Does Your Governance “Demonstrate Reform”?

And another Governance Failure was recently in the Spotlight, that of Edmund Rice Education Australia (EREA).

EREA is described in the media as a multi-billion-dollar body overseeing seven Catholic schools in Victoria, including Melbourne’s St Kevin’s College. It recently wrote to apologise to parents after receiving a notice that it had failed to carry out its obligations under child safe standards or to demonstrate appropriate oversight of child safety.

The notice to EREA means it must now urgently reform its governance structure and ensure its schools undergo a review by the Catholic Education Commission of Victoria.*

Bittersweet

Too many will have their own stories of Boards, CEOs and senior leaders failing to stay informed, or if informed, failing to take ownership and then to act appropriately and decisively.

It is a theme that plays out every day across all types of organisations.

The Message for the Issue

It is important for any organisation to readily acknowledge wrong when it arises, and to be prepared to apologise for those failures. This at least offers any of the individuals or groups effected to feel some relief that all they went through has not been for nought.

However, the apology script seems to be now such a well-worn path for when anything untoward occurs, that some question whether it has lost its impact.

Apologising still has a place in the overall management approach of issues, however, on its own it is insufficient. Any apology needs to be followed by action of demonstrable reform or the apology becomes mere hollow words arguably to save face and avoid taking any meaningful action.

An Embarrassment of Lessons

Many organisations will indicate that lessons have been learnt and that actions are now underway.

This can be a genuine position and an important precursor to taking any action. However it can also be part of adopting a vague response, which delays or maybe even fully stalls tangible action.

Will general platitudes about having learnt lessons continue to suffice for the future?

It seems that impacted stakeholders are now demanding more and this is transferring to an expectation of regulators to consolidate this change.

With such an emergent change, individual directors may find they face expanding public scrutiny for what has happened on their watch.

A Question of Transformation

In 2023 these two words “demonstrate reform” ought to be at the forefront of every Board’s thinking, as well as the impact it may have on their governance practices.

Governance, at its core, is measurable by identifiable outcomes achieved through a disciplined and aligned commitment from the Board, CEO and stakeholders.

Nothing magical, but it does take both a level of governance maturity and long-term thinking. It is after all a commitment that too often is lacking when there is an ineffective governance focus operating at a Board level.

An Observable Shift

The community has already changed gears in their expectation on the role of Boards. Now, it seems the expectation of regulators is changing too. There are examples of this being clearly observable that regulators have too changed gears.

A very recent example is ‘greenwashing’. ‘Greenwashing’ has emerged at the forefront of regulators reviews.

Interestingly, technology has been used by the ACCC to investigate for potential ‘greenwashing’. ACCC undertook an internet sweep and found many businesses claiming environmental or sustainability practices.

The ACCC statement – “Our sweep indicates a significant proportion of businesses are making vague or unclear environmental claims. This warrants further scrutiny,” ACCC Deputy Chair Catriona Lowe said.

Strangely there may emerge different types of ‘washing’. For what else might the recent news of government be called.

It was reported that ex-minister Stuart Robert not only ‘takes responsibility’ for Robodebt implementation, but apparently admitted he defended it despite knowing it could be unlawful.

Is it any wonder that even the regulators and the courts reach a point of “enough is enough”?

Will the new mantra in governance be “demonstrate reform” or face the consequences?

Please drop us a line or phone to explore your current Board or organisational challenges and be pleasantly surprised to learn just how prevalent those matters are. We are happy to share our approach in not only resolving those immediate challenges but offering an effective solution that results in a more positive future.