, customers, and industry recognition. It then presents a case study of SUNY Canton's esports program, including how their arena was set up and how esports has increased enrollment in related programs. The document concludes by discussing the current state and future predictions of the esports industry, and emphasizes the importance of infrastructure and computing technology to esports.
There is a high demand for IT professionals, with over 300,000 core IT jobs currently open in the US. IT certifications are important for validating skills and making training more effective. Some of the most valuable certifications for getting hired and advancing one's career include the CompTIA A+, Network+, Security+, and various Microsoft and Cisco certifications. Many federal agencies also require or recommend various CompTIA certifications. Certified workers tend to be more productive, solve problems better, and are less likely to change jobs.
This document provides an introduction and overview of dewatering methods used in construction projects. It discusses how the water table and groundwater conditions can impact foundations and excavations. Several key dewatering methods are described, including sumps, wells, well points, drainage galleries, and exclusion methods like ground freezing. Sumps involve pumping from perforated drums in a gravel-filled excavation and work best in fine-grained soils. Wells use large-diameter casings and pumps to dewater large areas to depth in permeable soils. Well points are smaller and more shallow but can effectively dewater coarse-grained soils through a vacuum system. Selection of the appropriate dewatering method depends on factors like soil type, excav
A Proven Marketing Strategy and Plan for Financial AdvisorsDavid Finley
This document outlines a five step marketing strategy and plan framework for financial advisors. The framework guides advisors through planning and organization, developing a competitive strategy by defining their niche and value proposition, establishing their brand identity, creating content for their marketing hub, and implementing a referral networking platform. The goal is to leverage both referral networking and content marketing tactics to build the advisor's authority and generate new business through word-of-mouth recommendations.
The document provides an overview of the full structure of Walton, a Bangladeshi conglomerate. It describes the various departments within the organization, including finance, credit, marketing, audit, production, logistics, service, and human resources. It outlines the roles and responsibilities of each department as well as details about Walton's products, vision, history, and competitive strategies.
This document provides information about the 12th edition of the World Bank Group's flagship report "Doing Business 2015: Going Beyond Efficiency". It compares business regulations for domestic firms in 189 economies. Some key points:
- Doing Business measures regulations affecting 11 areas of the life of a business, including starting a business, dealing with construction permits, getting electricity, registering property, getting credit, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
- It collects data on de jure laws and regulations and uses standardized case scenarios to make comparisons across economies. However, this approach has limitations as regulations may impact economies differently.
- The overall ease of doing business ranking equally weights 10 indicator areas,
This document is the introduction to the 12th edition of the World Bank Group's annual Doing Business report. It provides an overview of the report, which measures regulations affecting 11 areas of business across 189 economies. Specifically, it measures regulations on starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. The introduction emphasizes that while fiscal and monetary policy receive more attention, the business regulatory environment is equally or more important for economic success. It positions the Doing Business report as an important resource for understanding the business regulations that underlie economic development.
This document is the introduction to the 12th edition of the World Bank Group's annual Doing Business report. It provides an overview of the report, which measures regulations affecting 11 areas of business across 189 economies. Specifically, it measures regulations on starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. The introduction emphasizes that while fiscal and monetary policy receive more attention, the business regulatory environment is equally or more important for economic success. It positions the Doing Business report as an important resource for understanding the business regulations that underlie economic development.
Doing Business 2015: Going Beyond Efficiency, a World Bank Group flagship publication, is the 12th in a series of annual reports measuring the regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies—from Afghanistan to Zimbabwe—and over time.
Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking.
Data in Doing Business 2015 are current as of June 1, 2014. The indicators are used to analyze economic outcomes and identify what reforms of business regulation have worked, where and why. This year’s report introduces a notable expansion of several indicator sets and a change in the calculation of rankings.
More >> http://goo.gl/6KiQ70
Doing Business 2015: au-delà de l’efficience est une publication phare du Groupe de la Banque Mondiale et est le 12ème d'une série de rapports annuels mesurant les réglementations favorables et défavorables de l'activité commerciale. Doing Business présente des indicateurs quantitatifs sur la réglementation des affaires et la protection des droits de propriété de 189 pays - de l'Afghanistan au Zimbabwe - au fil du temps.
Doing Business mesure les réglementations affectant 11 domaines de la vie d'une entreprise. Dix de ces domaines sont inclus dans le classement de cette année sur la facilité de faire des affaires: création d'entreprise, octroi de permis de construire, raccordement à l'électricité, transfert de propriété, obtention de prêts, protection des investisseurs minoritaires, paiement des impôts, commerce transfrontalier, exécution des contrats et règlement de l’insolvabilité. Doing Business mesure également la régulation du marché du travail, ce qui n'est pas inclus dans le classement de cette année.
Les données de Doing Business 2015 sont mises à jour en date du 1er Juin 2014. Les indicateurs sont utilisés pour analyser les résultats économiques et identifier les meilleures réformes de la réglementation des affaires, dépendant de l’endroit et de l’objectif. Le rapport de cette année présente une expansion notable de plusieurs ensembles d'indicateurs et un changement dans le calcul du classement.
Brazil Digital Report: a first-edition dossier on the Brazilian digital economy. A comprehensive report on trends and facts for investors, public and private institutions, entrepreneurs, executives, students, and for digital savvy people who are curious about Brazil.
https://www.brazilatsiliconvalley.com/
Brazil Digital Report - 1st Edition By McKinsey & Company and Brazil at Silic...Ana Lucia Amaral
This report provides an overview of Brazil's economy, innovation landscape, and opportunities for growth. While Brazil's GDP is growing again after a slowdown, productivity has increased little. The economy relies heavily on private consumption and the services sector. Macroeconomic indicators like inflation, interest rates, and Brazil's risk rating have improved in recent years. However, Brazil needs to address low productivity, lack of innovation, and the absence of large technology companies in order to transition to sustainable long-term growth as workforce growth declines.
The document summarizes mergers and acquisitions as well as new contracts in the global business process outsourcing industry in November and December 2012. Some of the key deals included iQor acquiring CCT Group to expand its customer care capabilities, Bain Capital acquiring Atento to support its further growth, and Sutherland Global Services acquiring Apollo Health Street to strengthen its healthcare services. New contracts were signed between outsourcing providers such as Accenture, Capgemini, and Genpact and clients such as Unilever and Centrica. Market research also showed a decline in the number and value of new BPO contracts in the third quarter of 2012.
Presentation from Amy Browne, Stewardship Lead, CCLA Investment Management, during the OECD WISE Centre & Persol Holdings Workshop on Advancing Employee Well-being in Business and Finance, 22 November 2023
Business Ethics and Corporate Governance - White PaperDavid Mallard
Ethics and Culture in organisations: 53% of C-suite executives think their boards are out of touch in understanding the ethical issues facing their business. Its reasonable to suggest that companies aim to develop an organisational culture that is self-policing and that positively encourages concerns about ethical behaviour to be raised at all levels and in all locations.A White paper written by colleague Dr Attracta Lagan for the ICAA.
The Way We Work Has Changed - Now Looking Toward 2030Manage Damage
Jillian Hamilton presents on February 25th & 26th 2020 as an Expert to the IEC MSB White Paper on the Future of Safety in Geneva, Switzerland.
Millions of devices that contain electronics, and use or produce electricity, rely on IEC International Standards and Conformity Assessment Systems to perform, fit and work safely together.
Founded in 1906, the IEC (International Electrotechnical Commission) is the world’s leading organization for the preparation and publication of International Standards for all electrical, electronic and related technologies. These are known collectively as “electrotechnology”.
IEC provides a platform to companies, industries and governments for meeting, discussing and developing the International Standards they require.
All IEC International Standards are fully consensus-based and represent the needs of key stakeholders of every nation participating in IEC work. Every member country, no matter how large or small, has one vote and a say in what goes into an IEC International Standard.
The International Electrotechnical Commission (IEC) is the world’s leading organization that prepares and publishes International Standards for all electrical, electronic and related technologies.
Close to 20 000 experts from industry, commerce, government, test and research labs, academia and consumer groups participate in IEC Standardization work.
The IEC is one of three global sister organizations (IEC, ISO, ITU) that develop International Standards for the world.
When appropriate, IEC cooperates with ISO (International Organization for Standardization) or ITU (International Telecommunication Union) to ensure that International Standards fit together seamlessly and complement each other. Joint committees ensure that International Standards combine all relevant knowledge of experts working in related areas.
Discover our 2019 Integrated Annual Report which endorses our commitment to delivering value to society.
Measuring financial and non-financial performance throughout the year, the 2019 integrated report shows what sustainability looks like in practice by showcasing the people, expertise, investment, finance and skills that underpin the business, and their impact on people and the environment.
This document is the annual report of the Immigration Consultants of Canada Regulatory Council (ICCRC) for the 2014-2015 fiscal year. It provides information on ICCRC's governance structure, strategic goals, committee outcomes, management activities, and audited financial statements. The Chair of the ICCRC Board of Directors discusses key accomplishments over the year including finalizing a three-year strategic plan and being designated as the regulator of citizenship consultants. Challenges around outdated software systems are also noted, along with a vision for the future potential of the immigration consulting profession.
Mauritius ranks 32nd overall in the ease of doing business, with a distance to frontier score of 75.05. While Mauritius has made improvements in some areas like starting a business, its rankings and scores have remained largely stable. Mauritius still lags in areas like dealing with construction permits and trading across borders, indicating remaining bottlenecks for local entrepreneurs. Continued regulatory reform could help Mauritius further improve its business environment and economic outcomes.
Technology and business both have the golden touch; they just don’t change into gold whatever they touch but something more valuable than gold. They are revolutionizing each and every element of our lives. The latest technological and business achievements have triggered unexpected trends with broader impact on very human aspect. And in 2019, we expect drastic exponential changes in every possible direction. Advanced tech like AI will transform the entire industries, making way for infinite business opportunities.
In this latest edition, we will focus on such future thinking companies and their revolutionizing services that are changing the face of business sector.
The Silicon Review “Super 30 Companies of the Year 2019.” These companies are not only distinctly ahead among the peers, but are helping other companies to gain momentum along with them. The companies that are enlisted provide most innovative solutions to solve IT industry’s toughest challenges and distinguish themselves by their ability to forecast future business and technology trends. In simple words, these companies are helping the people better understand the world.
This document provides an overview and summary of the 2015 Information Security Breaches Survey conducted by PwC in association with Infosecurity Europe.
Some key findings from the survey include:
- The number and costs of data breaches have risen compared to previous years, with reputational damage and disruption to business operations identified as major consequences.
- Mobile devices are seen as a significant security risk, but policy and controls to manage them are still developing at many organizations.
- While cybersecurity spending is increasing, the top drivers are now regulatory compliance and protecting brand/reputation rather than technical issues.
- Most organizations rely on external providers for cybersecurity advice and services, but understanding of cyber insurance remains limited
1. A Special Report Ireland A Highly Attractive Location for Hosting Digital Assets
2. About 451 Research A division of The 451 Group, 451 Research is a leading global analyst and data company. Commissioned and Supported by
3. About this Report Over the past decade, Ireland has emerged as the favoured location for hosting digital assets. Exploring attributes such as connectivity to Europe and America, renewable energy, tax benefits and a talented workforce, the report explains why this tiny island is a powerhouse in the global hosting industry. Download the full report HERE, or read on to find out more
4. 451 analyzed and scored Ireland on factors that influence a company’s decision when choosing a European location for their digital assets. Economy Financial Benefits Green Energy Law Connectivity Hosting & The Cloud Workforce Government Support Success Stories
Rocket Internet provides a standardized process and shared infrastructure for identifying, building, and scaling online companies globally. It has regional teams launching ventures across 100+ countries, with a focus on five key regions. Rocket's platform includes over 15,000 employees worldwide providing expertise across functions like technology, marketing, operations and more. The process involves quickly proving business models, then transferring and growing them internationally in underserved markets to become market leaders.
Quintiles analyst day presentation 2014Quintiles2014
The document discusses Quintiles' product development services and clinical trials business. It highlights Quintiles' continued revenue and earnings growth in this business area. The document also outlines Quintiles' understanding of market drivers in product development and its ability to offer solutions that meet evolving customer needs, from traditional clinical trial services to more integrated partnerships.
This document provides an introductory guide for directors on climate risk governance. It begins with an overview of key climate change concepts, including the physical and economic risks posed by climate change and how it impacts most industries. It then discusses how directors can start their board's climate change journey by understanding their duties, assessing risks and opportunities, and examining governance structures and stakeholder expectations. The guide provides questions for boards to consider around climate governance, strategy, and risk oversight. It also reviews litigation risks and regulatory expectations for companies to address climate change.
Australian Bushfire
and Climate Plan
Final report of the National Bushfire and Climate Summit 2020
The severity and scale of Australian bushfires
is escalating
Australia’s Black Summer fires over 2019 and 2020
were unprecedented in scale and levels of destruction.
Fuelled by climate change, the hottest and driest year
ever recorded resulted in fires that burned through land
two-and-a-half times the size of Tasmania (more than 17
million hectares), killed more than a billion animals, and
affected nearly 80 percent of Australians. This included
the tragic loss of over 450 lives from the fires and
smoke, more than 3,000 homes were destroyed, and
thousands of other buildings.
While unprecedented, this tragedy was not
unforeseen, nor unexpected. For decades climate
scientists have warned of an increase in climaterelated disasters, including longer and more
dangerous bushfire seasons, which have become
directly observable over the last 20 years. Extremely
hot, dry conditions, underpinned by years of reduced
rainfall and a severe drought, set the scene for the
Black Summer crisis.
Recommendations - The 3 Rs - Response,
Readiness and Recovery
There is no doubt that bushfires in Australia have
become more frequent, ferocious and unpredictable
with major losses in 2001/02 in NSW, 2003 in the
ACT, 2013 in Tasmania and NSW, 2018 in Queensland,
2009 Black Saturday Fires in Victoria and 2019/20 in
Queensland, NSW, Victoria and South Australia. We are
now in a new era of supercharged bushfire risk, forcing
a fundamental rethink of how we prevent, prepare for,
respond to, and recover from bushfires.
