by Jenny Junkeer

Non-executive directors are at risk, the question has been raised, should they be? After all they don’t run the company, or do they?

If you provide advice and guidance to someone, should you be held accountable for the consequences? ASIC says yes.

Is this unfair?

Malcolm Broomhead says maybe structural reform may be the solution.

I believe this is difficult for the legislators. The source of the problem comes from a lack of transparency from the management of the company, which is driven usually by either

a) an attempt to protect personal interest (both financial interest and/or covering up personal faults) or,

b) the organisation isn’t in a position in which it can produce completely transparent information.

Either way, there is a problem and it’s not going away.

There are solutions to the problem, but is anyone in the organisation actually looking for them? Or accountable for finding them? Usually not, herein lies the true source of the problem.

Using Junkeer’s 8 lens framework, the holistic solution is to ensure organisations are measured in a different way going forward (not just based on share price, profitability or enterprise value). The strength of the internal organisation should be measured as well - placing transparency front and centre as a priority.

Think about how much more could be achieved if each of these lens segments are optimised. The transparency it would generate, not just for management, but also for the board of directors. There is no place to hide. It would increase trust from the shareholders and the public.

If a different outcome is needed, we must start with a different perspective!

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