Increased regulatory scrutiny, business complexity and technological disruption will define governance practice for the foreseeable future. And the digital skills and ethical mindset of millennials will mean they will be more sought after for board positions.
Do your leaders have what they need to succeed by 2025? A new study from the Governance Institute of Australia suggests the role of the governance professional is likely to undergo numerous changes and will require a broader skill set in the next five years.
The study consisted of three parts: 11 initial interviews, an online survey which collected answers from 285 respondents and a roundtable attended by 10 governance experts.
Participants across each part of the study tended to agree that change is in the air. Indeed, 83 per cent of online respondents expect their roles to change either ‘significantly’ or ‘somewhat’ by 2025.
Download the free report: The future of the governance professional, sponsored by Diligent and LexisNexis.
What does the future hold?
New technologies, the faster pace of change and increased complexities were some of the biggest shifts participants saw for the future of the profession. Change is expected to be influenced by a range of factors, including increased scrutiny from a wider range of stakeholders and the fact that social media gives every stakeholder a voice.
Study participants saw customers and culture becoming a more significant focus for boards — after all, the key message from the banking royal commission was that organisations need to foster a culture that prioritises customers over profits.
They added that stakeholders are increasingly likely to boost their scrutiny of organisations’ non-financial metrics, such as diversity, sustainability, and culture – which creates more pressures for boards.
Added to this, regulatory change, again driven by the Hayne royal commission, is expected to intensify. This was the view across the study and held by 80 per cent of online respondents, who said implementing regulatory reform was an important or the most important challenge they face.
Opportunity for millennials
There will be more millennials on boards, and they are likely to place greater emphasis on ethics and social good than on ensuring risk systems and structures are in place. They will also potentially be less rigid in their understanding and style, and keener to push the envelope.
With a growing focus on new technology, culture and ethics, millennials’ digital skillset and ethical mindset will mean they will be in demand at all levels of the organisation.
How prepared are your governance professionals?
Only 30 per cent of online respondents felt prepared or well prepared to face the governance challenges of 2025.
According to the report, governance professionals will still need to have a solid understanding of financial, legal and IT issues, but will also require a greater range of soft skills. These included:
- Great judgement.
- Curiosity and the ability to think outside the square.
- Good communication, collaboration and negotiation skills as well as the emotional intelligence to understand human behaviour and boardroom dynamics.
- The ability to liaise at all levels of the organisation, with all types of stakeholders, and be fair and stay neutral in disputes.
- The capability to run ‘common sense’ checks over sophisticated datasets and ensure they are correct — not just relying on machines or assistants to do so.
- A grasp of the mechanisms needed to reshape the organisation’s culture.
Future-proof your teams with further study
The Governance Institute just launched a new strategically-focused course — the Graduate Diploma of Applied Corporate Governance and Risk Management.
Graduates gain an internationally-recognised designation — Chartered Secretary or Chartered Governance Professional — as well the nationally-accredited qualification demonstrating their specialist skills and in governance and risk management.