This Australian Bushfire and Climate Plan report
provides a broad plan and practical ideas for
governments, fire and land management agencies
and communities to help us mitigate and adapt to
worsening fire conditions. The 165 recommendations
include many measures that can be implemented right
now, to ensure communities are better protected.
The document provides an overview of the full structure of Walton, a Bangladeshi conglomerate. It describes the various departments within the organization, including finance, credit, marketing, audit, production, logistics, service, and human resources. It outlines the roles and responsibilities of each department as well as details about Walton's products, vision, history, and competitive strategies.
This document provides information about the 12th edition of the World Bank Group's flagship report "Doing Business 2015: Going Beyond Efficiency". It compares business regulations for domestic firms in 189 economies. Some key points:
- Doing Business measures regulations affecting 11 areas of the life of a business, including starting a business, dealing with construction permits, getting electricity, registering property, getting credit, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
- It collects data on de jure laws and regulations and uses standardized case scenarios to make comparisons across economies. However, this approach has limitations as regulations may impact economies differently.
- The overall ease of doing business ranking equally weights 10 indicator areas,
This document is the introduction to the 12th edition of the World Bank Group's annual Doing Business report. It provides an overview of the report, which measures regulations affecting 11 areas of business across 189 economies. Specifically, it measures regulations on starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. The introduction emphasizes that while fiscal and monetary policy receive more attention, the business regulatory environment is equally or more important for economic success. It positions the Doing Business report as an important resource for understanding the business regulations that underlie economic development.
This document is the introduction to the 12th edition of the World Bank Group's annual Doing Business report. It provides an overview of the report, which measures regulations affecting 11 areas of business across 189 economies. Specifically, it measures regulations on starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. The introduction emphasizes that while fiscal and monetary policy receive more attention, the business regulatory environment is equally or more important for economic success. It positions the Doing Business report as an important resource for understanding the business regulations that underlie economic development.
Doing Business 2015: Going Beyond Efficiency, a World Bank Group flagship publication, is the 12th in a series of annual reports measuring the regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies—from Afghanistan to Zimbabwe—and over time.
Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking.
Data in Doing Business 2015 are current as of June 1, 2014. The indicators are used to analyze economic outcomes and identify what reforms of business regulation have worked, where and why. This year’s report introduces a notable expansion of several indicator sets and a change in the calculation of rankings.
More >> http://goo.gl/6KiQ70
Doing Business 2015: au-delà de l’efficience est une publication phare du Groupe de la Banque Mondiale et est le 12ème d'une série de rapports annuels mesurant les réglementations favorables et défavorables de l'activité commerciale. Doing Business présente des indicateurs quantitatifs sur la réglementation des affaires et la protection des droits de propriété de 189 pays - de l'Afghanistan au Zimbabwe - au fil du temps.
Doing Business mesure les réglementations affectant 11 domaines de la vie d'une entreprise. Dix de ces domaines sont inclus dans le classement de cette année sur la facilité de faire des affaires: création d'entreprise, octroi de permis de construire, raccordement à l'électricité, transfert de propriété, obtention de prêts, protection des investisseurs minoritaires, paiement des impôts, commerce transfrontalier, exécution des contrats et règlement de l’insolvabilité. Doing Business mesure également la régulation du marché du travail, ce qui n'est pas inclus dans le classement de cette année.
Les données de Doing Business 2015 sont mises à jour en date du 1er Juin 2014. Les indicateurs sont utilisés pour analyser les résultats économiques et identifier les meilleures réformes de la réglementation des affaires, dépendant de l’endroit et de l’objectif. Le rapport de cette année présente une expansion notable de plusieurs ensembles d'indicateurs et un changement dans le calcul du classement.
Brazil Digital Report: a first-edition dossier on the Brazilian digital economy. A comprehensive report on trends and facts for investors, public and private institutions, entrepreneurs, executives, students, and for digital savvy people who are curious about Brazil.
https://www.brazilatsiliconvalley.com/
Brazil Digital Report - 1st Edition By McKinsey & Company and Brazil at Silic...Ana Lucia Amaral
This report provides an overview of Brazil's economy, innovation landscape, and opportunities for growth. While Brazil's GDP is growing again after a slowdown, productivity has increased little. The economy relies heavily on private consumption and the services sector. Macroeconomic indicators like inflation, interest rates, and Brazil's risk rating have improved in recent years. However, Brazil needs to address low productivity, lack of innovation, and the absence of large technology companies in order to transition to sustainable long-term growth as workforce growth declines.
The document summarizes mergers and acquisitions as well as new contracts in the global business process outsourcing industry in November and December 2012. Some of the key deals included iQor acquiring CCT Group to expand its customer care capabilities, Bain Capital acquiring Atento to support its further growth, and Sutherland Global Services acquiring Apollo Health Street to strengthen its healthcare services. New contracts were signed between outsourcing providers such as Accenture, Capgemini, and Genpact and clients such as Unilever and Centrica. Market research also showed a decline in the number and value of new BPO contracts in the third quarter of 2012.
Presentation from Amy Browne, Stewardship Lead, CCLA Investment Management, during the OECD WISE Centre & Persol Holdings Workshop on Advancing Employee Well-being in Business and Finance, 22 November 2023
Business Ethics and Corporate Governance - White PaperDavid Mallard
Ethics and Culture in organisations: 53% of C-suite executives think their boards are out of touch in understanding the ethical issues facing their business. Its reasonable to suggest that companies aim to develop an organisational culture that is self-policing and that positively encourages concerns about ethical behaviour to be raised at all levels and in all locations.A White paper written by colleague Dr Attracta Lagan for the ICAA.
The Way We Work Has Changed - Now Looking Toward 2030Manage Damage
Jillian Hamilton presents on February 25th & 26th 2020 as an Expert to the IEC MSB White Paper on the Future of Safety in Geneva, Switzerland.
Millions of devices that contain electronics, and use or produce electricity, rely on IEC International Standards and Conformity Assessment Systems to perform, fit and work safely together.
Founded in 1906, the IEC (International Electrotechnical Commission) is the world’s leading organization for the preparation and publication of International Standards for all electrical, electronic and related technologies. These are known collectively as “electrotechnology”.
IEC provides a platform to companies, industries and governments for meeting, discussing and developing the International Standards they require.
All IEC International Standards are fully consensus-based and represent the needs of key stakeholders of every nation participating in IEC work. Every member country, no matter how large or small, has one vote and a say in what goes into an IEC International Standard.
The International Electrotechnical Commission (IEC) is the world’s leading organization that prepares and publishes International Standards for all electrical, electronic and related technologies.
Close to 20 000 experts from industry, commerce, government, test and research labs, academia and consumer groups participate in IEC Standardization work.
The IEC is one of three global sister organizations (IEC, ISO, ITU) that develop International Standards for the world.
When appropriate, IEC cooperates with ISO (International Organization for Standardization) or ITU (International Telecommunication Union) to ensure that International Standards fit together seamlessly and complement each other. Joint committees ensure that International Standards combine all relevant knowledge of experts working in related areas.
Discover our 2019 Integrated Annual Report which endorses our commitment to delivering value to society.
Measuring financial and non-financial performance throughout the year, the 2019 integrated report shows what sustainability looks like in practice by showcasing the people, expertise, investment, finance and skills that underpin the business, and their impact on people and the environment.
This document is the annual report of the Immigration Consultants of Canada Regulatory Council (ICCRC) for the 2014-2015 fiscal year. It provides information on ICCRC's governance structure, strategic goals, committee outcomes, management activities, and audited financial statements. The Chair of the ICCRC Board of Directors discusses key accomplishments over the year including finalizing a three-year strategic plan and being designated as the regulator of citizenship consultants. Challenges around outdated software systems are also noted, along with a vision for the future potential of the immigration consulting profession.
Mauritius ranks 32nd overall in the ease of doing business, with a distance to frontier score of 75.05. While Mauritius has made improvements in some areas like starting a business, its rankings and scores have remained largely stable. Mauritius still lags in areas like dealing with construction permits and trading across borders, indicating remaining bottlenecks for local entrepreneurs. Continued regulatory reform could help Mauritius further improve its business environment and economic outcomes.
Technology and business both have the golden touch; they just don’t change into gold whatever they touch but something more valuable than gold. They are revolutionizing each and every element of our lives. The latest technological and business achievements have triggered unexpected trends with broader impact on very human aspect. And in 2019, we expect drastic exponential changes in every possible direction. Advanced tech like AI will transform the entire industries, making way for infinite business opportunities.
In this latest edition, we will focus on such future thinking companies and their revolutionizing services that are changing the face of business sector.
The Silicon Review “Super 30 Companies of the Year 2019.” These companies are not only distinctly ahead among the peers, but are helping other companies to gain momentum along with them. The companies that are enlisted provide most innovative solutions to solve IT industry’s toughest challenges and distinguish themselves by their ability to forecast future business and technology trends. In simple words, these companies are helping the people better understand the world.
This document provides an overview and summary of the 2015 Information Security Breaches Survey conducted by PwC in association with Infosecurity Europe.
Some key findings from the survey include:
- The number and costs of data breaches have risen compared to previous years, with reputational damage and disruption to business operations identified as major consequences.
- Mobile devices are seen as a significant security risk, but policy and controls to manage them are still developing at many organizations.
- While cybersecurity spending is increasing, the top drivers are now regulatory compliance and protecting brand/reputation rather than technical issues.
- Most organizations rely on external providers for cybersecurity advice and services, but understanding of cyber insurance remains limited
1. A Special Report Ireland A Highly Attractive Location for Hosting Digital Assets
2. About 451 Research A division of The 451 Group, 451 Research is a leading global analyst and data company. Commissioned and Supported by
3. About this Report Over the past decade, Ireland has emerged as the favoured location for hosting digital assets. Exploring attributes such as connectivity to Europe and America, renewable energy, tax benefits and a talented workforce, the report explains why this tiny island is a powerhouse in the global hosting industry. Download the full report HERE, or read on to find out more
4. 451 analyzed and scored Ireland on factors that influence a company’s decision when choosing a European location for their digital assets. Economy Financial Benefits Green Energy Law Connectivity Hosting & The Cloud Workforce Government Support Success Stories
Rocket Internet provides a standardized process and shared infrastructure for identifying, building, and scaling online companies globally. It has regional teams launching ventures across 100+ countries, with a focus on five key regions. Rocket's platform includes over 15,000 employees worldwide providing expertise across functions like technology, marketing, operations and more. The process involves quickly proving business models, then transferring and growing them internationally in underserved markets to become market leaders.
Quintiles analyst day presentation 2014Quintiles2014
The document discusses Quintiles' product development services and clinical trials business. It highlights Quintiles' continued revenue and earnings growth in this business area. The document also outlines Quintiles' understanding of market drivers in product development and its ability to offer solutions that meet evolving customer needs, from traditional clinical trial services to more integrated partnerships.
This document provides an introductory guide for directors on climate risk governance. It begins with an overview of key climate change concepts, including the physical and economic risks posed by climate change and how it impacts most industries. It then discusses how directors can start their board's climate change journey by understanding their duties, assessing risks and opportunities, and examining governance structures and stakeholder expectations. The guide provides questions for boards to consider around climate governance, strategy, and risk oversight. It also reviews litigation risks and regulatory expectations for companies to address climate change.
Australian Bushfire
and Climate Plan
Final report of the National Bushfire and Climate Summit 2020
The severity and scale of Australian bushfires
is escalating
Australia’s Black Summer fires over 2019 and 2020
were unprecedented in scale and levels of destruction.
Fuelled by climate change, the hottest and driest year
ever recorded resulted in fires that burned through land
two-and-a-half times the size of Tasmania (more than 17
million hectares), killed more than a billion animals, and
affected nearly 80 percent of Australians. This included
the tragic loss of over 450 lives from the fires and
smoke, more than 3,000 homes were destroyed, and
thousands of other buildings.
While unprecedented, this tragedy was not
unforeseen, nor unexpected. For decades climate
scientists have warned of an increase in climaterelated disasters, including longer and more
dangerous bushfire seasons, which have become
directly observable over the last 20 years. Extremely
hot, dry conditions, underpinned by years of reduced
rainfall and a severe drought, set the scene for the
Black Summer crisis.
Recommendations - The 3 Rs - Response,
Readiness and Recovery
There is no doubt that bushfires in Australia have
become more frequent, ferocious and unpredictable
with major losses in 2001/02 in NSW, 2003 in the
ACT, 2013 in Tasmania and NSW, 2018 in Queensland,
2009 Black Saturday Fires in Victoria and 2019/20 in
Queensland, NSW, Victoria and South Australia. We are
now in a new era of supercharged bushfire risk, forcing
a fundamental rethink of how we prevent, prepare for,
respond to, and recover from bushfires.
This Australian Bushfire and Climate Plan report
provides a broad plan and practical ideas for
governments, fire and land management agencies
and communities to help us mitigate and adapt to
worsening fire conditions. The 165 recommendations
include many measures that can be implemented right
now, to ensure communities are better protected.
How to work with petroleum hydrocarbon suppliers to reduce and eliminate cont...Turlough Guerin GAICD FGIA
Petroleum hydrocarbon suppliers affect a mine's goals for environmental performance because of the extensive reach of petroleum hydrocarbon products into the mining and minerals product life cycle, their impact on operational efficiencies, cost, and mine viability, and their potential for leaving negative environmental as well as safety legacies. The supplied petroleum hydrocarbon life cycle is a framework that enables structured engagement between supplier and customer on a range of environmental performance issues because it is an example of input into the mining industry that affects the entire mining and minerals processing an value chain. Engagement with suppliers in a proactive manner can be a risk management strategy. Questions for businesses to ask in relation to suppliers and their role in minimizing business risks and creating new value are offered (https://onlinelibrary.wiley.com/doi/full/10.1002/rem.21669).
This document provides information about an online course offered in October 2020 led by Karim Lakhani and Vish Krishnan. The course was offered on edX under the course code HarvardX+LBTechX1+1T2020 and provided a reference link for more details.
Governments would get bigger bang for taxpayer
buck by instead spending more on upgrading existing infrastructure,
and on social infrastructure such as aged care and mental health care.
