Governance Challenges in the Pandemic Era

By Martin Matthews, Martin Matthews
Partner
19 August 2021

How can an organisation monitor, assess and then reward its alignment with culture? This is certainly not easy and requires effort and out of the box thinking, but is critical to ascertain the true health of an organisation.

The most recent Governance & Risk Management Forum held by the Governance Institute of Australia saw professionals all over the nation come together to discuss business risks in the pandemic world.

I was fortunate enough to open the Sydney Forum by interviewing Ms Ann Sherry AO, current Non-Executive Director of National Australia Bank.

What became clear from Ann’s address is that many of the previously well-regarded governance practices like the development of five-year strategic plans have become outdated in the pandemic era. Strategies need to be sufficiently nimble to accommodate rapidly changing environments, and strategy check-ins need to become a more regular part of every meeting agenda to ensure relevancy.

Changing consumer behaviours have contributed to the long-term impact on the travel and hospitality industry and as we become less social in lockdown periods this effects our post-lockdown behaviour.

How Australia is able to respond cohesively to this changing dynamic, especially for international visitors, will be a challenge to pre-existing providers.

What works for companies yesterday has no guarantee of working today or even tomorrow in the pandemic era. Expectations of Director and Board compositions have shifted to the likes of the three C’s: curiosity, courage and compassion. What was once purely based on skill diversity sees these above traits being most favourable for those in these leadership positions.

For many companies, ensuring their staff act appropriately and in alignment with their values and ethics is one of the greatest business risks. Are business leaders considering that if all they are hearing is good news stories, it is most likely they aren’t getting the full picture? Is there a tendency for Directors and Senior Management to hear what they want to hear, as opposed to having a proper look under the bonnet and getting the real story from their team and customers?

Monitoring culture effectiveness in an organisation, is arguably one of the most critical ways in measuring its sustainability yet, this area is often not rewarded and often does not form part of its remuneration structure.

Evidently, the direct link between good governance and business sustainability – in the pandemic era and the application of “fit for purpose” governance practices provides Directors and Senior Management with a clear understanding of the current business state and their focus’ for the future.

PKF were proud to sponsor the event that provided valuable insights for business owners and the accounting profession.

Credit to the Institute as the Forum’s content was excellent, and it was refreshing to have delegates in a room again in every Capital City. The conference was also delivered online for those unable to make it.