Not focused on your experienced workforce? You should be! Because experienced workers are largely ignored or misperceived in organisations’ strategic workforce plans, many businesses are failing to capitalise on their value.
Age-ready employers will:
Maximise operational effectiveness and capitalise on the value that workers with decades of experience can deliver
Ensure that they can tap into a larger pool of talent given that declining birth rates are triggering real labour shortages in developed geographies
Enable innovation and customer connectivity Increase knowledge-sharing and strengthen collaboration
Ensure fairness and inclusivity – avoiding litigation risks
Better align the workforce with future needs of the business
This week, the Australian government claimed it does not owe welfare recipients a duty of care over the RoboDebt scandal. Only weeks before, documents revealed that the government had received legal advice that debts issued under scheme were unlawful.
That is a lot to digest in one short paragraph, however, I
For perspective, in 2012, I was made a Managing Director of
a foreign owned Australian Subsidiary. I took my obligations seriously. VERY
seriously. The company performed high-risk work in a high-risk industry, and I
was soon to learn that should the proverbial hit the fan (as has happened with
the RoboDebt scheme) I would be personally responsible for any actions I took
or oversight that occurred under my tenure as a director.
Unlike the RoboDebt scheme, Minsters (Government Directors) are not accountable under the Corporation’s act as Corporate Directors are. However, they are “obliged” (more recommended) to adhere to the Statement of Ministerial Standards. (SoMS). The latest version of SoMS was signed by the Prime Minster in August 2018.
My position is clear. If you are entrusted with a leadership role, the buck stops with you. You must Endeavor to avail yourself of all information available to you to mitigate risk and execute your Duty of Care to your employees, customers, stakeholders and community. But what is meant by “Duty of Care”?
Duty Of Care
I probably took my obligations duty further than most. To be honest, it frightened the crap out of me, however, I had a passionate desire to understand how I could perform a lifelong carer ambition, whilst protecting those around me…without surrendering everything that I believed in and had worked for.
After barely graduating from a week long directors course and a further three weeks of study groups and in-depth research, I left the learning institute confused and with more questions than answers. Consequently, being “blessed” with an enquiring mind (a legacy from working 20 + years with engineers) and not the indoctrinated “she’ll be right” Australian version of accountability, I decided to gain further insight into this minefield called Corporate Governance. (CG)
I enrolled in and (barely again) completed a Graduate diploma in Corporate Governance and then a Master’s degree in Corporate Governance research. Before completing, I took the bold but responsible and now very informed move and resigned as Managing Director. Quite simply, the Reward was not worth the risk.
The risk lies in the Directors Duty of Care.
The Detail IS the devil
Of the Many Acts a director is bound to abide by and instil is the WHS Act 2011 – Summarising, if you engage contractors to fulfil work responsibilities, or have students on work experience, apprentices, volunteers etc….all are classified as a ‘worker’ and therefore, fall under the ultimate duty of care of the director – (WHS Act 2011, section 7).
Remember, High Risk Work, High Risk Industry…
Among the prescribed text I studied for the CG courses was “Corporate Governance Principles, Policies and Practices by Bob Tricker
Page 103 3 states “The duty of care requires directors to exercise independent judgement with care, skill, and diligence.”
In Australia, courts DEMAND a duty of care that is expected
of a person serving as a director. They recognise that duty of care should also
consider the knowledge, skill, and experience of that director.
Revisiting the government’s position, surely, a minister who is responsible for the Child Support Agency, Centrelink, Australian Hearing, CRS Australia and Medicare Australia would undertake his Duty of Care to “exercise independent judgement with care, skill, and diligence”, seriously?
It would seem not.
The Corporation Acts requires directors to follow the
Business Judgement Rule which in summary requires directors to make any
business judgment in good faith for a proper purpose; stay clear of conflicts
of interest, inform themselves about the subject matter and, importantly, believe
that the judgment is in the best interests of the corporation.
Just as a Managing Director is elected to serve a corporation by a board of their peers, so too a government is elected by its peers to serve its populace. Now, substitute the word “Corporation” with “people” from the last sentence in the last paragraph.