The document discusses how telecommunications can reduce organizations' carbon footprints. It notes that while the ICT sector contributes 2-3% of global emissions, telecommunications offers significant potential to reduce emissions across the economy through enabling virtual alternatives. The author provides three examples of how Telstra's products and services leverage emissions reductions: 1) Trimble GeoManager improves field workforce efficiency by 5.6% in travel and 13.3% in productivity; 2) broadband enables flexible working that can reduce emissions 1.6 tonnes per teleworker; 3) high-definition videoconferencing replaces business air travel. Overall, telecommunications is presented as a key enabler of a low-carbon future through smart applications on broadband networks
Choosing net zero is
an economic necessity
Australia pays a high price of a global failure
to deliver new growth in recovery. Compared
to this dismal future, Deloitte Access Economics
estimates a new growth recovery could
grow Australia’s economy by $680 billion
(present value terms) and increase GDP
by 2.6% in 2070 – adding over 250,000 jobs
to the Australian economy by 2070.
This document outlines a roadmap for reducing Australia's food waste by half by 2030. It proposes establishing a governance entity to lead ongoing delivery of the national food waste strategy and sector action plans. Key initial actions include conducting a feasibility study to fill data gaps and understand delivery trajectories, and developing an investment strategy to ensure long-term funding. A voluntary commitment program is proposed as a vehicle for industries to set waste reduction targets, take actions, and report progress. The roadmap sets out a timeline of activities from 2019-2030, with interim targets and reviews to assess progress toward the overall goal.
The world of venture capital has seen huge changes over the past decade. Ten years ago there were fewer than
20 known unicorns in the US5
; there are now over 2006
. Annual investment of global venture capital has increased
more than fivefold over the same period, rising to $264 billion by 2019. This investment has been dominated by the
tech sector harnessing digital frontiers to disrupt traditional industries – including cloud computing, mobile apps,
marketplaces, data platforms, machine learning and deep tech.7
It is an ecosystem that acts as the birthplace for
innovation and brands that can shape the future of consumerism, sectors and markets.
As COVID-19 has taken hold of the
world, the question of whether venture
capital, and early stage investing more
broadly, is backing and scaling the
innovations our world really needs has
never been more pertinent. Life science
and biotech investing is an asset class
perhaps most resilient and relevant to
the short-term impact of COVID-19,
but there is another impact-critical
investment area that is emerging as
an increasingly important investment
frontier: climate tech.
This research represents a first-ofits-kind analysis of the state of global
climate tech investing. We define what
it is and show how this new frontier
of venture investing is becoming a
standout investing opportunity for the
2020s. Representing 6% of global
annual venture capital funding in 2019,
our analysis finds this segment has
grown over 3750% in absolute terms
since 2013. This is on the order of 3
times the growth rate of VC investment
into AI, during a time period renowned
for its uptick in AI investment.8
Looking forward can climate tech in the
2020s follow a similar journey to the
artificial intelligence (AI) investing boom
in the 2010s? The substantial rates of
growth seen in climate tech in the late
2010s, and the overarching need for
new transformational solutions across
multiple sectors of the economy,
suggests yes. The stage appears set
for an explosion of climate tech into the
mainstream investment and corporate
landscape in the decade ahead.
The document outlines Australia's Technology Investment Roadmap which aims to make Australia a global leader in low emissions technologies. It identifies big technology challenges around clean energy, carbon capture and storage, low carbon materials, and soil carbon measurement. The Roadmap's goals are to accelerate development of new technologies, support jobs and exports, and lower emissions. It proposes priority technologies like clean hydrogen under $2/kg and energy storage under $100/MWh. The Roadmap establishes a framework for government and private investment of over $18 billion and $50-100 billion respectively to develop priority technologies and support over 130,000 jobs by 2030.
Nine shifts will radically change the way construction projects are delivered—and similar
industries have already undergone many of the shifts. A combination of sustainability
requirements, cost pressure, skills scarcity, new materials, industrial approaches, digitalization,
and a new breed of player looks set to transform the value chain. The shifts ahead include
productization and specialization, increased value-chain control, and greater customercentricity
and branding. Consolidation and internationalization will create the scale needed to
allow higher levels of investment in digitalization, R&D and equipment, and sustainability as well
as human capital.
The document outlines UDIA National's plan to help the Australian housing and construction industry bounce back from COVID-19 through targeted policy initiatives. It discusses how the industry has been impacted by COVID-19, with inquiries, sales, and construction falling significantly. It argues that without intervention, further job losses are likely as the industry employs over 750,000 people directly and indirectly. The plan calls for immediate federal stimulus to kickstart the housing market and flow through to economic recovery. It acknowledges actions already taken but argues more is needed to move from economic stabilization to recovery.
Sustainable Finance Industry Guide
This industry guide provides information about sustainable finance in the built environment in Australia. It is designed to support investor understanding of Australia’s world-class rating tools and standards, and how these can be applied to direct more capital towards sustainable finance for our built environment. Included are insights that reflect lessons learnt when using a rating scheme to establish an investment framework, conduct
due diligence or report on an issuance.
Precincts to Support the Delivery of Zero Energy
This report frames the physical and organisational context for precinct action and identifies potential programs and government solutions that may be applied to better streamline the realisation of precinct-scale action to progress towards zero energy (and carbon) ready residential buildings within both new and existing precincts.
The report was developed based on a literature review and engagement with more than 80 stakeholders from industry, academia and government with the aim of identifying appropriate government action in the form of proposed solutions that may be applicable across Commonwealth, state and territory and/ or local governments.
The report has given focus to opportunities for precincts that are not already considered in the Trajectory to ensure that a wider system response is taken to considering the zero energy (and carbon) ready outcomes being sought.
When seeking funding, environmental and sustainability professionals must clarify how their role and the proposed project fit within the business' strategy.
This article provides a checklist for those seeking funding for sustainability and environmental projects.
The suggested questions will assist non-executive directors in evaluating sustainability-focused proposals.
Turlough F Guerin received a certificate of achievement from HarvardX for successfully completing the course "LBTechX1: Technology Entrepreneurship: Lab to Market". The certificate was issued on July 19, 2020 and verifies that Turlough F Guerin demonstrated a passing understanding of the material presented in the online course offered through an initiative between Harvard University and edX.
This document provides an overview of the key findings from a report developed by the Science Based Targets initiative (SBTi) regarding the conceptual foundations for setting science-based net-zero targets in the corporate sector. Some of the main points discussed include:
- Net-zero emissions must be achieved by 2050 to limit global warming to 1.5°C according to the IPCC. Corporate net-zero targets vary in their approaches and definitions.
- Science-based net-zero targets for companies require deep reductions in value chain emissions consistent with 1.5°C pathways, as well as offsetting any remaining emissions through carbon removal by 2050.
- Compensation and carbon removal can play a
Cleades Robinson, a respected leader in Philadelphia's police force, is known for his diplomatic and tactful approach, fostering a strong community rapport.
Methanex is the world's largest producer and supplier of methanol. We create value through our leadership in the global production, marketing and delivery of methanol to customers. View our latest Investor Presentation for more details.
UnityNet World Environment Day Abraham Project 2024 Press ReleaseLHelferty
June 12, 2024 UnityNet International (#UNI) World Environment Day Abraham Project 2024 Press Release from Markham / Mississauga, Ontario in the, Greater Tkaronto Bioregion, Canada in the North American Great Lakes Watersheds of North America (Turtle Island).
ZKsync airdrop of 3.6 billion ZK tokens is scheduled by ZKsync for next week.pdfSOFTTECHHUB
The world of blockchain and decentralized technologies is about to witness a groundbreaking event. ZKsync, the pioneering Ethereum Layer 2 network, has announced the highly anticipated airdrop of its native token, ZK. This move marks a significant milestone in the protocol's journey, empowering the community to take the reins and shape the future of this revolutionary ecosystem.
3. companydirectors.com.au
3ESSENTIAL DIRECTOR UPDATE:16
The Essential Director Update is one of the Australian Institute of Company Directors’ (AICD) most valued
member services. Attended by more than 5,000 members across Australia each year, it is our largest
event series, designed to provide our members with the latest updates in the Australian and international
governance environment. The events are delivered in capital cities and regional centres around the country.
2016 marks our 10th year holding this event. To mark this milestone, we are delighted that the keynote address will
be delivered by leading director Graham Bradley AM FAICD. If you are attending the Essential Director Update for the
first time, you will discover a session that provides valuable insight into recent legal and regulatory developments, as
well as other contemporary practice issues across the director and governance landscape.
The Essential Director Update Handbook builds on the topics covered in the live events and webinar. This year the
document has a specialist approach, drawing on your peers to contribute individual articles from their areas of expertise.
I hope you enjoy the 2016 Essential Director Update and take away insights that can be practically applied to your
role and governance practices.
John Brogden AM faicd
Managing Director & Chief Executive Officer
Australian Institute of Company Directors
Welcome message from
John Brogden AM FAICD
4.
5. companydirectors.com.au
5ESSENTIAL DIRECTOR UPDATE:16
1.0 THE BUSINESS ENVIRONMENT 8
1.1 Technology 8
1.1.1 Embracing exponential technologies 8
1.1.2 Digital disruption and the ‘fourth industrial revolution’ 9
1.1.3 Virtual reality (VR) technologies 10
1.1.4 Advanced machine learning 11
1.1.5 Industrial analytics 12
1.1.6 Blockchain 13
1.2 Government 14
1.2.1 Government response to FSI and Harper reviews 14
1.2.2 Governance of the nation: A blueprint for reform 14
1.2.3 Retention of the Australian Charities and Not-for-profit Commission (ACNC) 15
1.2.4 Changes to the definition of charity 16
1.3 Politics 17
1.3.1 Election update - implications for policy 17
1.3.2 Social impact investing 17
1.4 Tax risk management 18
1.4.1 Voluntary tax transparency code 18
1.4.2 New Australian Tax Office (ATO) guide signals increased scrutiny of tax risk governance 19
1.4.3 Multinational tax avoidance and the role of the director 20
1.5 Asia 21
1.5.1 The rise and change of economies in Asia 21
Contents
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6ESSENTIAL DIRECTOR UPDATE:16ESSENTIAL DIRECTOR UPDATE:16
1.6 Board composition 22
1.6.1 A review of the academic literature examining independent board members and company performance 22
1.6.2 Independence of super fund trustee boards 22
1.7 Strategy 24
1.7.1 The role of boards in strategy 24
2.0 THE GOVERNANCE ENVIRONMENT 25
2.1 Corporate culture 25
2.1.1 Corporate culture 25
2.2 Short-termism 26
2.2.1 Short-termism 26
2.3 Risk 27
2.3.1 Corporate social responsibility (CSR) activism 27
2.4 Diversity 28
2.4.1 Progress towards 30% by 2018 28
2.4.2 Cognitive diversity 28
2.5 Meetings 29
2.5.1 Review of the 2015 annual general meeting (AGM) season 29
2.6 Environmental, social and governance (ESG) reporting 30
2.6.1 ESG reporting 30
2.7 Directors’ liability 31
2.7.1 Insolvent trading reforms 31
2.8 Enhanced auditor reporting 32
2.8.1 Enhanced auditor reporting 32
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7ESSENTIAL DIRECTOR UPDATE:16
3.0 THE REGULATORY ENVIRONMENT 33
3.1 Australian Securities and Investments Commission (ASIC) update 33
3.1.1 ASIC’s Innovation Hub – recent progress 33
3.2 Australian Competition and Consumer Commission (ACCC) update 34
3.2.1 ACCC Update 34
3.3 Australian Prudential Regulation Authority (APRA) update 36
3.3.1 Bank and insurer risk management 36
3.4 Financial reporting update 37
3.4.1 Financial reporting update 37
8. companydirectors.com.au
8ESSENTIAL DIRECTOR UPDATE:16ESSENTIAL DIRECTOR UPDATE:16
1.0 THE BUSINESS ENVIRONMENT
1.1 Technology
1.1.1 Embracing exponential technologies
Technology has become indivisible from how people,
enterprises and governments operate. The accelerating
rate of change – also known as exponential technologies
– has profound implications for every aspect of
governance: products and services, employees and
customers, business models, stakeholders and regulation.
To govern effectively, it is critical for boards to
understand these exponential changes.
Effective boards contribute in an informed way to
discussions on business strategy and performance.
Directors must educate themselves, but not just about
inevitable technology-related discussions. Exponential
changes and the disruption they can cause affect risk
profiles, investment priorities and competitive analysis.
It is not appropriate to rely solely on external expertise
specialists or management, or even a fellow director who
has technology expertise, any more than such reliance
would be for financial matters.
Technology is changing exponentially and in an
interconnected, complex way. It impacts the customer
experience, supply chain, business model and competitive
landscape and so directors need to be across these
interactions that are at the core of any business.
Some of the current technology trends and future business
models that informed boards are discussing include:
• the explosion of sensor technology and the internet of
things: for example, drones, satellites, home objects;
• big data and real-time data with mobile access
quickly out-pacing privacy implications: for example,
wearables1
in health insurance, delivering contextual
information for customers, online advice and rating of
health providers2
;
• platform businesses that bring together producers and
consumers transforming competition and the traditional
legal framework of operation: for example, Uber and Airbnb;
• cognitive computing and artificial intelligence: for
example, IBM Watson;
• automation and robotics: for example, autonomous
cars changing insurance, public health and road
infrastructure;
• cybersecurity and future crimes: for example, the shift
1
Wearables like Fitbit are launching platforms based on the health data that is captured.
2
See www.whitecoat.com.au
“ Effective boards contribute
in an informed way to
discussions on business
strategy and performance. ”
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9ESSENTIAL DIRECTOR UPDATE:16
to adaptation not prevention in cyber risk as hacks
become a daily occurrence for business;
• energy sustainability and the impact on both those who
use power and those involved with traditional power
generation: for example, the Tesla Powerwall battery for
storage and distributed infrastructure for solar energy
production.
Every industry is different and technology will likely
have varying implications. Blockchain³, peer-to-peer
lending and new payment systems⁴ are changing the
banking industry. 3D printing is shifting manufacturing
and health sectors.⁵ Sensors and real time data are
changing insurance.
Ongoing professional development in this arena is
essential to inform strategy development, the assessment
of business performance and the oversight of risk.
Curiosity and an appetite to learn are critical, as are
opportunities to understand the underlying trends,
trajectories and implications of exponential technologies.
