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Disclaimer: This blog site has been prepared by Directors Australia for the purposes of providing general information only. Nothing on this blog site should be used or relied on for legal or other advice by any party. Each party's individual circumstances may change the effect and relevance of any matters discussed.
By guest blogger Chris Moody: Brand Audits
Branding is no longer the domain of companies. Successful executives and entrepreneurs are realising the need to cultivate and manage their personal brands to maximise and increase their business opportunities. Whether you like it or not, each and every one of us has a personal brand. This 'Brand You' can be managed in the same way corporate brands are managed—with authenticity, with your unique story, and by highlighting your unique skills.
How you manage your personal brand is particularly relevant to to those of us who wish to pursue a non-executive director roles on boards. Obviously the pre-requisites for board's consideration are assumed—meeting the selection criteria in the position description for the role—but how do you create a personal brand that ensures that you stand out for consideration for board roles?
According to the Australian Institute of Company Directors, "The board is responsible for ensuring that it has represented on it the skills, knowledge and experience needed to effectively steer the company forward. Directors will be appointed to the board because their specific skills, knowledge and experience will fill particular gaps on the board. It is important to acknowledge that not all directors will possess each necessary skill but the board as a whole must possess them.”
Why a differentiated personal brand important?
Apple is an example of a great brand. Apple—the corporate brand—encompasses every detail or 『touch point’ that comes in contact with the customer eg, Apple has beautifully designed, customer-centric products presented in purpose-designed packaging and contained in an innovative carry bag. The Apple website is easy to navigate and both the layout and the language align with the Apple ethos of simplicity and creativity.
So, taking the Apple example, we can apply this to understanding the power of great personal brands. When thinking of great personal brands we think of Barack Obama and his 『presence’ at G20 Brisbane last year—particularly his speech at The University of Queensland—and his brand style eg, the way he walks confidently down the red carpet at events. We can think of Australia’s Gail Kelly (formerly CEO, Westpac Group) and how she presents at corporate events including the tone of her voice, her corporate wardrobe, and the quality of her presentations.
The personal brands of these high-profile leaders are deliberately and purposefully designed to create a brand that is unique, authentic, and at the same time being in line and 'on brand' with the organisations they represent. Every single detail is considered and aligned with their desired personal brand.
Personal branding has become even more important with the growth in the use of social media. Personal branding has become even more important with the growth in the use of social media. Social media is personal by the very nature of the medium—Resume, LinkedIn, Facebook (personal and professional) et al. So these days, everyone has a personal brand and everyone needs to be in control of the management of their brand. It is important to ensure your personal brand message is consistent across each and every 『touch point’. Key to creating a differentiated and consistent personal brand is about delivering the entire brand package so you can carve out a niche and stand out from the crowd in an ever-increasing and competitive professional arena.
Where do you start with your personal brand audit?
If you are serious about board roles you have to be strategic. Firstly you need to audit your personal brand to find out your strengths and how these will fill the gaps on particular boards. Finding and highlighting your unique skills and experience will enable you to target potential board roles. Similar to a corporate brand, you need to find your own personal point of difference and promote this point of difference in everything you say and do. The outcome of your personal brand audit is to translate your brand's point of difference across all your 'touch points'—those points in which you present yourself e.g., your business card, linkedin profile, and other social media platforms.
The starting point of the personal brand audit is to ask yourself a series of questions to reveal your point of difference. The idea is to peel back the layers to reveal your unique qualities and then to highlight these to organisations whose boards need your skills the most.
The questions cover four main areas—including your competitive advantage; demonstrating your value; your specialist skills; and what boards would require your skills? The audit questions include:
> what are my unique and specialised skills that I can bring to boards?
> what organisations have boards that would require my particular specialist skills?
> who do I know that has similar skills to mine who are currently on boards that I can talk to?
Once you have completed the questionnaire, you need to apply the finding to your 'touch points'. Your personal brand includes your qualifications, your work experience, and your career success but also includes the visual aspects of your brand—your personal brand identity. This includes the way you dress and your behaviour and also the 『touch points’ of your brand identity—eg, the layout and quality of your business card and resume. No detail is too small to consider—eg, the style and quality of your photograph on your LinkedIn account.