What our Laws & Standards state
Importantly, the 2018 Ministerial Standards states following:
1.3. In particular, in carrying out their duties:
(i) Ministers must ensure that they act with integrity –
that is, through the lawful and disinterested exercise of the statutory and
other powers available to their office, appropriate use of the resources
available to their office for public purposes, in a manner which is appropriate
to the responsibilities of the Minister.
(ii) Ministers must observe fairness in making official
decisions – that is, to act honestly and reasonably, with consultation as
appropriate to the matter at issue, taking proper account of the merits of the
matter, and giving due consideration to the rights and interests of the
persons involved, and the interests of Australia.
(iii) Ministers must accept accountability for the exercise
of the powers and functions of their office – that is, to ensure that their
conduct, representations and decisions as Ministers, and the conduct,
representations and decisions of those who act as their delegates or on their
behalf – are open to public scrutiny and explanation.
(iv) Ministers must accept the full implications of the
principle of ministerial responsibility.
Can you see the parallels between the corporations Act and
the Ministerial Standards? Accountability, fairness, transparency, diligence…The
question that must now be asked is quite straight forward
WHOSE INTERESTS ARE BEING SERVED?
Absolution from Responsibility
When a director or corporation absolves them/itself from responsibility, they are brought to bearby the courts and all too rarely, ASIC; the somewhat toothless Government Watchdog that has its investigative and enforcement power stripped away by successive governments. (That is another article in the works). As recently as the Banking Royal Commission, The Hayne Report stated:
“A trustee has a duty to identify relevant considerations before making a decision and to use all proper care and diligence in obtaining the relevant information and advice relating to those considerations. It has been said that if the consideration of the trustee is not properly informed, it is not genuine. The duty to take these steps flows both from the best interests obligation and also from the duty of care, skill and diligence. – P58 fsrc-volume-2-final-report
Are you starting to see a
There are multiple laws and acts in place to hold Directors and Corporations accountable. However, there seems to be very little in the way of processes for holding Governments accountable. Yes, we have the opportunity every three years to voice our view, but lets not forget, it took just six years between 1939 and 1945 to cause generations of loss, destruction, genocide and ecocide. Caused by a government that was not initially held to account and it’s people surrendering to dangerous propaganda – a view used to promote a view or political cause…
Let’s also respect that not all have the will, drive or need to pursue a graduate diploma or master’s degree in their chosen area of responsibility or interest. The Minister for the National Disability Insurance Scheme and Government Services is no fool. He holds an MBA and Graduate Diploma in Information Analysis. He is aware of his duty of care and his ministerial obligations. It seems that his “corporation” is a willing and supportive co- conspirator, letting significant lapses in judgement care, skill, and diligence slide “through to the keeper”. Next ball please.
It’s by Design
This same minster also made headlines for claiming nearly $3000.00 per month for internet access. Other transgressions include signing his father up to be a director – without his consent or knowledge -to his own Private Investment Company – that conveniently had won tens of millions of Government contracts.
Interestingly, under the 201D of corporations’ act, “Consent
to act as director”, A company contravenes this subsection if a person does not
give the company a signed consent to act as a director of the company before
Lets not waste too much time talking about Rolex’s and conflict of interest….Once more, that’s another article for another time.
I hope you seeing a pattern. It would appear that different rules apply to the elite few than to the egalitarian many.
The Rule of Law is not a Law of Rules
We are indeed in very dangerous times. When a government Minster is empowered and supported by its “board and CEO” whilst flagrant breaches of its own Statement of Ministerial Standards occur. We are in real danger of abusing the Rule of law. This is where our democracy rapidly falls to pieces. Remember…just six years.
As Chief Justice Allsop AO wrote, The Rule of Law is not a Law of Rules.
He stated: “The Rule of Law lives in the recognition by
society of the human character of law: its essential underpinning human values
– honesty, equality of treatment, a respect for the dignity of the individual,
the rejection of unfairness, and mercy; in the place of an independent
judicature and an independent profession; and in the judicature’s exercise of
its accompanying irreducible protective power.”