Some other practical approaches include:
• looking at other industries, markets and immersion
opportunities: for example, the Australian Israel Chamber
of Commerce trade missions, or the factory and site tours
conducted by Tesla and Google in the US to demonstrate
their use of robots and data;
• following local innovation hubs, accelerators and initiatives;⁶
• accessing technology focused education programs;
• tapping into expertise on cybercrime;⁷
• Australia’s digital and data innovation groups: for
example, CSIRO Data61;
• staying abreast of government sponsored initiatives and
regulatory guidance.⁸
Given the increasingly all pervasive impact of technology,
it is incumbent on all directors to be informed.
Christine McLoughlin FAICD, Non-Executive Director
Suncorp Group Limited, nib holdings limited, Whitehaven
Coal Limited, Spark Infrastructure Limited and ANZ
Stadium.
1.1.2 Digital disruption and the ‘fourth industrial
revolution’
Taking a futurist perspective, today’s rapid convergence
of digital, biological and physical technologies heralds
the beginning of an economic and social revolution,
which will fundamentally alter the way we live, work,
and relate to one another.
This transformation is just starting to emerge, and
there is strong evidence that it will alter the way that
we create, exchange and distribute value on a scale
comparable to the previous three major industrial
revolutions: the first factories, automated machinery,
widespread use of fossil fuels between 1750-1950;
the rise of electrical systems, the telephone, mass
manufacturing, the automobile and much more between
1870-1914; and the advent of digital computing, mobile
digital communications, space-based technologies and so
on since 1960.
The emerging transformation is labelled the fourth
industrial revolution, and it is being driven by
technologies which treat digital connectivity and
processing capabilities as an essential infrastructure,
in the same way that the digital revolution relies
on pre-existing electricity and telecommunication
systems. Examples include neuro-technologies, additive
manufacturing, artificial intelligence, cryptography,
advanced materials, and biotechnologies.
3
The Australian Digital Currency and Commerce Association runs blockchain bootcamps.
4
See www.australianpaymentscouncil.com.au
5
See enablingthefuture.org
6
See stoneandchalk.com.au, and ASIC’s innovation hub and regulatory sandbox for Australian financial technology (fintech) startups.
7
See http://www.marcgoodman.net/, and pwc’s Game of threats – A cyber threat simulation.
8
ASIC, Cyber resilience: Health check, Report 429, March 2015, http://asic.gov.au/regulatory-resources/find-a-document/reports/rep-429-cyber-resilience-health-check/
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10ESSENTIAL DIRECTOR UPDATE:16ESSENTIAL DIRECTOR UPDATE:16
The revolutionary aspect of these technologies exceeds
their new, powerful capabilities – such as the ability to
interpret brain signals, create rapid prototypes or edit
genomes. It is the expected speed, scale and influence of
their diffusion across industries and social groups that
will disrupt existing systems of transport, communication,
agriculture, production, security and governance. This will
impact our social and economic relationships and even our
sense of what it means to be human.
Much of the discussion to date has been polarised
around fears related to employment or promises that new
technologies represent a panacea for current economic
woes. We should be optimistic that new technologies will
provide new opportunities, however this optimism must be
matched with thoughtful action by directors – indeed by
all stakeholders – to embed positive values in technological
systems, support innovative regulatory systems and
ensure both the benefits and costs of the fourth industrial
revolution are shared fairly.
Nicholas Davis, Head of Society and Innovation, Member
of the Executive Committee, World Economic Forum.
1.1.3 Virtual reality (VR) technologies
Virtual reality (VR) technologies use interactive computer
graphics to create the perception that the user has been
transported into a world entirely created from digital media.
This year the release of high-end consumer VR headsets
(such as the HTC Vive and the Oculus Rift) and Mobile
VR techniques (like Google Cardboard of Samsung’s Gear
VR) means that millions of smartphone owners can now
download VR apps.
A similar cost/fidelity spectrum exists within augmented
reality (AR) technologies. A modern smartphone can be
used as a ‘magic window’ through which to observe virtual
data overlayed on the physical world and soon high-end
AR headsets like the Microsoft HoloLens, Meta and Google-
backed Magic Leap are expected to be released.
Deloitte’s tech report has highlighted this as a significant
technology trend for 2016 and the current surge of
consumer VR and AR devices means that techniques and
technologies previously only installed in specialist facilities
can now benefit millions of people. In fact, over the past
20 years, VR and AR technologies have been used to help
surgeons train apprentices, allow expert technicians to
remotely guide maintenance workers through a repair task
and even tele-operate mining robots. These technologies
are now starting to explode into education, tourism,
e-commerce, architecture, design, enterprise, entertainment,
art and even journalism.
While VR represents the next step in the ability to share
experiences, AR has the potential to be the next big shift
in personal and mobile computing. To achieve that, AR
will often require sensors like cameras and microphones
to be ‘always on’, constantly gathering data and, like an
attentive butler, responding to requests. The Pokémon Go
phenomenon, for example, has clearly shown that AR and
other gameplay incentives can bring a brand to the forefront
of people’s minds and entice them to give up personal
location information as long as they do not feel like they are
being exploited.
“ The emerging
transformation is...being
driven by technologies
which treat digital
connectivity and processing
capabilities as an essential
infrastructure ”
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11ESSENTIAL DIRECTOR UPDATE:16
AR devices and displays will increasingly need to gather
context information about the places, things and people
that form part of daily life. Whether the processing of this
information takes place in the cloud, or on the device, the
systems will need to pay careful attention to the way this
sensitive data is captured, presented, secured, shared or
kept private.⁹
Consideration should also be given to the types of
applications built using AR:
• The enhanced realism of virtual interactions can lead to
heightened physiological and emotional states (which can
be desirable or undesirable). For AR computing to be used
in social settings, appropriate consents may be required.
• Within the enterprise, physical designs and documents
may be captured and even sent to the cloud for optical
recognition processing, without explicit action by the user.
• Apps (like CluckAR from CHOICE10
) can provide
consumers with a great deal more information about
production or competitors that a business may have
assumed.
Matt Adcock is a Senior Research Engineer in CSIRO
Data61’s quantitative imaging team.
Gavin Walker is a Principal Experimental Scientist at
CSIRO Data61.
1.1.4 Advanced machine learning
Advanced machine learning (AML) gives computers the
ability to discover patterns and insights from data using
sophisticated algorithms. AML is now gaining significant
market traction - for example in organisations such as
Amazon - because of advances in data storage (more
affordable disks) and improved algorithms (better insights).
Data, not big data:
Data does not have to be big and much can be done with
small amounts of data that can fit on a $10 memory stick.
Hype:
AML is a powerful technology but it is not a panacea.
Despite this, the hype means there is an intense war
for talent in AML and organisations can expect to pay a
premium for talent.
Opportunities:
Like any new technology, AML can change the rules of the
game. Smart organisations should look for opportunities to
be the lateral aggressor: for example, a business does not
need to be traditionally working in the agriculture sector to
disrupt agriculture.
Not a single thing:
AML is not a single technology but a portfolio. It is a ‘general
purpose technology’ similar to railways, the steam engine
or electricity, and will underpin future economic growth.
Initially, AML was used commercially to detect email spam
or credit card fraud, and to create recommendation engines.
Now, every sector is expected to be impacted.
New business models:
New ownership and business models will be enabled by
AML embedded technologies, with profound implications
not only for strategy but also for the structures of
companies and industries.
Challenges and risks:
An abundance of data does not make conclusions certain.
Scientists have worked with large datasets for years, but
can still err in the decision-making process. Many vendors
offer enticing turnkey solutions, but a major challenge is
the lock-in this can engender. Seeking solutions that are
interoperable is a good risk mitigation strategy. Making
an organisation more dependent on data implies it needs
to put data onto its balance sheet and manage it like any
other asset.
Chelle Nic Raghnaill and Bob Williamson, Data61
9
L Hearn, When augmented reality bites, The Sydney Morning Herald, 15 September 2010, http://www.smh.com.au/digital-life/mobiles/when-augmented-reality-bites-
20100915-15bu3.html
10
CluckAR – The Free Range Egg Detector App, Choice, http://newthings.choice.com.au/cluckar
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12ESSENTIAL DIRECTOR UPDATE:16ESSENTIAL DIRECTOR UPDATE:16
1.1.5 Industrial analytics
Industrial analytics (IA) is about harnessing value from
data and increasing productivity. With the internet of
things creating a ubiquitous sensor capability, future
industrial processes will be more responsive (ensuring a
better quality of services and products), more productive
and more capable of taking into consideration data from
within an organisation and beyond. Sooner or later IA
will need to be embraced and an organisation’s risk
appetite will dictate when.
IA benefits from the fact that sensor data is actionable
and is tied to a given business process, for example the
supply chain. Sensors read parameters and processes,
while the analytics inform decisions on change processes.
What organisational opportunities can be expected with
IA?
•Substantial productivity gains and reduced waste by
supporting informed decision-making processes in
real-time;
•Facilitated audit processes and support for decision
making in real-time by keeping efficient track of
available data available and the rationale for decisions
made in the production line or service provided;
•Working environments made safer for employees by
providing relevant risk data across a logistics chain.
For non-executive directors there are some risks from
developing an IA solution that need to be considered.
Some examples of these risks include: How should
data privacy be considered, and appropriate consents
ensured, when deciding between a human or machine
decision-making process for an autonomous system?
Has the organisation attempted to minimise potential
public backlash by informing its customer base on how
IA is beneficial? And how will the organisation continue
operations, report performance and delivery if a data
blackout happens?
Boards may consider the following questions in managing
risk appetite and strategic opportunities offered by IA:
•Does the management team understand the value
proposition of IA for the organisation?
•Can the organisation demonstrate that the
opportunities associated with IA have been considered
for its business or technology strategy?
•How are data assets currently audited? What data is
not being measured or utilised and how can its value
be harnessed?
•What is the quality of the data, and how should data
quality be assessed and controlled?
•How does data management impact the organisation’s
risk appetite?
•Are delegation frameworks in place regarding decision-
making in data-driven processes?
•Does the board have access to technology expertise to
help navigate this area?
Paulo de Souza MAICD is an Office of the Chief
Executive Science Leader in micro-sensing technologies
and systems at CSIRO Data61.
“ future industrial processes
will be more responsive
(ensuring a better quality
of services and products).”
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13ESSENTIAL DIRECTOR UPDATE:16
1.1.6 Blockchain
A blockchain is a distributed database technology, which
was first used to record transfers of Bitcoin digital currency
between anonymous parties worldwide without the
involvement of trusted third parties such as banks. Today
the idea is being explored for commercial application
outside of the Bitcoin system. Rather than just financial
transactions, blockchains could record transactions of
any kind in any industry, without the involvement of
traditional intermediaries or third parties. This has the
potential to disrupt traditional market structures and to
reshape trust relationships in society. Some examples of
possibly impacted operations are the transfer of physical
assets in a supply chains, digital rights management,
securitised assets, business process execution, and
payments processing or voting.
Blockchains are sometimes erroneously called ‘trustless’
networks. In reality, trust is merely shifted from traditional
third parties to the technology underpinning the blockchain
systems, the developers who create them and the market
incentives supporting their operation. Nonetheless, this is a
major change in how transactional relationships can operate
in the economy.
There are significant implications for potential competitive
disruption across all industries and serious implications for
governance and risk management. Organisations that rely
on blockchain-based systems internally, or through partners,
will need evidence that these systems are trustworthy and
that the evolution of those systems will continue to be
aligned with their needs and risk profiles.
The early blockchain systems were public whereby any
anonymous party could join the system as a processing
node and participate in transactions. (The key technical
advance of blockchain technology is enforcing data integrity
and unmodifiable audit trails, despite this anonymous global
participation.) However, some recent blockchain systems
are instead private, or ‘permissioned’ systems (often called
Distributed Ledger Technology).
In private blockchains there are gatekeeper authorities
who control access to participation and use of the
system. These do not provide the same low barrier to
participation as public blockchains, but they do provide
more control and visibility on the operation of the
system and so may be a better fit with existing regulatory
requirements. Regardless, many uncertainties about
feasibility, scalability, and security remain with this
emerging technology. Many organisations are developing
internal ‘proof of concept’ systems to better understand
how it may impact their business. In addition, many
boards may need to think differently about how they
manage contractual issues and delegations in this new
environment. This is not just technology research and
development, it is a critical way to identify and evaluate
risks and opportunities for effective organisational
governance.
Mark Staples is a Principal Researcher and a Group Leader
in the software and computational systems program at
CSIRO Data61, and is a Conjoint Associate Professor in the
School of Computer Science and Engineering at UNSW.
“ blockchains could record
transactions of any kind in
any industry, without the
involvement of traditional
intermediaries or third
parties.”
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1.2 Government
1.2.1 Government response to FSI and Harper reviews
The Australian government has responded to two major
enquiries that it commissioned in 2013, the Financial
System Inquiry (FSI) and the Harper Competition
Review, respectively. The FSI was conducted by an
expert panel chaired by David Murray, reporting to
government in December 2014. The competition review
was conducted by Professor Ian Harper and reported in
March 2015.
On the FSI, the government has accepted most of the
recommendations, including significant changes to
strengthen bank capital. Important reforms include new
capability reviews of regulators (commencing with ASIC)
and governance reforms for superannuation (yet to pass
the Senate). The Productivity Commission will also be
asked to review competition in the financial services
industry in 2017.
The Harper review was the first major review of
competition laws in more than 20 years, making 56
recommendations for reform. The most contested proposal
was for a new ‘effects test’ to be added to the s 46 misuse
of market power provisions in the Competition and
Consumer Act 2010. This divided the business community:
favoured by small business and opposed by others who
argued it would stifle competition and create uncertainty.
In March the government announced its intention to
proceed with a timetable for draft legislation by end 2016,
but the measure does not have bipartisan support.
Stephen Walters, Chief Economist, AICD.
1.2.2 Governance of the nation: A blueprint for
reform
As the voice of excellence in governance, the AICD brings
a unique perspective to the challenges facing our nation.
In March 2016 the AICD released an important document
championing national reform priorities – Governance of the
nation: A blueprint for growth.11
The publication reflects the AICD’s concern at the short-term
focus of political discourse and policy making. Directors
understand that long-term planning is critical to sustainable
growth and value, and that short-termism can be the enemy
of good governance.
