As 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 providing organizations with more tools—and people—to help them drive governance excellence.
Today, the Compliance & Board Advisory team plays an integral role in helping boards and leadership teams simplify governance and compliance evaluation processes, identifying growth opportunities for boards, and turning director feedback into strategic action. With years of insight and expertise, 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 speaks about his experience.
Tell us about your role on the Nasdaq Governance Solutions board engagement team. What are your goals?
My role is split into two parts, working with boards and leadership teams to help them improve their effectiveness as a team and individually and curating insightful and topical thought-leadership to drive board excellence in Australia and the South Pacific. I think this is a pivotal time in Australia’s corporate governance landscape as it wrestles with significant societal and global changes that challenge traditional roles and responsibilities in the boardroom, many of which are being led in other jurisdictions. One of my key goals is to bring the wealth of experience and relationships that Nasdaq has all over the world to the Australian community and to 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 businesses in our region, due to our position as a global governance expert and leader 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 matters?
Coming from several years in politics, I see many similarities between corporate governance and government, both in the good and the bad. Just like we are seeing in politics, companies’ stakeholders are holding leadership to greater accountability and closer scrutiny as to how they are responding to key issues, but also heavily criticizing actions that appear to be virtue-signaling or tokenistic. Merely complying with the law or declaring a lofty ten-year plan is no longer good enough; now, it’s falling foul of the ‘pub test,’ where a lack of genuine, 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 responding to every issue and concern out there. I take the view that effective leaders intimately care about what their company stands for, determining those issues that are genuinely material to their business and their stakeholders. Good governance is about taking individual and collective action to ensure that those priorities are shared and promoted at every tier of the organization, which attracts talent, promotes growth, and generates revenue.
What governance themes or trends do you expect to be in focus moving forward?
Given the turbulence of the past two years, I’m hesitant to make too many predictions, but some key trends are unlikely to disappear. ESG had a huge year in 2021 as a headline issue for corporate governance in the public forum and the proxy season, but there are certainly some in Australian boardrooms who are still deeply skeptical of stakeholder capitalism and social responsibility as ‘woke’ ideologies that distract from a company’s core purpose. While I think there is substance to those concerns, many stakeholders are finding their voice and ability to create an impact on several issues (particularly climate change) and, critically, finding a new, sympathetic political environment keen to utilize that passion for political popularity and willing to pass tougher legislation to demonstrate action, as shown by their European and US counterparts. It’s a potent combination that could quite likely create serious trouble for companies that have little to show in terms of meaningful short- to medium-turn action on ESG issues, especially those that have lofty stated ambitions. At the same time, growing regional tensions in the Asia-Pacific are likely to cast a greater spotlight on supply chain resilience and cybersecurity practices, while rising costs of living and potential economic downturn will challenge boards on executive remuneration, wage increases, and flexible/remote working 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 foundational issue at every stage of the business, regardless of enterprise value or number of employees, because it translates into how effectively the values, vision, and strategy are replicated and reinforced at every level of the company. I think many companies, especially in the Australian context, are reticent to connect discussions around board effectiveness with material priorities and outcomes of the business. Effective, dynamic boards are invariably those that cultivate a culture of regular self-evaluation, which translates into tangible outcomes for the business, like revenue generation, talent retention and acquisition, and delivering on strategic goals. As the business grows and matures through different stages, the compounding 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 directors are servant leaders. They recognize that they are appointed to serve the company and its stakeholders, not themselves, and they take active ownership of shaping a company that they would be proud to work for, whether as an executive or as an intern. They also are willing to share their experience, wisdom, and time with others, especially 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 the responsibilities and boundaries of a director.
Learn more about how the Board Advisory team delivers value to boards and leadership teams through qualitative and quantitative evaluation and corporate governance services.
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