Let’s consider just one part of this very important text. “equality of treatment, a respect for the dignity of the individual, the rejection of unfairness, and mercy”
We can now complete the circle. In February 2020, our Government has claimed it does not owe welfare recipients a duty of care over the RoboDebt scandal; it claims no responsibility for equality of treatment or a respect for individual; it rejects fairness and shows little or no mercy.
If you’re not infuriated by now, I’ll let you consider The Australian Department of Health’s handbook advice for its workers. It discusses responsibilities to “your clients and to other workers”.
“As a worker, you have a legal and
moral responsibility to keep your clients safe from harm whilst they are using
a service. This responsibility is known as ‘duty of care’.”
If only our elected “leaders” acted and behaved in a manner that they expect their public and public servants to.…Uh, but alas, that would require accountability and transparency. Two qualities that have been sorely missing in politicians for too many years.
In Feb 2019, it was reported that more than 2030 people had died after receiving a Centrelink “Robodebt” debt notice.
 Abacus Trust co (Isle of Man) v Barr  1 All ER 705, ; Scott v National Trust for Places of Historic Interest or Natural Beauty 
 All ER 705, 717.  Finch v Telstra Super Pty Ltd (2010) 242 CLR 254,  citing Kerr v British Leyland (Staff) Trustees Ltd  WTLR 1071, 1079; Stannard v Fisons Pension Trust Ltd  IRLR 27, 31.
 1. Tricker, Bob. Corporate Governance: Principles, Policies and Practices (p. 103). Oxford University Press.
2016 had been a pretty tumultuous time. I had resigned form a senior Executive role in a global company. The company had experienced its greatest growth and most profitable period under my stewardship. The team had grown and I was assembling a diverse array of highly competent global talent.
On the other hand, I was miserable and was turning into – if not already – a goal orientated leader. The next KPI or bust. It was not me. I liked taking people along for the journey and all too often, it felt like I was taking my team for a ride. Compounding this antagonism was a a feeling that I was more pariah to my head office than a valued leader.
Searching for Balance
I needed to find time for my long suffering wife and…to finish my MBA. It turns out it is extremely difficult to complete an MBA whilst running a company. Consequently, I performed most of my assignments and study on planes and in hotel rooms. (FYI…not ideal!)
My final subjects were Financial Management – a brutal look back into High School Mathematics – complete with relearning the scientific calculator – and new leanings of capacity costing, dividend discount models and how to use hurdle rates…I finished the three hour written exam in just under 90 minutes, and scored my second highest mark. The final paper was a research project that would take over three months – full time – to complete.
I chose Corporate Governance as the topic and mirroring my journey; researched what support was available to new and aspiring directors who took on leadership roles within Australian Based Subsidiaries of Global operations. The brief took six weeks to be approved as I was treading uncharted territory: Calling out our current Corporate Governance system and learning Institutes as being deeply flawed.
A business opportunity?
To make a long story much shorter, (you can read the paper here) I interviewed over 50 leaders and found that 87% had little in the way of formal training to perform their director giving roles… Probably the most satisfying day of my four year MBA journey was reading the mark it received. The paper received a High distinction and raised my very average GPA to creditable 5.2
I thought I had found my Niche business as I was deeply passionate about Corporate Governance and believed I lived and have led a highly ethical and accountable life to date. Another three months were invested in developing financial models and business plans before I took the plunge. My new business would offer and facilitate Corporate Governance Training training with a difference. Hopefully I could negate the anguish and difficulties I felt when I had taken on a directorship. There would be no institutionalised lawyer and accountant speak.I would offer Practical real world governance strategies for novice and aspiring directors….
The Leadership Void
Alas…It turns out that most businesses and “leaders” don’t really want to be informed or compliant. They will mostly do only what they need to. You can read my views on our current leadership void here.
“Our Leaders are Long on Words & Short on Action” – @PaulPolman posed at the recent Davos 2020 talkfest… A great insight was provided by Halla Tomasdottirhere. What caught my eye was the need this.
“Leaders who think in terms of people and planet, and value sustainability, equality and accountability in business are growing in strength and collaborating like never before. “
Plan B – Halla Tomasdottir
Most noteworthy, here we are 47 days into 2020, democracy, our environment and ethical leadership teeters on a knife edge.
