In November 2021, the Governance Institute of Australia published its Future of the Board report. According to the Governance Institute, the report “outlines the challenges the board of the future is likely to face, what issues need to be on the radar now, and the skills and attributes board members will need to be effective.”
Overview: The Eight-Point Roadmap to Success for Boards
- Be in tune with the public
- Achieve balance under pressure
- Embrace ESG (environment, social and governance)
- Know how to add value
- Be honest about time commitments; seek out the right pay
- Take control of your development
- Work more closely with management
- Be bold with risk.
1. Be in Tune with the Public
“Future board members will need to understand the most pressing issues of the day and translate them into action to be taken by their organisation.”
The Royal Commission and the COVID-19 pandemic have brought an unprecedented level of public scrutiny to the residential aged care industry in the last few years. There is no shortage of “pressing issues of the day” that providers need to understand. The challenge is keeping pace. Periodic summaries of news like our Weekly Wrap can help in this respect.
Closer to home, providers also have an obligation to be “in tune” with their consumers. Requirement 8(3)(a) of the Aged Care Quality Standards requires providers to engage consumers in the development, delivery and evaluation of care and services. Boards should be receiving and considering regular reports on consumer feedback, and should be translating that feedback into tangible actions.
2. Achieve Balance Under Pressure
“Future board members will face increased pressure from a variety of sources. They will need to balance their time between traditional issues and newer ones in order to address the concerns of all their stakeholders.”
Time management is a major challenge in aged care, and facing it will require a shift in the standard mindset. Many aged care boards are slow to change their processes. This can leave them floundering in a world of increasingly fast-paced change.
If the COVID-19 pandemic has shown us anything, it’s that new pressures can arise suddenly and unpredictably. But at the same time, the core goal of aged care remains the same: no matter what happens, consumers still need quality of care and services. In turbulent times, adaptability and stability can be maintained by holding firmly to this core goal while encouraging flexibility with regard to specific processes. The question is not: how do we maintain our set processes in the face of new challenges? The question is: how do we maintain quality care in the face of new challenges? Sometimes the only way to maintain quality care is to focus on the same outcomes but change your processes or the way you do things.
3. Embrace ESG (Environment, Social and Governance)
“Future board members will need to be ready and able to discuss ESG issues, respond to changing ESG priorities, and embed ESG in their organisation’s strategy. ESG will dominate boardroom discussions in the future - board members must acknowledge this.” ESG stands for “Environment, Social and Governance”, and refers to the growing public expectation that businesses should take account of the interests of communities and wider society. The Governance Institute report notes, at page 11, that “a lack of ESG-awareness led to the recent royal commission investigations in certain sectors. In light of these observations, boards need to have more open discussions about ESG issues.”
ESG issues that aged care boards should be discussing include, of course, the wellbeing of consumers. But other issues worth discussing might include staff wellbeing and environmental impact and wastage.
4. Know How to Add Value
“Future board members will be valued for their ability to think strategically and to apply an ethical lens to decision-making. They will need strategic, leadership and management skills. They should recognise and promote the benefits of diversity of lived experience in the boardroom for improved decision-making and to mitigate groupthink.”
The Royal Commission into Aged Care Quality and Safety criticised the aged care industry for inadequate board independence, transparency and accountability. In response, the Commonwealth Government will be imposing new requirements on aged care boards in 2022.
Now is the time for aged care providers to consider the composition of their boards. Do the members bring a diverse set of skills to the table? Are the members sufficiently independent? Are there any conflicts of interest?
5. Be Honest About Time Commitments; Seek Out the Right Pay
“Future board members will need to be honest about whether they have sufficient time to dedicate to each board they serve. Appropriate remuneration will be key to empowering board members to make the right decisions about the time they can dedicate to the positions they hold. Board positions should not be reserved for the wealthy.”
As noted above, now is the time for aged care providers to consider whether their board members have the time and remuneration required to do their jobs properly.
6. Take Control of Your Development
“Future board members should be proactive in setting the course of their training, mastering a mixture of soft and technical skills that will equip them to take on the varying nature of the challenges that lie ahead. It will be particularly important to develop strategic skills.”
What skills do your board members have? What do they lack? Where there are gaps, can you address these with training? To answer these questions, you may need to review the performance of the board members and the board collectively. This will help you to identify any changes that need to be made to the board’s composition and any other actions that need to be implemented.
7. Work More Closely with Management
“As they face increased accountability for the actions of their organisation, future board members will need to be comfortable working closely with management. They will need to help management with operational issues but not become involved in day-to-day management.”
How well does your board know the management staff? Regular meetings between the board and staff are a good way to develop the relationship, but another good place to start is with reports. Through regular reports, the board can get a better idea of which operational issues need their attention. It’s up to the board to identify and communicate what they need to know, so that management can help them access useful reports.
8. Be Bold with Risk
“Future board members will need to take a bold approach to risk management, being willing to take more calculated risks. They should be mindful that risks bring opportunities as well as threats and avoid overemphasising the threats at the expense of realising the opportunities.”
Aged care providers should view this advice with caution. While risk-taking in other industries may lead to a dip in the stock-price, risk-taking in aged care can lead to injury and even death. It is also a heavily regulated industry where risk-taking can attract severe legal penalties.
But caution should not be used as an excuse to avoid change. Again, the core goal of providing care must remain fixed, but the means of achieving that goal can, and should, be flexible. Whether you are embracing new technology, learning a new procedure or opening yourself up to feedback, you may sometimes have to make a bold change to ensure the best care for consumers.
