CEO's address at Audit Committee Forum

Lee White FCA
CEO, Institute of Chartered Accountants in Australia


13 February, 2012
Art Gallery of NSW


Thank you Craig for your opening comments.

Good evening and thank you for accepting our invitation to participate in this Forum. This is the second time we have hosted this type of event – where we present our research with analyses – then those findings are discussed in a Forum. And I am thrilled with the diversity and calibre of skills and experience around this room tonight.

Our vision is that we wish to bring the leaders of business, academia, regulators and policy makers together to discuss and explore solutions for some of the key issues facing Australia. Our members have the expertise and exposure to the full range of business issues, and as shown by those involved with our paper, are generous with their time in sharing that experience.

I would also like to add my personal welcome to our international guest, Stephen Haddrill – Stephen we are very pleased to see you here again on our shores – thank you for sharing the desire to create a global piece of work focusing on Audit Committees. I also think I am starting to detect a slight hint of an Australian accent in your speech......

Before we get to the business part of the evening I did want to reflect for a minute on the current exhibition at our Art Gallery – it is a significant showing of the great works of Pablo Picasso.  For some brief insights into Picasso and his attributes let me share the following:

  • He was truly an innovator – co-founder of the Cubist movement in the twentieth century
  • A child protege
  • Multi-talented – he was a painter, sculptor, printmaker, ceramicist, and stage designer
  • No painter before him had such a mass audience in his own lifetime
  • Longevity – lived to 91 years of age
  • Prolific – approximately 50,000 art works.

And finally, perhaps the most quirky aspect relating to Picasso – which is not actually about him – is that an American businessman and casino operator not many years ago cost himself quite a sum of money (reportedly $54m) when he accidentally put his elbow through his Picasso painting, Le Reve or the Dream whilst showing the painting to friends. 

I have two themes to highlight that may contribute or stimulate our thinking and conversations for this evening.

The first theme is around the development of good public policy. By that phrase I mean policy that is achieving societal goals with a long term perspective. My remarks here are at a holistic level in Australia today.

At the moment public policy is a red hot area of debate. Recently the Prime Minister and the Leader of the Opposition brought focus onto economic management.

And related the achievement – or lack of – to strong economic public policy.

We are also hearing much rhetoric around the need for government and business to work together more effectively to augment the right policy outcomes. Good process is the key to ensuring that this happens. We certainly share the sentiment to improve the process and believe we can contribute significantly to that public/private sector engagement.

Effective policy development demands careful analysis. For example we would ask – is there sufficient analyses being performed after policy implementation to assess the effectiveness of the policy? How is that analyses used – or put more simply – are we open about results and are we leaning from our experiences? Oscar Wilde once remarked that 'experience is the name everyone gives to mistakes'! We learn from our mistakes.

And this is one reason post-policy analysis drives policy improvement rather that merely encouraging proclamation of success or failure.

At some point, most of us have had to take our car to the mechanic when there was a problem. After the car has been fixed, the real test or effect of the mechanic’s work comes from taking that car back on the road to gauge the improvement.

Accountants are often charged with being too focused on the past – whilst I don't accept that view – let’s turn that perception around. Accountants through their training, knowledge and experience could provide great assistance to developing good public policy for all aspects of society through their innate talent of strong analytics and evaluation skills. And we would encourage this reflective input into the policy development process.

The second theme is around the international perspective. Australia has avoided the worst of the global slump in recent years – a good outcome – but it is important to consider the implications of this experience, especially with current challenges spinning off the events with the Eurozone. We need to be wary. Complacency is not an ingredient of progress; executing in a timely manner is.

It should mean that we want to learn from other jurisdictions’ actions and experiences and balance that understanding with the view that bringing 'solutions' from other major economies does not always fit our needs. One major challenge is that we do not have international 'solutions' indirectly brought into the Australian market due to globalisation pressures.

Let me now turn briefly to our paper. We have for some time recognised that a core priority for our members and more broadly the public interest is the Audit Committee. This paper and Forum is one way we are contributing to improvements by working in collaboration with our Northern hemisphere partners to provide key benchmark information. The discussions and insights with leading Audit Committee members has been drawn together to highlight on a global basis the current status of the committees, their effectiveness and their challenges. These insights are particularly valuable when you consider the Audit Committee is one of the key pillars of the corporate governance system.

When we were analysing the drivers of effective Audit Committees it was very clear the most prominent is that of the behavior and culture emanating from the Board. The regeneration of outstanding Boards and Committees is not dependent only on the skills and knowledge from varying 'technical' backgrounds but more importantly on the values and cultural alignment and a fundamental notion of personal responsibility.

I look forward to the panel discussion shortly and I thank the panellists for giving their time so willingly tonight.

I would like to acknowledge the Australian Charities Fund. For those of you who may not be familiar with the Fund, it is focused on advancing the support of a range of worthy charities and community activities through workplace giving programs. They see significant social impact through employers and community organisations working together.

The Institute of Chartered Accountants in Australia – and I know there are other engaged employers here tonight – is proud of our partnership with the Fund.

I would also like to welcome Sharon Kerr from Macquarie University who is showing great initiatives in embedding the thinking and practical experiences of working and employing people with disabilities. This initiative is one that aligns with our values as an organisation and we are proud to support this program.

Brief details about the Charities Fund and the Macquarie University program are included in your packs tonight.

I would also like to thank the following people who have worked well to put this event and publication together: my colleagues Kamini Rambausek, Chris Westworth, Valerie Sellwell and Jane Eden.

Finally I would like to recognise the late Erik Mather of Regnan Securities. Erik participated in this event last year, was a great collaborator and friend of our Institute over many years and enjoyed engaging in 'pushing the boundaries.' Erik passed last year but his influence remains. He would have enjoyed tonight.

Article last updated 21 February 2012