The policy prescriptions in the AICD’s Governance of the
nation: A blueprint for growth encourage a focus on long-
term gains for the nation from different, and often difficult,
reform opportunities. These include:
• reforming national governance - including fixed four-year
terms for the federal government;
• fiscal sustainability – spending restraint (below 24% of
GDP) and substantial tax reform (GST reform, personal tax
cuts, CGT reform and incentives for removal of inefficient
state taxes);
• innovation – encouraging a bipartisan agenda to lift
Australia from ‘lag’ to ‘lead’ on global innovation
measures, including shifting the dial of regulatory settings
encouraging risk aversion;
• not-for-profit sector – five year funding cycles for funded
NFPs as a best practice guide;
“The Harper review was
the first major review of
competition laws in more
than 20 years, making
56 recommendations for
reform.”
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11
See Governance of the nation: A blueprint for growth, AICD, 2016, http://www.companydirectors.com.au/director-resource-centre/policy-on-director-issues/policy-
papers/2016/governance-of-the-nation-a-blueprint-for-growth
• human capital – boosting female participation in work
and leadership, and simplifying the industrial relations
framework and improving its governance;
• national infrastructure – a 15-year national investment
plan for productive infrastructure.
These recommendations were informed by the insights
of our diverse membership through the AICD’s Director
Sentiment Index and other channels. The Governance of
the nation: A blueprint for growth reflects a broader focus
for AICD advocacy work, as discussed by AICD Chairman
Elizabeth Proust AO FAICD:
“The AICD has a diverse membership of nearly
38,000, collectively responsible for millions of
jobs and billions of dollars across the economy.
We can either run with a narrow agenda, which I
think we’ve been guilty of in the past, or attempt
to have a role in the broader debate about issues
for the governance of the country in the medium-
to-long term. We’ve chosen to do the latter.”
Louise Petschler, General Manager Advocacy, AICD.
1.2.3 Retention of the Australian Charities and
Not-for-profit Commission (ACNC)
Following the election of the Abbott Government,
Kevin Andrews, the then Minister for Social Services,
committed to abolish the Australian Charities and Not-
for-profits Commission (ACNC). Andrews proposed
a return to the Australian Taxation Office as de facto
charity regulator with a ‘Centre for Excellence’
established in the ACNC’s place. Following this
announcement, many in the sector including the ACNC
called for the ACNC to be retained.
In March of 2014, Minister Andrews introduced a Bill
(ACNC No. 1 Repeal Bill) stating the government’s
intention to abolish the ACNC, but required additional
legislation to take effect. A further Bill was never
brought forward, and a subsequent reshuffle moved
Andrews to the defence portfolio.
In March of 2015, the Turnbull Government’s Minister
for Social Services and the Assistant Treasurer jointly
announced the retention of the ACNC. Their statement
indicated that consultation showed “sufficient support”
for the retention of the ACNC, noting that the
government wanted to provide certainty to the sector.
The announcement proposed a renewed focus for the
ACNC on helping charities to become more effective and
improve their governance.
Lucas Ryan, NFP Policy Adviser, AICD.
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1.2.4 Changes to the definition of charity
In 2012, the Western Australian State Administrative
Tribunal found that the Chamber of Commerce and Industry
of Western Australia was charitable for the purposes
of state payroll tax concessions. This made clear in the
common law that such member advocacy bodies could be
considered charitable, potentially opening the entitlement
to other organisations.
The introduction of the Charities Act 2013 (Cth) codified
centuries of existing common law and legislation around
the definition of charity into one Act for the purposes of
determining charity status at the Commonwealth level.
Among other things, the Act clarified the entitlement of
organisations involved in advocacy work to charity status.
Subsequent to this, governments in the Australian Capital
Territory (ACT) and Western Australia brought in legislation
to exclude some peak bodies and professional groups from
the definition of charity applied at the state level, ending
their entitlements to the benefits received by charities in
these jurisdictions.
The ACT government put forward the explanation that,
as Australia’s capital, their jurisdiction is home to a higher
concentration of such organisations and is therefore subject
to a disproportionate drain on revenue. The move has been
criticised by many in the sector, noting that it is a departure
from the general trend towards the harmonisation of state
and territory requirements.
Lucas Ryan, NFP Policy Adviser, AICD.
“The ACT government put
forward the explanation
that their jurisdiction
is home to a higher
concentration of such
organisations and is
therefore subject to a
disproportionate drain
on revenue.”
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1.3 Politics
1.3.1 Election update - implications for policy
We know now that the Coalition government was returned
at the federal election. The Coalition has secured the 76
seats needed to govern in its own right but, as insurance,
three independents have committed to passing supply bills
and supporting the government in confidence motions. In
the upper house the crossbench numbers 20 senators, with
the balance of power held by independents and senators
from minor parties.
Some argue that the splintered election result proves the
political system is broken and that Australia faces a crisis
of politics and confidence, but the new configuration of
the houses is the most common state for our Parliament.
Governments have controlled both houses for only one
quarter of the time since proportional representation was
introduced for the upper house in 1949.
And, not all of the Coalition’s legislative measures will
be opposed. There is, for example, a decent chance the
planned company tax cut will be passed by Parliament,
although only for smaller companies. Similarly, the
government’s proposed changes to superannuation
concessions probably have broad support, as does the
increase in the tobacco excise and the crackdown on
multi-national tax avoidance.
The prospects for other measures, though, have dimmed.
The Parliament is unlikely to rubber stamp the government’s
planned changes to education funding, or the proposed
increase in the pension age. Similarly, the government’s
planned changes to eligibility arrangements for the dole and
savings measures in welfare probably are doomed.
The really bad news is that the tight election result, the
fraught campaign that saw rank populism rewarded,
and the highly-partisan nature of Parliamentary debate
mean that much needed, longer term reform in areas like
taxation, industrial relations and federalism most likely
will be bequeathed to future Parliaments.
Stephen Walters, Chief Economist, AICD.
1.3.2 Social impact investing
Social impact investments have the purpose of
achieving a social or environmental benefit alongside a
financial return. The most common form of this model
is the social impact bond (SIB). SIBs are financial
instruments through which private investors provide
capital to a third party to achieve agreed social or
environmental outcomes, and a return is paid based on
the cost savings made to government if the outcome
is achieved. SIBs, and other forms of social impact
investing, have been gaining increased attention in
Australian markets and internationally.
The key benefit of this growing trend is the availability
of capital which can be applied to solving social and
environmental challenges with the market for impact
investing expected to reach $32 billion in Australia over
the next decade. Social impact investing also facilitates
cross-sector cooperation and creates a positive
incentive for businesses to collaborate with, support or
indeed become socially-motivated organisations.
However, in order for impact investing to continue
to grow, government must be an active participant.
Government’s role is to identify policy priorities,
enter into contracts with investors and pay returns
on successful schemes. However, while government
approaches all new ideas with caution, entrepreneurs
do not. Although social impact investing represents
great opportunity for many organisations, for example
The Benevolent Society is on track to pay a 5%+
return on their social impact bond, it is a complicated
undertaking that requires sophisticated governance
structures to support it. More work must be done to
facilitate the involvement of all sectors to participate in
this work with confidence.
Lucas Ryan, NFP Policy Adviser, AICD.
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1.4 Tax risk management
1.4.1 Voluntary tax transparency code
On 3 May 2016 (budget night), the government released
and endorsed the voluntary tax transparency code (‘Code’)
as developed by the Board of Taxation. The government is
encouraging all companies to adopt the Code, commencing
with the 2016 financial year and onwards.
The Code is one of the most comprehensive tax
transparency measures in the world and is intended to
facilitate a more informed public debate on business
taxes through enhanced public disclosures targeted at a
reasonable user. Whereas a mandatory code is likely to
be implemented as a compliance exercise, a voluntary
code provides a greater opportunity for the company
board to ensure the ‘disclosure’ is meaningful for
stakeholders and consistent with other communication
strategies of the company.
The Code constitutes a set of principles to guide
disclosures and includes the following recommendations:
• Part A - entities with Australian turnover of $100 million
or greater are encouraged to disclose:
- a reconciliation of accounting profit to income tax
paid each year; and
- effective tax rates for Australian and global
operations.
• Part B - entities with Australian turnover of $500
million or greater are encouraged to disclose additional
information related to:
- the company’s approach to tax strategy and
governance (including details of dealings with the
Australian Tax Office (ATO));
- details of all federal, state and local tax
contributions; and
- a qualitative (rather than quantitative) summary of
international related party dealings.
Increased scrutiny by the media (especially social media)
and politicians means there is an expectation that
companies will respond to and meet increased demand
for more public disclosures in relation to tax information.
In addition, the ATO publicly reports certain tax
information on both public and foreign owned companies
(whose total income is at least $100 million) and private
companies (Australian private companies with total
income of at least $200 million), including the taxpayers’
name, total income (similar to gross accounting revenue),
taxable income and tax paid.
Directors should also be aware that there is now a
requirement for Australian taxpayers to provide the
commissioner with general-purpose financial statements
(GPFS) for income years commencing on or after 1
July 2016, even where such reports are not otherwise
required by ASIC. This may be an additional compliance
burden and add to the cost of compliance.
All of these developments increase the relevance of a
board’s communication strategy regarding the group’s tax
contribution to the economy.
Karen Payne, CEO and Board Member, Board of Taxation
and Deepti Paton, Board of Taxation Secretariat.
“ The Code is one of the
most comprehensive tax
transparency measures in
the world and is intended
to facilitate a more
informed public debate on
business taxes...”
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1.4.2 New Australian Tax Office (ATO) guide signals
increased scrutiny of tax risk governance
The assessment of the board governance controls
concerning taxation risk by the Australian Taxation Office
(ATO) is an important factor in any ATO engagement with
a corporate taxpayer, including the tax risk rating, level of
ATO review and scrutiny, and ultimately the tax audit.
The ATO guide tax risk management and governance,
updated in August 2016, sets out the ATO views on the
role of the board of directors and management in the
control of tax risk. The guide fundamentally recommends
that taxpayers evidence the operation of their controls
through regular control testing.
Directors should be aware of the ATO views for several
reasons, including:
• There is increased activity by the ATO on corporate tax
governance risk reviews.
• The board should be aware if their governance protocols
around tax risk will meet with approval by the ATO.
• The Board of Taxation recommendation for voluntary
disclosure of the ‘tax governance framework’ for large
groups increases the potential significance of such
measures; this was endorsed by the government as part of
the 2016/17 budget.
The following checklist reflects the key issues the ATO
will review in any governance risk review:
• There is an established framework to identify and manage
tax risk:
- The board should endorse an overarching risk
management framework which includes tax or
alternatively a formal tax control framework.
- There should be documented roles and
responsibilities around tax risk management.
- The board should be appropriately informed
(regularly and materially) about the tax control
framework and have sufficient information to ensure
effective control.
• Policies and controls are regularly assessed:
- There should be periodic internal control testing.
Although the standards in the guide reflect ‘best practice’
and are not mandated, they do provide a clear pathway
for corporate taxpayers wishing to minimise compliance
costs and minimise lost productivity as a result of
‘avoidable’ scrutiny by the tax regulator.
The guide can be of assistance to the board as follows:
• The board can reference and leverage this document in
communicating its approach to tax risk governance.
• The board can commission internal risk reviews to
self-assess the existing tax governance framework and
documentation of same against the regulator’s ‘best
practice’ standards.
• The board can benchmark existing governance controls
against the ATO standards – for example by testing
on the basis of if not, why not – and compare existing
governance controls for consistency across corporate
taxpayers and identify any areas for improvement in the
tax control framework.
Karen Payne, CEO and Board Member, Board of
Taxation.
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1.4.3 Multinational tax avoidance and the role of
the director
Australian directors will be well aware that the domestic
tax landscape is increasingly changing to respond to global
tax developments and interactions. This requires a new
level of international tax awareness and competency of
management to ensure they are identifying when and how
these new measures will impact the company and bring
any material risks to the attention of their board. These
risks include greater penalties, increased audit & scrutiny
by the ATO and increased compliance obligations.
Directors of listed, large and private companies should expect
to be made aware of some of the following new measures.
Changes to target multinational tax avoidance by
corporate groups:
• Multinational anti-avoidance legislation (MAAL) now
applies to significant global entities deemed to be avoiding
a taxable presence in Australia. A significant global entity
is broadly a global parent entity with annual global
income of at least $1 billion, or any member of that global
parent entity’s consolidated accounting group. Penalty
amounts have doubled for MAAL scheme tax liabilities.
• A proposed diverted profits tax (DPT) is to be introduced
at the tax rate of 40%, on profits transferred out of
Australia by a significant global entity – that is, under an
offshore related party transaction that is deemed by the
commissioner to lack sufficient economic substance and
designed to secure the tax reduction. The DPT may apply
when a transfer price (including on debt instruments)
reduces the tax paid on the profits generated in Australia
by more than 20%. Liability for a deemed DPT amount
will be imposed up-front at the time an assessment is
issued by the ATO and can only be adjusted following a
successful review of the assessment or if the taxpayer
amends their assessment during the review period.
• The combination of measures mirror the so-called ‘Google
tax’ measures introduced in the UK and are directed at
offshore entities making profits from the Australian market
without returning the appropriate profit in Australia.
• The final report of the Senate Economics References
Committee’s inquiry into corporate tax avoidance in
Australia is also yet to be delivered.
Increased transparency around taxes paid and collected:
• Refer to section 1.4.1 Voluntary tax transparency code.
The 15 action plans of the Organisation for Economic Co-
Operation and Development (OECD) to address base erosion
and profit shifting (BEPS):
• The introduction of new standards for transfer pricing
documentation and country-by-country reporting require
Australian taxpayers to produce additional documentation
for the ATO on their group structure and related party
transactions: a local file, master file and country-by-
country report, as recommended by the OECD.
Directors should expect an update on these tax measures
at least quarterly at their board meetings and more
regularly through their audit risk committee meetings.
Karen Payne, CEO and Board Member, Board of Taxation
and Jarrod Thomas, Board of Taxation Secretariat.