What could I do?
What can I do?
In a moment of rage, driven with the inaction of the Australian Government to mounting environmental destruction from mining, fires, floods, droughts, CO2 emissions etc, etc etc… I Googled “Ecocide“, and found an amazing organisation.
A ray of Hope?
Earth Laws Alliance. What’s more, the home page teased me with:
If you take a cursory glance, it isn’t anyone in western politics..that is for sure. We seem to have entered the “fight for the next election result” phase of humanity. Of course this wreaks of short sighted and deeply flawed logic.
Teach them while they’re young
One of my greatest childhood experiences was being in the Cubs. The early years of scouts was good too…but then it became daggy, uncool and regimented…uniforms? I had school for that….(ahh…the teen years….)
Attending cubs, at the ripe old age of seven, we learned Bushcraft. Merit badges awarded once we demonstrated skills including:
constructing a bush shelter that you could sleep in overnight
prepare and cook at least two meals on a camp
what to do if you lose your direction when on a bushwalk
Show how to build a safe fireplace in the bush.
How many adults do you know that could competently complete that “challenge”? We learnt how to live in and with the natural environment. Fast forward 40 years (or so) , I’ve moved from the country and now live in the biggest city in Australia. For the most, I find it soulless and unfriendly. There is little sense of community and an overemphasis on consumerism on steroids. As Thomas Berry observed in “The Great Work”:
” Summer and winter are the same inside the mall. Ours is a world of highways, parking lots, shopping centers. We read books written with a strangely contrived human alphabet. We no longer read the Book of Nature.”
Screen time V Scene Time
I grew up in a cul-de-sac shared with 10 other families. We knew everyone by name and every afternoon involved a form of “force ’em backs “, billy carts dragged by bikes, scooters or some other harmless mischief. The only rule: “Be back home before the street lights come on.”
TV was something that occupied 1/2 hour after you walked home from school. Looney Tunes was the only choice and during the early hours of Saturday Morning, we could marvel at the adventures of the Thunderbirds. Sunday Evenings, Countdown was on , just before Disneyland.
It was a simple, fulfilling up bringing. I now wonder whether cubs and weekend sports is a very cost effective, learning development baby sitter? However, I now believe it was absolutely the best upbringing I could have had. Being regularly immersed in nature, I could build stuff and was learning respect, discipline and empathy.
The evolving loss of awareness
In 2005, six years after I moved from the country, I had secured a fairly prestigious role. I was the GM of one of the largest Business chambers of commerce in Australia. It was a far cry from the seventeen year old country trade apprentice cutting, folding and installing kilometres of air -conditioning duct-work.
Life was fast. People were…prickly. Here, trust is demanded and not earned. Respect seemed to align with a job title, and not so much merit. How did these people earn their merit badges?
Following a pretty animated meeting with one such self badged “meritorious” executive, I walked back to my Harbourside office. I stopped and looked at the trees, the birds, the bridge and thought: “I walk past this every day and rarely stop to breath in the beauty of it all”.
The city, the job, the fast paced environment, it seemed was efficiently taking the country from the boy. That job allowed us to buy our first property. I keenly moved south to the fringes of the third oldest national park in the world.
Royal National Park as a backyard
“Established in 1879, Royal National Park is Australia‘s oldest national park and spans the area between the coastline and Hacking River in Sutherland Shire, about an hour south of Sydney. “
We chose a building block right in the middle in a little town – right in the middle of the park. I loved it, my city born and bred wife loathed it. Consequently, as with all effective relationships, a compromise had to be reached and an exit strategy formulated to “move back into civilisation”.
Interestingly, the small town was suffering from an identity crisis. It was trying to be urban chic, with cafe’s serving $4.00 coffee’s springing up as it grew to meet the ever expanding girth of Sydney. Strangely, the people were…prickly. The man who had spent 37 years in country NSW and his wife, were considered “city folk”. Ironically, the townsfolk were extremely parochial and we found them, mostly, unfriendly.
