Directors want reforms to stop slip back to old ways post-coronavirus

The nation’s top company directors want the federal government to radically rethink its reform agenda.

Angus Armour, CEO of the Australian Institute of Company Directors. Picture: Britta Campion

The nation’s top company directors want the federal government to radically rethink its reform agenda and guard against a drift back into the “bad habits” of the “old normal” in a post-COVID world.

The Australian Institute of Company Directors survey of directors’ experiences during the COVID-19 shutdown and their perspectives on the future found more than two-thirds (68 per cent) want the government to set out on a bold period of economic reform and regulatory reset.

They overwhelmingly welcomed the introduction of a national cabinet as presenting a new way forward for federal and state relations.

“The global environment is not benign. As a nation and community, we must maintain our resolve to respond decisively with our focus on the long term,” AICD chief executive Angus ­Armour told The Australian.

“History will judge this next period of economic recovery on our ability to navigate a path of major economic and regulatory reform.’’

The survey, which polled more than 2300 directors over the last two weeks of May, found 81 per cent would prefer to see a cautious phasing out of government stimulus policies such as JobKeeper and the coronavirus supplement, rather than a rapid wind-down — even at the cost of increased government deficits and debt.

Mr Armour said the COVID-19 recovery would require boards to be bold and take decisive, calculated risks in the best interests of their companies.

But he said the nation’s director liability framework, which was burdensome by international standards, worked against directors accepting the risks involved in establishing new and innovative business models.

“The community expects — and good governance requires — that boards will take a long-term view in their decision making, considering shareholders and members, employees, stakeholders and the community in governing for the best interests of their organisation,’’ he said.

“But viewing every director decision through the lens of a ­potential criminal act will not encourage risk-taking and bold, growth-generating investment. When every decision can be tested with perfect 20:20 hindsight, human behaviour tends to cautious, incremental steps that follow a well-worn path.”

He said priority should be given to balanced reforms that extended due diligence defences.”