“ ...the domestic tax
landscape is increasingly
changing to respond to
global tax developments
and interactions. ”
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1.5 Asia
1.5.1 The rise and change of economies in Asia
Australia’s future inevitably is hitched to developments
in the economies to our north. Not only is Australia
located in Asia, but two thirds of our exports are
destined for customers there. China receives a whopping
30% of our merchandise exports, more than any other
country. Japan receives 15%, Korea another 10%.
Australia rode modernisation in Asia by exporting
commodities needed for rapid development – coal
and natural gas for power generation, and iron ore for
construction of infrastructure and housing. Booming
demand for our commodities triggered a surge in prices,
which prompted the investment boom in Australia and
lifted prosperity.
Increasingly, though, Australia’s future lies in exporting
services into Asia, including tourism, education and
healthcare, as well as ‘hard’ commodities. Consumers are
becoming a larger share of the Asian economies. Living
standards are rising, which brings with it higher demand
for education and healthcare, and the desire to travel.
There still will be demand for commodities but, over time,
services will come to dominate our exports into Asia.
A good example is China, which already provides
Australia’s largest source of tourists, as well as having
more tertiary students here than any other country.
This reflects rapid development in China, which
continues to evolve towards being a more modern,
outward looking economy.
The World Bank estimates that, by 2030, two thirds
of the world’s middle class will be located in Asia, so
Australian exporters cannot stand still as the Asian
economies evolve. After all, increasingly wealthy Asian
households won’t be buying shiploads of iron ore!
Stephen Walters, Chief Economist, AICD.
“ Increasingly, though,
Australia’s future lies in
exporting services into
Asia, including tourism,
education and healthcare,
as well as ‘hard’
commodities. Consumers
are becoming a larger share
of the Asian economies.
Living standards are rising,
which brings with it higher
demand for education and
healthcare, and the desire
to travel. ”
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1.6 Board Composition
1.6.1 A review of the academic literature examining
independent board members and company
performance
The Corporate Governance Council of the ASX released
its Corporate Governance Principles and Recommendations
3e in 2014. Principle 2 in this documents states that
“the board needs to have an appropriate number of
independent directors”.
The recent working paper Board Composition and
Company Performance: New Australian Evidence (A Frino,
Sydney Business School, University of Wollongong,
2016), examines the published academic literature which
has examined the relationship between the proportion
of board members who are outside or independent and
company performance. The paper identifies that there
have been at least 11 such studies published in peer-
reviewed scholarly journals which have tested for the
relationship in samples of Australian companies.
Six of these studies have examined the relationship
between the proportion of independent board
members and the return on assets or return on equity
of companies. Of these, two12 13
provide evidence of a
positive and statistically significant relationship between
board independence and the return on assets or the
return on equity of companies while the rest could not
find a statistically significant relationship.
Similarly, 10 of these studies have examined the
relationship between the proportion of independent
board members and Tobins Q or market-to-book ratios.
Such ratios are not strictly performance measures, but
may merely be measuring the investment in growth
opportunities by companies. This literature provides
mixed and contradictory findings. While two of these
studies14 15
provide some evidence of a statistically
significant positive relationship between board
independence and Tobins Q or market-to-book ratios,
one16
provides evidence of a negative relationship and
the remainder could not find any statistically significant
relationship.
On the balance, the published academic literature
provides evidence of a positive relationship between
board independence and company performance.
Alex Frino, Professor of Economics, Sydney Business
School, University of Wollongong.
1.6.2 Independence of super fund trustee boards
The federal government has had a long-term aim of
requiring that superannuation funds have at least one
third independent trustees. The focus of public debate is
primarily on the not-for-profit (NFP) sector because the
retail superannuation funds, primarily operated by the
banks and insurers, have already agreed that they will
have a majority of independent trustees.
The industry bodies that represent the NFP sector have
successfully frustrated the government’s ambitions and
have gained agreement for a review of best practice
governance standards for the NFP sector. It is understood
that the review has been completed and has been held
over till after the federal election.
12
Bonn, ‘Board structure and firm performance: Evidence from Australia’, Journal of Management & Organization, vol 10, no 01, 2004, pp 14-24.
13
M Hutchinson, ‘An analysis of the association between firms’ investment opportunities, board composition and firm performance’, Asia-Pacific Journal of Accounting &
Economics, vol 9, no 1, 2002, pp 17-38.
14
D Henry, ‘Corporate governance structure and the valuation of Australian firms: Is there value in ticking the boxes?’, Journal of Business Finance & Accounting, vol 35,
nos 7-8, 2008, pp 912-942.
15
P K Pham, J A Suchard and J Zein, ‘Corporate governance and alternative performance measures: evidence from Australian firms’, Australian Journal of Management, vol
36, no 3, 2011, pp 371-386
16
G C Kiel and G J Nicholson, ‘Board composition and corporate performance: How the Australian experience informs contrasting theories of corporate
governance’, Corporate Governance: An International Review, vol 11, no 3, 2003, pp 189-205, http://scholar.google.com.au/citations?view_op=view_
citation&hl=en&user=EYutXVYAAAAJ&citation_for_view=EYutXVYAAAAJ:u5HHmVD_uO8C and
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The NFP sector claims that their current representative
model has led to improved performance compared to the
for-profit sector. Commentators including the Australian
Prudential Regulation Authority (APRA), the regulator
of the superannuation funds, challenge these claims.
APRA believes that:
“…independent directors broaden the skills and
capabilities that can be brought to the board
table, and improve decision-making by bringing
an objective perspective to issues the board
considers”.
The existing equal employer and employee
representational rules were established in 1993 when the
coverage of superannuation funds extended to include
all employees. Contributions for most of these employees
were effectively a salary offset. The funds were either
specialized industry funds or employer funds. The
landscape is now very different. Most of the large
employer funds have now closed and the large industry
funds are now primarily public offer funds.
The AICD supports the government and APRA’s stand
on independent trustees. Superannuation funds are
now some of Australia’s largest financial institutions.
They are investing for our future. APRA should be
allowed to move to a governance model that they already
successfully apply to the banks and insurers. Whilst
there is still a legitimate debate to be had on exactly
what makes a trustee ‘independent’ we believe that new
rules can be implemented over a period of three years.
Barry Rafe FAICD, Principal, Rafe Consulting.
“ The existing equal
employer and employee
representational rules
were established in 1993
when the coverage of
superannuation funds
extended to include all
employees. Contributions
for most of these
employees were effectively
a salary offset. ”
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1.7 Strategy
1.7.1 The role of boards in strategy
The role of the board in strategy is a key corporate
governance issue. Though it is widely understood that
strategy is an important board function, there is less
clarity around how involved boards should be.
Historically, the board’s role in strategy was often
confined to an annual review of the strategy proposed
by executive management, and its approval or rejection.
Today, boards will typically oversee two key strategic
functions:
1) strategy development; and
2) strategy execution.
More effective and value-adding boards tend to assume a
role that is broader than pure oversight.17
The role of boards in strategy development varies
significantly from one organisation to the next. In
addition to an oversight role, the board may provide
support to management, shape or co-create strategy.
Typically, this role evolves over time within an
organisation in response to changing circumstances.
In terms of strategy execution, the board’s primary
responsibility is to ensure there is an effective
executive management team in place. In particular,
it needs to choose the ‘right’ CEO. While it is not the
board’s role to manage the execution and operational
activity itself, more effective boards tend to actively
monitor strategy execution.
Deloitte18
argues that boards should focus their
attention equally on strategy development and
execution, since much of the effectiveness of a strategy
lies in its execution.
There has been a growing push for deeper and more
active board involvement in strategy. This has been
fueled by, for example, high profile corporate collapses
and scandals, as well as growing shareholder activism.
Recent research supports a greater role for boards in
strategy: for example, McKinsey (2014) found that high
impact boards spend triple the time on strategy than low
or moderate impact boards.
For optimal board and organisational performance,
the board needs to clearly understand and articulate
its role in relation to strategy within the organisation.
Importantly, the board should ensure that the exercise of
its strategic function is not confined to an annual event;
it is a critical and ongoing board responsibility.
Louise Pocock, Deputy Executive Director of the AICD
Governance Leadership Centre.
17
C Bhagat and C Kehoe, ‘High-performing boards: What’s on their agenda?’, McKinsey Quarterly, April 2014, http://www.mckinsey.com/business-functions/strategy-
and-corporate-finance/our-insights/high-performing-boards-whats-on-their-agenda
18
Deloitte LLP, ‘Hot Topics: Improving Board Effectiveness: Oversight of Strategy’, Corporate Governance Monthly, November 2012, http://www2.deloitte.com/content/
dam/Deloitte/dk/Documents/governance-risk-compliance/Improving-Board-Effectiveness-Oversight-of-Strategy-Hot-Topics.pdf
“While it is not the board’s
role to manage the
execution and operational
activity itself, more
effective boards tend to
actively monitor strategy
execution.”
25. companydirectors.com.au
25ESSENTIAL DIRECTOR UPDATE:16
2.0 THE GOVERNANCE ENVIRONMENT
2.1 Corporate culture
2.1.1 Corporate culture
Since the global financial crisis (GFC), regulators around
the world have increasingly focussed on the role of
culture in corporate misconduct, particularly in the
financial services sector. In Australia, the Financial
System Inquiry recognised the impact of poor corporate
cultures on consumer confidence in the financial system
in making its recommendations. Additionally, both
the prudential and market regulators – the Australian
Prudential Regulatory Authority (APRA) and Australian
Securities and Investments Commission (ASIC) – have
intensified their scrutiny of cultural issues and the role of
boards in shaping organisational cultures.
With effect from 2015, APRA’s expectations of banks
and insurers’ management of their risk cultures have
been set out in prudential standards CPS/SPS 220 Risk
Management. These instruments require the board of
directors to oversee the establishment of a sound risk
management culture, including forming a view as to the
existing risk culture, identifying any desirable changes to that
culture and overseeing the implementation of those changes.
While ASIC is yet to issue any formal guidance on
culture, the regulator has repeatedly emphasised its
interest in culture as an indicator of conduct in speeches
and reports, and at its 2016 annual forum Culture Shock.
ASIC is incorporating considerations of culture into its
risk-based surveillances and other work involving the
assessment of risk. The regulator is also raising awareness
of the importance of culture through discussions with
stakeholders and public messages. Although ASIC has
acknowledged that ‘culture is not something that can be
regulated with black letter law’, it has made plain its view
that ‘values and culture leadership must come from the
top’ and that ‘the board plays an important role in setting
the tone, influencing and overseeing culture’.19
Importantly, culture is an issue for all boards, regardless
of sector, industry or size. And as research has repeatedly
shown, organisational culture not only presents risks
and challenges for companies and their boards, but also
competitive advantages as culture can powerfully drive
performance.
Lysarne Pelling, Senior Policy Adviser Advocacy, AICD
19
G Medcraft, ‘Tone from the top: Influencing conduct and culture’, ASIC chairman’s speech at the Thomson Reuters 4th Annual Australian Regulatory Summit, 21 June
2016, http://download.asic.gov.au/media/3901451/greg-medcraft-speech-thomson-reuters-4th-annual-australian-regulatory-summit-21-june-2016.pdf.
“...regulators around the
world have increasingly
focussed on the role
of culture in corporate
misconduct...”
26. companydirectors.com.au
26ESSENTIAL DIRECTOR UPDATE:16ESSENTIAL DIRECTOR UPDATE:16
2.2 Short-termism
2.2.1 Short-termism
An effective board manages and balances short-term,
medium-term and long-term horizons. It attends to the
company’s long-term interests and financial health, as
well as short-to-medium-term risks and opportunities.
Yet there is arguably an imbalance in corporate
decision making in favour of short-term perspectives
and objectives. This arises from various pressures on
companies and their leadership, including stakeholder
demands, reporting practices and requirements, and
reward structures.
Public companies, for example, seek to manage market
expectations. Many investors today are holding onto
their stock for less time and focusing on short-term
investment performance. Even where investments
have a longer-term focus (for example, retirement
benefits), investment managers are often rewarded
for their performance over the short-term. Further,
notwithstanding modest earnings growth, dividends paid
by Australian listed companies have grown substantially
since the global financial crisis20
, thereby reducing capital
reinvestment for long-term growth.
The concern is that excessive short-termism can impede
long-term value creation and the sustainability of
corporations. Beyond this, it presents broad social and
economic challenges, including in relation to the need
to address climate change, invest in infrastructure to
accommodate future needs, and promote innovation for
societal benefit.
There are various practices that boards can adopt to help
their organisations limit excessive short-termism. For
example, working with management, the board can:
• set long-term, forward-looking strategy, and ensure
it is clearly communicated to investors and other key
stakeholders;
• allocate resources for ongoing investment in long-term,
value-creating opportunities such as research and
development;
• monitor external communications, and the form and
content of financial statements, to ensure they clearly
communicate the company’s long-term, value-creating
prospects;
• build and reinforce a positive, long-term corporate
culture, including through mission, vision and values
statements that emphasise innovation and responsibility
(for example, customer retention and safety); and
• tie a meaningful proportion of executive remuneration
to incentive measures that look beyond short-to-medium
term market or operational performance and align with
the company’s long-term strategy.
Given the accountability of the board to their
organisation’s shareholders and other key stakeholders,
and the board’s vantage point above day-to-day
operational and management activity, the board is
uniquely placed to be the custodian of long-term value.
Louise Pocock, Deputy Executive Director of the AICD
Governance Leadership Centre
20
M Bergmann, ‘The rise in dividend payments’, RBA Bulletin, March 2016, http://www.rba.gov.au/publications/bulletin/2016/mar/pdf/bu-0316-6.pdf
“The concern is that
excessive short-termism
can impede long-term
value creation and
the sustainability of
corporations.”
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27ESSENTIAL DIRECTOR UPDATE:16
2.3 Risk
2.3.1 Corporate social responsibility (CSR) activism
Attempts to bring about corporate change through
environmentally focussed shareholder activism has
been part of the Australian landscape for some time.
More recently, the Australasian Centre for Corporate
Responsibility (ACCR) requisitioned shareholder
resolutions at the 2015 AGMs of ANZ, AGL and Origin
Energy on climate change issues.21
The resolutions were
not endorsed by the boards of those companies and not
passed by the members.
