The price of boardroom freedom is eternal upskilling

Rigotti believes the solution to this is developing a culture at organisations where new issues around governance, risk and liability are quickly turned into good corporate habits. This then releases directors from the draining task of fashioning new responses to similar sets of problems.

The need to upskill boards is now constant.

“In terms of governance and liability, it’s not a case of one in and one out,” he says. “Boards are having to deal with layers of compliance, so it’s one plus one plus one plus one.”

The first step in preparing directors is making sure that boards have all the access they need to quality education, professional support and the very best in thought leadership.

Consultants, who can run board sessions, can be a critical aid in this.

AICD’s in-house education offerings are another way that boards are upskilling and professionalising the role of the director.

“We have a full suite of director and board diagnostics which provides an opportunity to not only learn about best practice but benchmark performance against industry standards,” says Rigotti. “Boards are coming to us to seek our assistance on a full range of governance issues which we provide through our flagship Company Director Course.”

This education is contextualised for all types of boards from standard companies to not-for-profits, providing valuable insights into everything from governance for vulnerable people to the imperatives of cyber, transition to net zero and even AI.

“AI has become another thing which energises and terrifies all at the same time,” Rigotti says. “Cybersecurity, too, is the number one thing in our latest director sentiment index that keeps directors up at night.

“There’s almost an acceptance that it’s not if it’s going to happen, but when it’s going to happen, and will directors be able to fend it off when it does.”

Louise Petschler, general manager, education and policy leadership at AICD says the role of directors is shifting in response to new reporting standards and stakeholder expectations.

“It’s not one size fits all, it’s constantly evolving,” Petschler says. “And it’s something each board and each director has to be finely attuned to. Directors really have to step up in this environment and skill themselves to meet the task and fulfil their obligations.”

In terms of environment, social and governance (ESG) the field is expanding such that non-financial risks are always high on the radar.

“Take climate disclosures for example. The mandatory climate reporting regime that will take effect on July 1 next year has been described by ASIC as the biggest change to corporate reporting in a generation.”

This means that directors today must be as climate literate as they are financially literate.

“The compliance and reporting responsibilities are so much more for directors than their fiduciary duties, and it can seem overwhelming,” she says. “Our job is to make it manageable and attainable by providing directors with the frameworks, skills and knowledge to help navigate this difficult terrain.”

In response, the AICD plans to release a climate literacy e-learning program and a new short course specifically on climate governance in the new year.

The not-for-profit Women in Technology is one organisation that has tapped AICD’s Board Advance program to raise the skills of a board dedicated to advancing women through the tech sector.

“The Purpose of Women in Technology is to unlock the potential of Women in STEM (science, technology, engineering and mathematics). A key mechanism for doing this is to provide the skills, confidence and networks for career success,” says director Kelly Wilkes.

“It’s imperative that we integrate a best-in-class learning to support this goal - the integration of AICD modules are a critical part of this process.”

Ultimately, freeing up boards to concentrate on their core competencies is at the heart of what has to be a constant process of upskilling, says Rigotti.

“Cyber would be one of those things that needs constant attention,” he says. “Climate and climate reporting is another thing. What’ll be next? Probably nature-based accounting.

“These are big shifts: this is upskilling that takes years, not weeks.”

To learn more, visit www.aicd.com.au.