The corporate governance environment continues to evolve, Nasdaq Governance Solutions is committed to evolving with it. In 2019, Nasdaq acquired the Center for Board Excellence, expanding its suite of solutions and giving organizations more tools and people to help drive excellence in government.
Today, the Board Compliance and Advisory team plays an integral role in helping boards and leadership teams streamline governance and compliance assessment processes, identifying growth opportunities for boards. and turning director feedback into strategic action. With years of knowledge and experience, they have become an invaluable part of the Nasdaq Governance Solutions business.
We hear from Nicholas Chilton, Head of Board Advisory, South Pacific at Nasdaq, who talks about his experience.
Tell us about your role on the Nasdaq Governance Solutions Board of Directors Engagement Team. What are your goals?
My role is divided into two parts: working with boards and leadership teams to help them improve their effectiveness as a team and individually, and selecting insightful and topical thought leadership to drive board excellence across Australia and the South Pacific. I believe this is a pivotal moment in Australia’s corporate governance landscape as it grapples with significant societal and global changes that challenge traditional boardroom roles and responsibilities, many of which are being addressed in other jurisdictions. One of my key goals is to bring the wealth of experience and relationships Nasdaq has around the world to the Australian community and promote a vibrant exchange of ideas and perspectives that will help Australian boardrooms engage with these emerging challenges. Another goal is to see Nasdaq Governance Solutions recognized as a unique partner for companies in our region, due to our position as a leader and expert in global governance and as an ecosystem of governance services and products for companies at all stages of their journey.
What lens do you take when advising boards and leadership teams on governance issues?
After several years in politics, I see many similarities between corporate governance and government, both good and bad. Just like we’re seeing in politics, business stakeholders are holding the lead for greater accountability and closer scrutiny as to how they’re responding to key issues, but also strongly criticizing actions that seem to signal virtue or symbolic. Merely complying with the law or declaring a lofty ten-year plan is no longer enough; now, it is failing the ‘pub test’, where a lack of genuine and substantive action on an issue can have material consequences for a business. At the same time, boards and leadership teams cannot and should not be responsive to every issue and concern out there. I am of the opinion that effective leaders care intimately about what their company stands for, determining those issues that are genuinely important to their business and their stakeholders. Good governance is about taking individual and collective action to ensure those priorities are shared and promoted at all levels of the organization, attracting talent, promoting growth and generating revenue.
What governance themes or trends do you expect to be the focus of in the future?
Given the turbulence of the past two years, I hesitate to make too many predictions, but some key trends are unlikely to go away. ESG had a big year in 2021 as a top topic for corporate governance at the public forum and proxy season, but there are certainly some in Australian boardrooms who are still deeply skeptical of stakeholder capitalism and accountability. social as ‘awakened’ ideologies that distract from the main purpose of a company. While I think those concerns are well founded, many stakeholders are finding their voice and ability to make an impact on various issues (particularly climate change) and, more importantly, finding a new sympathetic political environment willing to use that passion for political popularity and willing to pass tougher legislation to show action, as their European and American counterparts have shown. It’s a potent combination that could very likely create serious problems for companies that have little to show for it in terms of significant short- to medium-term actions on ESG issues, especially those with high stated ambitions. At the same time, rising regional tensions in Asia-Pacific are likely to draw more attention to supply chain resilience and cybersecurity practices, while the rising cost of living and potential economic downturn will challenge boards of directors. on Executive Compensation, Salary Increases and Flexibility/Remote Work Arrangements to Allow for Housing Affordability Issues Among Younger Employees.
Why should companies at every stage of the business life cycle think about board effectiveness?
Board effectiveness is a critical issue at every stage of business, regardless of company value or number of employees, because it translates into how effectively values, vision and strategy are replicated and reinforced across all boards. company levels. I think many companies, especially in the Australian context, are reluctant to connect discussions of board effectiveness with material priorities and business outcomes. Effective and dynamic boards are invariably those that cultivate a culture of regular self-assessment, which translates into tangible results for the business, such as generating revenue, retaining and acquiring talent, and meeting strategic objectives. As the business grows and matures through different stages, the combined effect of good governance practices and board effectiveness becomes apparent throughout the organization.
What is one piece of advice you always share with the directors you work with?
As with all leadership in every industry, sector, and context, the most effective managers are servant leaders. They recognize that they were appointed to serve the company and its stakeholders, not themselves, and take active ownership in shaping a company they would be proud to work for, whether as executives or interns. They are also willing to share their experience, wisdom and time with others, especially in mentoring and developing the next generation of director candidates. That means parking your ego at the door, which is not an easy thing to do in the corporate world, and entering the boardroom with humility and an awareness of a director’s responsibilities and limits.