Governance Corner

• Artificial Intelligence and the impact this will have on organisations

This doesn’t have to be complex, rather an organisation should investigate the benefits as well as pitfalls of artificial intelligence. Understanding your capabilities and restraints within an organisation before committing to a particular pathway is the key. Also it is critical to consider the social implications of potential job losses. Don’t discard the element of human expertise.

• Cyber Risk and exposure still continues to be a key area of concern for boards for both large and small organisations

Cyber security risk management generally sits with the board. There is some excellent information that can be accessed through the Australian Signal Directorate (https://www.cyber.gov.au/). A breach alone is not a disaster, but the way you manage it could well be. It is recommended that organisations have simulation exercises to help prepare for a possible issue.

• Building Culture

You may have heard it before, but culture comes from the top. The values and attitudes of the board tend to dictate what type of culture the organisation has. Some of the suggested tools to help asses an organisation’s culture are:

• • More Staff Surveys
  • Training and awareness for staff in understanding the organisation’s values
  • Reward people displaying positive culture
  • Training on positive culture and expectations.

Our foundational pieces, Growing Deep and Free to Flourish are a great resource and guide to developing a positive culture.

• CEO Performance and Succession Planning

Some of the things to consider are:

• • The relationship between the board and Principal/Director
  • Always be prepared for the potential departure of a key executive
  • Ongoing succession planning is important (the average tenure of a CEO is 5 years)

• Financial Resilience

Australia has seen the highest number of corporate insolvencies in the past year.

At LESNW we have a great resource with our financial team and the work they do to ensure that the whole system is strong and resilient.

It’s important that boards have a sound understanding of financial reporting. There are some great resources through the AICD that can help. I am also sure that there are people within our family network that would be willing to share their expertise as well.