The landscape for corporate directors is shifting dramatically. KPMG Australia's in-depth survey of over 120 non-executive directors across a range of sectors, reveals the pressing issues faced by boards.
The insights shared in this report reveal a genuine passion among directors to contribute meaningfully to their organisations. Yet, as business conditions become more volatile and uncertain, questions are being raised – will the emerging and competing demands require changes to director roles, pathways, compensation and consultative processes?
Download the report to access insights from our one-on-one interviews with some of the country's most accomplished directors, and their thoughts on how today’s challenges can be best addressed as boards adapt for a new future.
The future board agenda
Three key areas shaping the evolution of boards today.
Boards must adapt to thrive amid heightened regulatory scrutiny, changing stakeholder expectations, and the blending of social issues with corporate governance. Directors we spoke to floated the idea of exploring new governance models, which may include separating management and supervisory functions to ensure clarity in roles, amidst growing demands for accountability and transparency.
"There is a social value consideration in all the approvals. Does it require more work? Yes. But it probably leads to better decisions as a result. You will often have conflicts balancing the demands and the needs of all of those stakeholders, but we just have to find a way to navigate through that."
Michelle Hinchliffe
Non-Executive Director
BHP Group Ltd, Macquarie Group Ltd, Santander UK Group
The increasing complexity of risks and emerging technologies, including AI, necessitates boards to introduce further diversity in expertise while maintaining board cohesion. Succession planning and external advisory channels are key to keeping boardroom skillsets and knowledge relevant and sufficiently comprehensive. AI also introduces opportunities to assist directors in more quickly and better understanding complex information, enhancing data-informed strategic decision-making.
"The most important reason that we’re sitting around that table is we’re bringing our judgement. It’s judgement brought from our own experiences, training, and perspectives. It’s the conversation amongst us, to get to the right decision, that can never be relegated to AI or technology."
Dr Nora Scheinkestel
Non-Executive Director
Qantas Airways, Origin Energy, Westpac Banking Group, Brambles Ltd
Directors are facing intensifying workloads and scrutiny, prompting a re-evaluation of their board commitments and the effectiveness of current remuneration. Experience on large corporate boards is valuable, but there is also a need for new thinking, diverse backgrounds and potentially revised compensation models to attract the range of future-skilled talent required to manage emerging organisational challenges.
"While I think there is a certain amount of experience and gravitas to be an effective NED in a large enterprise, I don’t subscribe to the view that if you have not been a CEO, you’re not relevant, because I think that limits diversity too much."
Diane Smith-Gander AO
Chairman
Perenti, HBF Health Ltd, Zip Co, CEDA
Key questions for boards
Based on the findings in our report – Exploring the evolving role of the board – these questions are designed to support directors in their boardroom conversations as they prepare for the challenges of the next decade and beyond.
- As boards increasingly balance shareholder interests with broader stakeholder and societal demands, will this shift in priorities affect the availability and terms of capital, and how should this be brought into consideration regarding social licence to operate?
- As societal and environmental pressures mount, could boards be compelled to take a stronger stance on social issues, or should focus be pivoted to core business objectives and obligations to shareholders first and foremost?
- Will directors need to be conservative about how many boards they sit on to enable ‘surge capacity’ when needed or can mechanisms be eveloped to enable greater use of alternates/substitutes to cover directors pulled away to focus on burning issues with other boards they sit on?
- With increasing demands for diversity beyond gender, will boards find it harder to balance broad skillsets with the need for specialised expertise in areas like AI?
- Will the continued scrutiny from the media and society drive boards to consider alternative governance models that further delineate the role of executive and steward?
- Will AI and automation revolutionise governance processes by enhancing efficiency, or will the human oversight needed for ethical decision-making limit the true potential of these technologies?
- As boards seek to diversify their composition, will offering more flexible remuneration models and development opportunities help attract top talent from executive roles earlier?
- Will the growing appeal of private, less regulated boards cause a talent drain from listed boards, requiring value propositions to be reconsidered?
Get in touch
Caron Sugars
Partner, Governance, Risk & Controls Advisory and Board Advisory Services
KPMG Australia
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- Connor Rolston