The systematic approach includes the creation of your personal 'mood board'—how you see yourself and how this aligns with your current and future brand initiatives. This outcome of this process is to create an authentic visual brand identity that aligns with your targeted industry
sector and your skills. This process is time consuming but it is worth the focus and the time. You need to take control of your personal brand and differentiate yourself to stand out. Personal branding is a powerful tool in your professional toolkit.
*Christine Moody is one of Australia’s leading brand strategists and the founder brand management consultancy, Brand Audits. With more than 30 years’ professional experience, Christine has helped a diverse client base of local and international brands, including Gold Coast City Council, Hilton Hotels, and Wrigleys USA, to develop, protect and achieve
brand differentiation. Her particular interest is personal brand audits to assist executives realise their full potential.
Anita Brown: Senior Consultant
Simply put, a risk appetite statement sets out the amount of risk an organisation is willing to accept in pursuit of its strategic objectives.
You may believe your organisation is travelling along just fine without one, but without understanding the organisation’s appetite and tolerance for risk, your organisation may be creating a risk averse culture and missing out on some profitable opportunities. At the other extreme, your organisation may be taking on too much risk and it is just a matter of time before its luck runs out.
A clearly defined risk appetite statement which is aligned with the organisation’s strategy and a fundamental component of its risk management framework will provide your organisation with a clear picture of its risk management objectives and those risk events the organisation needs to reduce or increase its exposure to, as well as risk categories that need more or less attention.
A risk appetite statement is more than a good idea. Embedding a risk appetite statement will help foster a risk aware culture and guide consistent decision making which is within the organisation’s risk appetite enabling the organisation to capitalise on those opportunities.
So what does this mean in practice? The board should consider and agree on, for example, the amount of capital the organisation is willing to risk in pursuit of new commercial opportunities, the extent to which the organisation is willing to compromise its brand in the pursuit of innovative activities that might fail, what debt/equity ratio limits it will tolerate, etc.
The more guidance a board can provide regarding the organisation’s risk appetite and tolerance for risk, the more quickly and effectively the organisation can make decisions on opportunities and progress those which will further its strategic objectives and stop wasting time on those that don’t.
Anita has been responsible for the risk management function during her executive career and developed a number of risk management frameworks which were tailored to the organisation’s level of risk maturity. She has used her experience and skills to ensure boards contribute to the development of value-added risk management frameworks and processes, including risk appetite statements, which appropriately manage risk and guide the organisation in pursuit of its strategic objectives..
In late 2013, laws came into effect in Queensland to reduce the personal liability of directors for corporate fault. The move is consistent with the commitment by the Council of Australian Governments (COAG) to achieve greater national harmony for directors’ liability provisions.
The Directors’ Liability Reform Amendment Act 2013 amended a raft of Queensland legislation and significantly reduced the number of offences under which ‘executive officers’ face personal liability (from some 3800 provisions to less than 300). ‘Executive officer’ is defined broadly to include not only directors but also 'a person who is concerned with, or takes part in, the corporation's management, whether or not the person is a director or the person's position is given the name of executive officer'.
The Act establishes two types of liability – ‘Type 1’ and ‘deemed liability’ provisions.
Under Type 1 provisions an executive officer commits an offence where the corporation commits an offence and the officer didn’t take all reasonable steps to ensure the corporation didn’t engage in the conduct.
In considering whether an executive officer has taken 'reasonable steps' the courts must now have regard to:
- whether the officer knew, or ought reasonably to have known, of the corporation’s conduct constituting the offence against the executive liability provision
- whether the officer was in a position to influence the corporation’s conduct in relation to the offence against the executive liability provision, and
- any other relevant matter.
- Under the deemed liability provisions, where a corporation commits an offence against a provision of the Act, each executive officer is also taken to have committed an offence if:
- the officer authorised or permitted the corporation’s conduct constituting the offence, or
- the officer was, directly or indirectly, knowingly concerned in the corporation’s conduct.
