The article is a call for director accountability. It goes on to quote director board exchanges, learnings and the perceived lack of understanding of duties and failures. All adequately referenced to those who have regular interaction with boards and those “ASX listed company directors (that) receive very little attention outside the set piece annual general meetings that they are forced to endure once a year.”
Private companies are also accountable and should hold themselves to the same ethics and morals society demands. Two of the ‘big 4’ accountancy firms are held privately (PWC & EY), as is Dell, Mars and Aldi.
Here in lies the problem. The article only focuses on the 1%.
Directors of SME businesses know and experience a “totally different but exactly the same” world.
‘Different’ in that if they are a director of an international subsidiary, their input to the board and the decisions they make are limited – if non-existent.
‘Same’ in that the decisions made by their parent board will directly affect the stakeholders of their local business.
“…there is increasing pressure for company directors to move out of the shadows and into the disinfecting power of sunlight.”
Disinfecting….really? Yes accountability is key, but as a director of a SME – there is no need “to move out of the shadows and into the disinfecting power of sunlight” as the article obtusely suggests. These directors are the local figurehead and mouth piece of their organisation. To bundle all directors in this pigeon hole is both inaccurate and irresponsible.
However, the article does underpin what I have been preaching to all who want to listen: There is a huge void in support and understanding for the other 99% of directors who are not part of a publicly listed business. Arguably, the actual percentage of registered Australian directors that would fall under public scrutiny is 40%. (60% are sole traders) So, 39.3% ARE in the spotlight…. constantly. (source ABS 2016)
The article raises two valid observations.
1: Australian Directors should think long and hard about anydirectorship role they are offered. The risk far outweighs the reward….simple!
2: Those who aspire to a directorship and go on to attend classes on board preparation and interaction have invested (in the long term) wisely – but not strategically.
Like any leader, you must first learn the basics and then hone the skills. No one has ever gone from learning to kick a ball to the Premier League within just one season. The course mentioned in the article is excellent and I am a graduate of that investment; Essential if you work as a director in a publicly listed company.
However, as a SME leader, a large portion of the content is irrelevant to a novice or aspiring director. These courses are a masterclass for the 1% and as such the time and investment needed is reflected.
Institutions, newspapers and academics tend to over-complicate what is essentially a very basic need every leader has: The access to relevant and timely information.
It is inconceivable that a construction worker must undergo a mandatory full day induction just to walk onto a building site, yet a director can be thrust into potential financial and personal ruin with a cursory three item checklist from the government regulator.
In 2016, I discovered that 86% of novice directors commence their roles without any formalised training…*
A director must choose their own pathway to compliance. They also must be aware in which ‘league’ they are playing and ensure their coach knows their game first hand; the challenges they face; provides them the skills and resources and then supports them for ongoing, long-term success.