A test case run by the ACCR has now effectively
ended shareholder requisitioned resolutions which are
‘advisory’ or on matters relating to the management
of a company.22
In this case, the ACCR challenged the
approach of the Commonwealth Bank of Australia (CBA)
to shareholder resolutions requested for its 2014 AGM.
The court’s decision in 2016 confirms that directors:
• need not put up for vote resolutions that purport to direct
management or to express shareholder opinion; and
• can comment on, and recommend against, shareholder
requisitioned resolutions.
Despite this decision, the level of environmentally
focussed shareholder activism is unlikely to decline.
The ACCR (and others) have had some success in
raising awareness of their campaign by requisitioning
special resolutions to amend the constitutions of large
Australian banks, energy and mining companies. While
it is not surprising that none of these resolutions have
been successful in Australia, considering the 75% voting
threshold required, they have brought attention to the
issues raised. For example, AGL and Origin Energy have
committed to the “We Mean Business” initiatives.23
It is therefore likely that shareholder activists will
continue to make use of all available corporate
governance tools, including seeking constitutional
amendments and commenting at AGMs.
Mary Boittier, Executive Counsel, Herbert Smith
Freehills
21
See http://www.accr.org.au/
22
Australasian Centre for Corporate Responsibility v Commonwealth Bank of Australia [2016] FCAFC 80
23
See http://www.accr.org.au/power; https://www.originenergy.com.au/about/investors-media/media-centre/origin-becomes-worlds-first-energy-company-to-adopt-
seven-initiatives-climate-change.html; https://www.agl.com.au/about-agl/media-centre/article-list/2015/september/agl-adopts-we-mean-business-commitments
“...the level of
environmentally focussed
shareholder activism is
unlikely to decline.”
28. companydirectors.com.au
28ESSENTIAL DIRECTOR UPDATE:16ESSENTIAL DIRECTOR UPDATE:16
2.4 Diversity
2.4.1 Progress towards 30% by 2018
The number of female directors on ASX 200 boards is
now at 23.4 per cent (30 June 2016). This number has
increased from 20.4 per cent in April 2015 when the
AICD called for all boards, with particular emphasis on
ASX 200 boards, to achieve at least 30 per cent female
directors on their boards by 2018. Female appointments
to ASX 200 boards have tracked above 40 per cent
so far in 2016, the highest rate since the AICD began
monitoring figures in 2009. This solid performance in the
first five months of the year indicates that the target may
be reached by 2018.
The AICD is working with chairs and non-executive
directors of the ASX 200, executive search consultants,
investors and other individuals that have a key role
in influencing and advocating for change to ensure a
holistic and comprehensive approach to increasing the
number of women on boards.24
Rhian Richardson, Board Diversity Manager, AICD
2.4.2 Cognitive diversity
Bringing together a diverse range of skills and experience
on a board is an essential part of good governance.
Research also proves that it contributes to better financial
performance. Increasing board diversity with the intention
of improving board performance is not as simple as
adding female directors or directors from cultural or
linguistically diverse backgrounds, although that can be a
good start. Directors ultimately should consider cognitive
diversity and understand how diversity of thinking
works. Cognitive diversity relates to the different mental
processes, perceptions and judgements individuals possess
and the influence these have on decision-making.
In Which Two Heads Are Better Than One?25
, Juliet
Bourke demonstrates that senior leaders are more likely
to draw on one or two default approaches to thinking
when making decisions. Juliet cites research which
indicates that relying on only one ‘thinking approach’
produces a 70 per cent rate of accuracy. By contrast,
when six different thinking perspectives are applied to
the discussion, these accuracy rates can be elevated to
between 90-100 per cent. In this book she identifies
what those six thinking ‘attributes’ or approaches are, so
as to provide a framework for enhanced decision making.
Juliet also recognises the confluence of diversity
elements, mental models and bias and how these all
contribute to team dynamics. For boards to benefit from
demographic and cognitive diversity, individual directors
should engage in both self-reflection and analysis of
their peers, providing deeper awareness of the factors
that contribute to board decisions. Harnessing the unique
approaches of fellow directors enables individuals and
teams to be more deliberate and effective in making
better decisions.
Rhian Richardson, Board Diversity Manager, AICD
24
See http://30percentclub.org/about/chapters/australia.
25
J Bourke, Which two heads are better than one? How diverse teams create breakthrough ideas and make smarter decisions, AICD, 2016, http://www.companydirectors.
com.au/director-resource-centre/publications/book-store/which-two-heads-are-better-than-one
“Bringing together a
diverse range of skills and
experience on a board is
an essential part of good
governance.”
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29ESSENTIAL DIRECTOR UPDATE:16
2.5 Meetings
2.5.1 Review of the 2015 annual general meeting
(AGM) season
The tectonic post-millennium shifts in international
politics, global financial markets and the falls in oil and
commodity prices pose serious implications for directors,
management and shareholders. Boards must satisfy
shareholders that they understand and are capable
of managing uncertainties and risks in the current
climate. Separation of governance and management are
fundamental at this time.
Board and senior executive remuneration and
commitment to board diversity should be anticipated as
matters concerning shareholders.
Corporate and not-for-profit boards will have to be better
equipped and more prescient about future events and
decisions affecting both short and medium term plans.
Chairs and boards will have to be far more rigorous in
satisfying shareholders about:
• medium and long term forecasting;
• testing risk profiles influencing the business;
• monitoring and reviewing board performance, and
credibly substantiating directors and CEO’s remuneration;
and
• remuneration being adjusted accordingly to reflect
unsatisfactory results, if performance has been below
forecast; in some cases shareholders will ask why senior
management and non-executive directors should not be
removed or demoted.
Far more intelligent assessments must be made about
handling critical data and communicating results.
Reliance cannot be placed on current media such
as Facebook and Twitter. They may remain part of
the social milieu but will never be a core source of
reliable information which a non-executive director or
shareholders can rely upon.
Forecasters, analysts and the management who
directors will expect to be ‘ahead of the pack’, will all
need highly evolved prospective intellectual skills and
the greatest challenge will be the faster evolution of
industry to supply increasingly knowledgeable buyers in
world markets with what they want, how they want it
delivered, how much they are prepared to pay for it.
Ken Baxter, Commissioner of the Productivity
Commission and Chair of XRF Scientific Ltd
“Corporate and not-for-
profit boards will have to
be better equipped and
more prescient about
future events and decisions
affecting both short and
medium term plans.”
30. companydirectors.com.au
30ESSENTIAL DIRECTOR UPDATE:16ESSENTIAL DIRECTOR UPDATE:16
2.6 Environmental, social and governance (ESG) reporting
2.6.1 ESG reporting
In its report Corporate Reporting in Australia,26
the
Australian Council for Superannuation Investors
says that reporting is not the equivalent to managing
or mitigating the risks. With 90% of the ASX200
companies now providing some level of reporting on
sustainability in 2015, the next horizon of competition is
demonstration that they can more effectively deal with
reducing financial risk and commercial risk through their
sustainability agenda.
The concept of sustainable reporting was borne in the
early 1990s as a way for organisations to transparently
communicate their risks to build trust that they were
progressing to resolve their issues.
Today, the issues of a company aren’t simply contained
to its own company and product/services boundaries.
The risks they need to manage include the risks of the
supply chain that they are within. When Australian
fisheries company Austral moved to produce the world’s
first carbon neutral fish product they offset the carbon
in its entire supply chain. Taking responsibility in this
way to build its social licence also paid off commercially
for the company with the entire investment returning an
outcome within 2 months. It’s a dream run for return on
investment and highlights the importance of assessing
materiality in the supply chain.
The third horizon for sustainable development (see
diagram27
) is already emerging now with the greatest
number of consumers expecting sustainability than
ever before. The requirement is for multi-stakeholder
initiatives to solve significant sustainable development
problems through partnerships. The value of the
integrated strategy moves companies to solve problems
in ways that drive results and as such will create the
types of innovation that can manage and mitigate
problems that not one organisation “owns”.
Companies that move towards these types of solutions
will find integrated strategy that improves their ability to
deliver on the UN’s sustainable development goals and
targets as well as protect their commercial interests in
the long-term. Examples of this are currently occurring
in the deforestation arena where competing concepts
are being resolved by companies such as Unilever and
BASF who are forming partnerships with smallholders,
aid agencies and NGOs to protect forests and secure the
long-term supply of palm oil.
Katherine Teh-White, Founder, Futureye
26
Australian Council for Superannuation Investors, Corporate reporting in Australia: Progress in disclosure of sustainability risk among S&P/ASX200 companies, June 2016,
https://acsi.org.au/images/2016SustainabilityReportFINALweb.pdf
27
Futureye, The age of the curve hugger: Why society expects sustainable innovation from your business now, 2015, p 27, http://futureye.com/publications/
FIRST
HORIZAN:
Shareholder
Primacy
SECOND
HORIZAN:
Materiality
THIRD
HORIZAN:
Sustainable
Development
Innovation
NUMBER ENGAGED
IN SUSTAINABILITY
TYPES OF
SUSTAINABLE
ACTIVITY:
Compliance Reporting Efficiency Social
Licence
Integrated
Strategy
Company
Products and
services
Supply
Chain
Global Partners
and Conditions
DRIVEN BY:
Legislation
Standards
(Regulatory Risk)
Monitoring
Changed and
Information
(Image Risk)
Incremental
Improvement
and Cost
Savings
(Financial Risk)
Societal
Expectations
(Commercial
Risk)
Increased Speed
of Change and
Need for
Continuous
Innovation
(Global ‘Fit’ and
Sovereign Risk)
Past
Present
Future
PROBLEM
FRAME
TIM
E
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31ESSENTIAL DIRECTOR UPDATE:16
2.7 Directors’ liability
2.7.1 Insolvent trading reforms
On 7 December 2015, the government announced
insolvency law reforms aimed at encouraging
entrepreneurship and innovation.28
The reforms broadly
reflected Recommendations 12.1, 14.2 and 14.5 made
by the Productivity Commission in its Business Set-Up,
Transfer and Closure inquiry report.29
The government
has recognised that
“[o]ur current insolvency laws put too much focus
on penalising and stigmatising the failures”,
to the detriment of startups and corporate recoveries.
The risks of inadvertent insolvent trading are often
cited as a reason early stage investors and professional
directors are reluctant to become involved in
startups.30
And fear of personal liability arising from
restructuring a financially distressed company can lead
to unnecessary or premature invocation of insolvency
processes, with the negative consequences of job loss,
contract terminations, goodwill destruction and overall
value diminution.
In responding to the government’s consultation31
on
the reforms, the AICD supported the introduction of an
insolvent trading safe harbour that would:
• protect directors who take reasonable steps to rehabilitate
ailing businesses outside of formal insolvency processes
while taking into account the interests of creditors;
• place the onus of proof on the person alleging that
directors have breached the duty to prevent insolvent
trading; and
• be sufficiently flexible to apply to all directors irrespective
of a company’s size, industry, sector and circumstances.32
Additionally, the AICD welcomed the government’s
proposal to prohibit the operation of ipso facto clauses
which terminate or amend agreements during formal
insolvency processes (subject to certain exceptions and
appeal rights). This reform would allow companies in
voluntary administration to preserve key contracts and
so trade on, without affecting creditors’ rights should the
company breach any contractual obligations.
The AICD will continue to engage on these important
reforms as they are formalised. Legislation is expected in
mid-2017.
Lysarne Pelling, Senior Policy Adviser Advocacy, AICD
28
See National Innovation and Science Agenda - Report, www.innovation.gov.au.
29
Australian Government Productivity Commission, Business Set-up, Transfer and Closure, Productivity Commission Inquiry Report, No. 75, 30 September 2015, http://
www.pc.gov.au/inquiries/completed/business/report
30
See National Innovation and Science Agenda - Report, www.innovation.gov.au.
31
Australian Government National Innovation and Science Agenda, Improving bankruptcy and insolvency laws, proposals paper, April 2016, http://www.treasury.gov.au/
ConsultationsandReviews/Consultations/2016/Improving-bankruptcy-and-insolvency-laws
32
AICD policy submission, Improving bankruptcy and insolvency laws, 27 May 2016, http://www.companydirectors.com.au/director-resource-centre/policy-on-director-
issues/policy-submissions/2016/improving-bankruptcy-and-insolvency-laws
“The risks of inadvertent
insolvent trading are often
cited as a reason early stage
investors and professional
directors are reluctant
to become involved in
startups.”
32. companydirectors.com.au
32ESSENTIAL DIRECTOR UPDATE:16ESSENTIAL DIRECTOR UPDATE:16
2.8 Enhanced auditor reporting
2.8.1 Enhanced auditor reporting
The Australian Auditing and Assurance Standards Board
(AUASB) has amended the Australian Auditing Standards
to provide an enhanced audit report. The enhanced audit
report will increase the public’s confidence in both the
audit process and the company financial statements by
providing investors with:
• greater transparency about auditor responsibilities; and
• insights into key audit matters (KAMs) and how the
auditor deals with those areas.
KAMs are defined in ASA 701 Communicating Key Audit
Matters in the Independent Auditor’s Report to be:
“...those matters that, in the auditor’s professional
judgement, were of most significance in the
audit of the financial report in the current
period. Key audit matters are selected from
matters communicated with those charged with
governance.”
Whilst the enhanced audit report applies to all
entities, KAMs are only required for listed entities.
Audit committee members of listed entities will likely
be interacting with the auditor more, discussing the
expanded audit report prior to its release. A key concern
for the audit committee is whether the auditor provides
original information about the company in the audit
report. This concern can be addressed by engaging in
open and early communication with the auditor and
considering whether additional disclosures are required
within the financial report of these matters.
• Other changes that apply to non-listed entities, including
private entities, include:
• more prominent placement of the audit opinion towards
the front of the report;
• new descriptions of responsibilities relating to going
concern in both the management responsibilities area and
the auditor’s responsibilities area;
• enhanced reporting where a material uncertainty relates
to going concern exists;
• identification of those charged with governance within
the management responsibilities area of the report who
is responsible for the oversight of the financial reporting
process;
• revised auditor reporting for other information issued
in conjunction with the financial report (such as the
annual report), including the identification of such other
information; and
• an expanded description of auditor’s responsibilities
including key features of the audit.