These provisions significantly reduce the potential exposure of directors by confining exposure to situations where the directors or officers have some involvement in the commission of the offence. Previously, directors could be liable for the corporation’s commission of an offence without any such involvement.
The new laws also remove almost all director liability provisions which reversed the onus of proof.
The Queensland Legislation Handbook now makes it clear that proposed legislation should not make directors or executive officers of a corporation personally liable for offences committed by the corporation unless there is clear
justification for so doing. Further, if a provision is included, it must not reverse the onus of proof.
Queensland joins a number of other Australian jurisdictions which have reformed director liability provisions.
The Australian Securities Exchange (ASX) Corporate Governance Council is currently considering a proposed third edition of the Corporate Governance Principles and Recommendations. Listed companies are required to report against the Principles and Recommendations on an ‘if not, why not’ basis. Many non-listed entities find the Principles and Recommendations useful guidance on good governance with appropriate adaptation to their legal and ownership structure.
The proposed changes maintain the same number of principles (eight) and recommendations (30) although some matters previously covered in the commentary are proposed for inclusion in the recommendations.
Substantive proposed changes of note include:
- giving greater flexibility to listed entities to make their governance disclosures on their website rather than in their annual report
- adding alternative approaches within a recommendation to recognise that smaller listed entities may legitimately have different governance practices to larger entities, thereby allowing them to report that they comply with a recommendation rather than having to explain why they do not comply
- adding to the defining characteristics of an independent director, a reference to whether the director has been a director of the entity for more than 9 years
- introducing new and strengthened recommendations in relation to risk (principle 7)
- elevating some of the commentary in the current edition into recommendations in the third edition, reflecting the fact that they now represent contemporary governance standards against which entities should be required to report rather than mere guidance
- amending the diversity recommendations to give listed entities the option to report their “Gender Equality Indicators” under the Workplace Gender Equality Act 2012 instead of reporting the respective proportions of men and women on the board, in senior executive positions and across the whole organisation, and
- strengthening the commentary on the meaning of “measurable objectives” in the diversity recommendations and on the steps a listed entity can take to measure its achievements against the diversity objectives set by its board, in support of greater representation of women in management and on boards.
A separate consultation paper was also released regarding changes required to the ASX Listing Rules to give effect to the proposed reforms.
The Corporate Governance Council is currently considering feedback on the proposed changes. Non-confidential submissions can be accessed here: http://www.asx.com.au/regulation/corporate-governance-council/review-and-submissions.htm
In May 2013 the prudential regulator of the financial services industry - the Australian Prudential Regulatory Authority (APRA) - released a discussion paper Harmonising Cross-industry Risk Management Requirements, as well as new cross-industry prudential standards on risk management and governance.
The proposal would harmonise risk management requirements for authorised deposit-taking institutions (ADIs), general insurers, life insurers, single industry groups (Level 2 groups) and conglomerate groups (Level 3 groups).
APRA intends that its proposed package of reforms would ensure the consistent application of its risk management requirements across its regulated industries and reflects its heightened expectations in this area. In particular, APRA believes that its approach is consistent with the enhanced focus and improvements in risk management practices following on from the global financial crisis.
A notable feature of APRA’s proposed enhancements to Prudential Standard CPS 510 Governance, is a requirement that boards of regulated institutions establish a Board Risk Committee, to which a designated Chief Risk Officer would be accountable.
The proposed cross-industry Prudential Standard CPS 220 Risk Management (CPS 220) consolidates existing risk management standards for insurers and includes some risk management requirements for ADIs that are currently spread across a number of ADI prudential standards.
Submissions on the proposal closed in early July and it is anticipated that the proposals will take effect from 1 January 2014.
More information about the proposals can be accessed here.
APRA’s proposal coincides with the release of KPMG’s Global Audit Committee Survey which revealed that almost half of the respondents felt that their risk management programs required 『substantial work’. The survey also noted that many audit committees also have oversight of the company’s risk management process as well as other major risks facing the company including financial, operational, cyber security and IT, and legal/regulatory compliance risks.
Survey respondents generally gave low ratings to their audit committee’s oversight of risk including 『understanding the committee’s risk oversight responsibilities’.
A copy of the survey can be accessed here.