The park is still just 15 minutes drive away. It frames the view from our rear balcony. However, our compromise is that we have a bus at our door and cafes’, restaurants, trains and hospitals all within a 5 minute drive…
Learning from our First Nations People
The “newer” home is just a little like living in the country. We even know our neighbours…by name!
Although…it’s not. Once again, I’ll borrow from Thomas Berry.
We might have learned from our Indigenous peoples how to establish a viable relationship with the bush and with it’s inhabitants. It is evident that they have understood the rivers and mountains in their intimate qualities. They’ve seen this continent as a land to be revered and dwelt on with a light and gracious presence. Instead it was, to the colonists a land to be exploited. – (Amended from P41 – The Great Work)
It is 2020. Unfortunately, our elected leaders are stuck in a mid 90’s battle to see who can gaze at their navel the longest. Alarmingly, just this past January and for the first time in my life; I had to lock myself within my house and seal the gaps under the doors to be able to breathe. My eyes watered and throat itched.
Our living environment is suffering and there is enough scientific evidence that we have passed the tipping point for human survival. Make no mistake, the planet WILL survive. It will see off this Human “Pestilence” and balance her flaws.
SHE will get on with living; providing a future for all that remains. Her methods will be ruthless, efficient and our natural environment will flourish without us.
Take just a few moments to consider how your business interacts with contractors… The cleaners, security guards, IT support, Electricians, A/C Maintenance – even the photo copy maintenance people…
Who are the people you readily admit into your workplace without considering your exposure to personal risk?
Responding to Regulation change is a ‘Top 3 priority ‘for Australian CEO’s according to the latest KPMG report ‘Global CEO Outlook 2017: The outlook for Australia”. Are you aware of the regulatory requirements as a person conducting a business undertaking (PCBU) for managing contractors?
I read the latest KPMG survey ‘Global CEO Outlook 2017: The outlook for Australia” with great interest. Having been be an MD of a international subsidiary; charged with growth, profitability and sustainability, I was interested to see where the barometer of authentic leadership lay.
Whilst there were many ‘good news’ stories of forecast growth and a conclusion that CEO’s are up for a challenge and ‘…are demonstrating an ability to embrace change while approaching new ideas with enthusiasm”, we seem to be going backward globally on the very basic necessity that companies need to invest in. Their people.
A warm welcome to you on a chilly Sydney morning. It’s been a little while!
I hope you have had a chance to read KPMG’s “Global CEO Outlook 2017: The outlook for Australia” , if not, I highly recommend it and you can download it here .
One of the key take aways for me was a that our CEO’s are making “responding to regulatory change” a top 3 priority! That’s a nice change. In 2016, I found that nearly 43% of Aussie MD’s did not keep their staff updated to legalisation relevant to their functional areas. So, after what 2017 had dealt us so far, it’s great to see some focused, forward thinking leadership!
Why do we apply different standards for those who lead our organisations to those whom they employ?
In 2016, I surveyed over 50 MD’s for a whitepaper. If you’d like a copy, visit here.
Excerpt Interview question 1: Do you as an Australian MD of a foreign controlled entity consider you were adequately prepared or briefed on the corporate governance compliance accountabilities and liabilities facing a director before accepting the role?
‘Being part of a global organisation, I naturally assumed that everything would be in order in regards to governance. The overriding emphasis was on achieving budgets and adhere to monthly reporting, so in reality absolutely not’.
‘No, I accepted my role in (home country) and I learnt by doing. You must be self-motivated, but I did rely heavily on external consultants who instilled fear and prompted a response’
‘I did receive a handover from my predecessor however it was based on operational content and there was no OHS or director liability discussion’.
‘The company did not offer anything formalised however I requested to undergo the company directors course and they (eventually) agreed to my participation’.
‘absolutely not. If it weren’t for my extensive professional network, I would have been blind. I relied heavily on external expertise from my lawyer and accountant- sometimes daily consulting’.
If you are a company officer in Australia, I’d be interested in your experience. New survey is at found here
In this edition, we revisit Aprils successful SME leaders course launch; share some insights into the challenges of running international subsidiaries; delve into stakeholder engagement strategies and take another look into life’s successes and failures.