Future of the Board report by the Governance Institute of Australia

On 3 November 2021, the Governance Institute of Australia released its “Future of the Board” report. The report provides a roadmap for current and aspiring directors to better understand the challenges boards of the future are likely to face, the future issues that need to be on directors’ radars now, as well as the skills and attributes board members will need to possess to face these future matters. 

The report surveyed 550 Non-Executive Directors, CEOs and Executives as well as a working group of senior directors and industry leaders to gauge viewpoints on these future challenges. With the ongoing impact of the COVID-19 pandemic as well as the growing movement towards Net Zero Emissions, boards and their members have never been more under the microscope of stakeholders in monitoring how they manage these matters – and the scrutiny expected to increase in the coming years.

A snapshot of the key findings from the report include:

• Boards will need to manage competing internal and external challenges.
  • The long-term sustainability of the business will be the number one internal priority.
  • The major external challenges will be managing Climate Change, the fallout from COVID-19, economic instability, technology disruption and cybersecurity risk.
• ESG will dominate board discussions. 89% of participants responded that boards will need to align their purpose with community values. Social license to operate will be the number one ethical (or conduct culture) challenge for board directors in 2025.
• Strategy will play a central role with expertise in strategy and strategic thinking being key requirements for future board members.
• Boards will be increasingly held accountable and responsible by stakeholders for managing these future challenges. 92% of survey respondents agreed that board accountability and responsibility will increase, and 66% agreeing strongly.
• Boards will have to increase their risk appetite to take on the various internal and external challenges.
• Given the above, director over boarding and tenure will be increasingly scrutinised. 71% agreed that there should be restrictions on how many boards a director can sit on, with 54% saying the limit should be three to four boards. 84% also agreed that there should be a limit on the length of time a board member can serve for, with 36% saying the limit should be size to nine years and 23% saying it should be 10 years.

To read the full report, please click here.