These changes are applicable to financial reports for
periods ending on or after 15 December 2016.
Kerry Hicks, Senior Policy Adviser Advocacy, AICD
“A key concern for the audit
committee is whether the
auditor provides original
information about the
company in the audit
report.”
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33ESSENTIAL DIRECTOR UPDATE:16
3.0 THE REGULATORY ENVIRONMENT
3.1 Australian Securities and Investments Commission (ASIC) update
3.1.1 ASIC’s Innovation Hub – recent progress
Whilst innovation is not new, the current speed and
magnitude of change underpinned by technology is
unprecedented. Across the financial sector, there has
been an explosion in the number of financial technology
(fintech) startup businesses seeking to disrupt the
status quo by providing new products and services to
consumers, or finding new ways to deliver existing ones.
ASIC’s Innovation Hub33
was established in April 2015 to
engage with and help fintech businesses to navigate the
regulatory framework, reduce red tape and work more
closely with industry. Since then it has worked with over
100 entities and granted 16 new licences to businesses
within the Australian fintech sector.
ASIC has established relationships with international
regulators in the Europe, Asia, and North America, to
discuss innovation developments and policy proposals.
They have signed world-first co-operation agreements
with both the UK’s Financial Conduct Authority (FCA)
and Singapore’s Monetary Authority of Singapore (MAS),
and continue looking to enter more agreements of this
nature with other regulators in the near future.
These agreements create a referral process for innovative
fintech businesses looking to scale abroad to the FCA and
MAS. Referred businesses will have access to a dedicated
team to help them understand how the regulatory
framework of each respective jurisdiction applies to
their business, in addition to support throughout any
prospective authorisation processes. This is invaluable
support to any fintech business looking to expand into
new markets with unique regulatory frameworks.
ASIC is also looking at establishing a ‘regulatory sandbox’
for fintechs. This is an environment where financial
products can be tested before normal compliance
obligations apply. In June 2016, a consultation paper was
issued that proposes options for a regulatory sandbox.
The final report is due to be issued by the end of 2016.
John Price, ASIC Commissioner
33
See http://www.asic.gov.au/for-business/your-business/innovation-hub/
“ASIC is also looking at
establishing a ‘regulatory
sandbox’ for fintechs. This
is an environment where
financial products can
be tested before normal
compliance obligations
apply.”
34. companydirectors.com.au
34ESSENTIAL DIRECTOR UPDATE:16ESSENTIAL DIRECTOR UPDATE:16
3.2 Australian Competition and Consumer Commission (ACCC) update
3.2.1 ACCC Update
Mergers:
The Australian Competition and Consumer Commission
(ACCC) has dealt with several complex merger assessments
in the last year, with only very few mergers opposed and
some significant mergers approved.
Its timetable for clearance of complex mergers appears to
practitioners to have become a little less flexible than in
the past. ACCC coordination with overseas counterparts
as part of its assessment of any international merger has
become routine.
Cartels:
The ACCC continues to actively investigate and prosecute
cartels. For example, in June 2016 the ACCC commenced
proceedings alleging a cartel among wholesalers of
polycarbonate roof sheeting commonly used in commercial
and home building projects. On 18 July 2016, global
shipping company Nippon Yusen Kabushiki Kaisha (NYK)
pleaded guilty to the first criminal charge laid against a
corporation under the cartel provisions of the Competition
and Consumer Act 2010 (Cth). As yet there have been no
contested criminal cartel prosecutions.
The Federal Court dismissed the ACCC’s case against the
Australian egg industry association in February 2016.
The Court found that while the ACCC had established that
the respondents intended that egg producers should take
action to address and ‘correct’ an oversupply of eggs, it
did not establish that this was intended to be pursuant
to an agreement or understanding involving reciprocal
obligations by competing producers. The ACCC has
appealed this decision.
Important questions remain to be resolved by the High
Court about the application of cartel laws to dealings
between principals and their distribution agents. An initial
Federal Court decision regarding an alleged attempted
cartel involving Flight Centre and various airlines caused
a lot of confusion among businesses involved in the sale
and distribution of a range of products such as travel,
accommodation and financial services. That decision cast
doubt on the demands a supplier could lawfully make of its
distributors and vice versa. The Full Federal Court on appeal
removed the confusion, finding that Flight Centre acted as
agent for the airlines and was not relevantly a competitor.
That decision was granted special leave to appeal to the
High Court and a final decision is expected in late 2016.
Misuse of market power:
In 2015, the Federal Court dismissed the ACCC’s
proceedings against Pfizer Australia Pty Ltd for alleged
misuse of market power and exclusive dealing in the
supply of a generic cholesterol-lowering pharmaceutical
to pharmacies. The case is the first time that the ACCC has
challenged in court a distribution strategy embarked on
by a pharmaceutical patent holder immediately prior to
expiry of its exclusive rights. The Court found that Pfizer
did not have the requisite substantial market power at
the relevant time and at no time engaged in conduct for a
prescribed prohibited purpose. The appeal is likely to be
decided in 2016.
Paul Schoff, Head of MinterEllison’s Australasian
Competition and Regulatory Group and Head of
MinterEllison’s Cartels Unit.
Unfair Contract Terms:
Many small firms entering into agreements with larger
businesses have no option but to accept all the terms of
standard form contracts. New laws coming into force on 12
November 2016 will allow the courts to strike out unfair
contract terms.
35. companydirectors.com.au
35ESSENTIAL DIRECTOR UPDATE:16
The protections apply where at least one party to the
contract employs less than 20 people, and the price
payable under the contract is no more than $300,000, or
$1 million if the contract is for more than 12 months. (The
law doesn’t apply to terms setting the price payable under
a contract). A term may be unfair if it causes significant
imbalance, is not necessary to protect the legitimate
interests of the party advantaged by the term, and would
cause harm to the other party if it were relied on.
An example of an unfair term might be an agreement
for telecommunication or advertising services where one
party, but not the other, is allowed to unilaterally change
or cancel the contract.
If the court finds a term unfair, that particular term will
be void and treated as if it never existed. The rest of the
contract will remain in effect to the extent it is capable of
operating without the unfair term.34
ACCC Deputy Chair Dr Michael Schaper said:
“For every business that deals with small
businesses, now is the time to check that your
contracts are compliant…the new protections
will help address significant imbalances or
disadvantages to small businesses in their dealings
with other businesses by allowing the courts to
declare void unfair terms within standard form
contracts.”
Review of the Australian Consumer Law:
The first review of the Australian Consumer Law is under
way and there are many issues on table of interest to
company directors.
The law provides businesses with both rights and
obligations and covers what you can and can’t say in your
advertising, how you deal with customers as well as things
like product safety.
The review will test whether the law suits the modern
marketplace and whether the tools and sanctions are
delivering compliance. For example, one of the burning
questions for the review is whether the maximum
available penalty of $1.1 million is enough to deter larger
firms from breaking the law.
Dealing with ‘phoenix’ companies is another live issue.
A company shuts down, often harming consumers and
suppliers in the process, only to start-up again under a
different business name while avoiding the liabilities of
the old company. The review is seeking views on whether
the law can better deal with these types of situations.
At present, unconscionable conduct protections (s 21)
don’t apply to public companies.
Unconscionable conduct is the term for particularly harsh
or oppressive behaviour that goes against conscience as
judged against business and social norms and standards.
The fact a company is publicly-listed is not always a good
reflection of its size, level of resourcing or its ability to
withstand unconscionable conduct. The review is asking
whether the ACL needs to be extended to cover publicly-
listed companies.
ACCC Chair Rod Sims said:
“The ACL review gives us a chance both to reaffirm
the benefits of what we have, and to make the
law even better.”
Consumer Affairs Australia and New Zealand are
conducting the review with a final report expected in
March 2017.35
Dr Michael Schaper, ACCC Deputy Chair and Member of
the ACT AICD Council.
34
See http://www.accc.gov.au/business/business-rights-protections/unfair-contract-terms, and https://www.youtube.com/watch?v=0b9vZIgn7ow
35
See http://consumerlaw.gov.au/review-of-the-australian-consumer-law/about-the-review/
36. companydirectors.com.au
36ESSENTIAL DIRECTOR UPDATE:16ESSENTIAL DIRECTOR UPDATE:16
3.3 Australian Prudential Regulation Authority (APRA) update
3.3.1 Bank and insurer risk management
CPS 220 has entered the lexicon of the directors of our
banks and insurers. Mention the code in a board room
and there will be knowing nods. That is extraordinary.
Codes for prudential standards are not normally top of
mind for directors.
Risk management is important for any business but
it is particularly important for banks and insurance
companies because they make financial promises to the
community, and a sound and stable economy depends
on those promises being met. This is the fundamental
rationale for why these institutions, in Australia, are
regulated by the Australian Prudential Regulation
Authority (APRA).
Prudential regulators pay particular attention to capital
levels (a buffer when things go wrong), risk management
(helps avoid things going wrong) and governance (to
make sure capital and risk are managed well).
In 2015, APRA introduced a prudential standard on risk
management – CPS 220. Much of this was not new, but in
banking’s case it was the first standard dedicated to risk
management. It also introduced some new requirements.
Of particular note is that the board must ‘form a
view’ on the risk culture and how well it supports the
risk appetite, identify areas for change, and ensure
something is done to effect that change. Boards are
grappling with how best to tackle this, and both thinking
and good practice are evolving. At the very least the
board should address this issue systematically, and
ensure it does indeed form and record its view of risk
culture, and not just assume directors have a consistent
collective view.
CPS 220 has a number of concepts intended to give
structure to risk management. Directors may find it
helpful to approach it systematically, for example:
• Understand the main requirements and how they work
together, in particular those covering the risk management
framework, the risk management strategy, risk appetite
and risk culture.
• Understand the specific responsibilities of the board.
• Be satisfied that there is a systematic approach in place to
properly address all of the requirements, with competent
people and good processes supporting the board.
• Do not look on this as a compliance exercise, and instead
use CPS 220 as a framework for good risk management
practice that will add real value to the business.
Ian Laughlin, Chairman of OnePath life, OnePath general
and ANZ lenders mortgage insurance companies, and
chair of the advisory board of Blackhall and Pearl.
“Risk management is
important for any business
but it is particularly
important for banks and
insurance companies
because they make
financial promises to the
community...”
37. companydirectors.com.au
37ESSENTIAL DIRECTOR UPDATE:16
3.4 Financial reporting update
3.4.1 Financial reporting update
Australian Securities and Investments Commission:
The Australian Securities and Investments Commission
(ASIC) has issued its focus areas for 30 June 2016
financial reports (16/174MR) as follows:
• accounting policy choices;
• key disclosures;
• accounting estimates (impairment testing and asset
values).
Whilst ASIC targets listed and other public interest
entities, they also review proprietary and unlisted
public companies on a reactive basis from complaints
and other intelligence.
In the update, ASIC acknowledges that directors are
not required to be accounting experts. However, they
remind directors to seek explanations, involve experts
where appropriate and to challenge asset values in the
financial report.
In addition, on July 25 2016, ASIC released a
consultation paper about it directly communicating
specific financial reporting and audit findings identified
from ASIC reviews of external audit files to directors,
audit committees or senior managers of companies,
responsible entities or disclosing entities.
Australian Accounting Standards Board:
The Australian Accounting Standards Board (AASB) has
issued a number of accounting standard updates, the
most significant being:
• AASB 15 Revenue from Contracts with Customers,
applicable for financial years commencing on or after 1
January 2018;
• AASB 9 Financial Instruments, applicable for financial
years commencing on or after 1 January 2018;
• AASB 16 Leases, applicable for financial years
commencing on or after 1 January 2019.
AASB 15 Revenue from Contracts with Customers
provides a new framework for recognising, measuring
and disclosing revenue following a five step approach.
The revised standard is expected to have varying impacts
across organisations and industries. Some organisations,
mainly telecommunications, will require substantial
changes to financial systems and processes, whereas
many others will benefit from simpler implementation.
These impacts could extend to systems outside of finance
such as bonus schemes, commissions, etc.
As some revenue contracts can extend over multiple
years and the comparative period for the standard
commences in 2017, it is timely now for directors
to consider questioning management on their
implementation plan for this standard.
AASB 9 Financial Instruments introduces a new hedge
accounting model, an expected loss impairment model and
changes to classifying and measuring financial assets.
“...they remind directors to
seek explanations, involve
experts where appropriate
and to challenge asset
values in the financial
report.”
38. companydirectors.com.au
38ESSENTIAL DIRECTOR UPDATE:16ESSENTIAL DIRECTOR UPDATE:16
The impact of the standard will differ, depending on the
industry and the degree to which it has adopted and/
or intends to adopt hedge accounting practices. Some
entities may have early adopted various part of this
standard, to take advantages of some of the changes the
standards bring.
An understanding of the full impact of this standard
should be undertaken by management, and directors
should consider the impact as well as risks and
opportunities that may be presented.
AASB 16 Leases will significantly impact lessees
and have minimal impact for lessors. It results in the
recognition of almost all leases on the balance sheet,
removing the distinction between operating and finance
leases. Therefore, it will impact financial ratios and debt
covenants. In addition, the timing of expense recognition
will be impacted, with expenses typically higher in the
earlier years of the lease.
Any current lease negotiations should consider the
impact of this standard, and directors should consider
questioning management about the impact on existing
lease arrangements, given that leases usually span a
number of years.
Australian Tax Office (ATO):
For financial years commencing on or after 1 July
2016, global entities, with annual global revenue
over $1 billion (or with a parent with revenues of this
magnitude) will be required to lodge to the ATO, who will
forward them to ASIC, general purpose financial reports
with their annual tax assessments. This amendment
was passed by Parliament in 2015 and the details are
contained in the Tax Laws Amendment (Combating
Multinational Tax Avoidance) Act 2015.
This will have a significant impact on entities that
previously lodged special purpose financial reports, as
more accounting standards need to be adopted when
preparing general purpose financial reports. However,
for most taxpayers the ATO does not anticipate that
lodgement of these financial reports will be required
until early 2018. Prior to this, the administration
arrangements need to be determined and these will be
consulted on in due course.
Kerry Hicks, Senior Policy Adviser Advocacy, AICD