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.
Download the report to read more.
Board challenges and expectations
The future board agenda
Three key areas shaping the evolution of boards today.
1. The role of the board – adapting to thrive
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 provably 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
2. Cultivating agility - building new skillsets and expertise
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
3. Evolving directors' pathways, portfolios and compensation
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
Contact the team
Caron Sugars
Partner, Governance, Risk & Controls Advisory and Board Advisory Services
KPMG Australia
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