The Board’s role: creating value and balancing stakeholder needs
Boards: creating value, balancing needs
KPMG and AICD share findings of a survey of more than 600 directors after a challenging and disruptive year for corporate Australia, and where corporate governance has been under even greater public scrutiny.
Corporate conduct and trust have been in the spotlight over the past year. It is therefore positive that the responses from the survey indicate that people must be put first.
Key survey findings
- In the survey, in terms of prioritising stakeholders, customers and employees rated 8 out of 9 in terms of significance to the relevance and viability of the business. Investors, government and the local community were behind on 6/9.
- On identifying the critical issues impacting the organisation, customer satisfaction came top with 8/9 followed by employee satisfaction and internal culture/conduct – rather than financial outcomes.
- 30 percent of directors rated customer satisfaction as a key metric for measuring the organisation’s ability to deliver value.
- Top three responses on issues crucial to maintaining corporate reputation were: customer satisfaction, employee behaviour/conduct and governance and accountability.
- Looking ahead, respondents said they were most concerned about excessive regulation (this was particularly felt by directors of larger organisations, over 500m revenue) and director liability and accountability in the post-Hayne era.
- It is evident that the younger directors (those aged 18 – 34) are much more passionate about the potential impact of cyber security, innovation and disruption, digital transformation, cost competitiveness and the workforce of the future. It is also noteworthy that the nearest group to the younger directors were those aged 75 and over.
- Communicating and engaging with stakeholders openly was rated the key answer to building stakeholder engagement. Transparency of business practices and decision-making and maintaining social license to operate were the next most highly rated.
Across the Board
Across the Board is KPMG's newsletter focusing on the key issues facing Non-Executive Directors.
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