Brakes Help to Make a Car Go Faster!

Fri, Aug 24 2018

At a recent Association of Corporate Counsel Australia panel discussion on ethics and governance hosted by Copyright Agency, the panellists commented on the common litmus test of asking the organisation’s CEO how he or she would to feel if something of potential concern ends up on the front page of the newspapers.

At the personal level, another approach is to ask yourself how you would feel about telling a friend or relative about a questionable practice. If you would feel embarrassed to talk about it - it’s probably not a good thing to do.

Recent disclosures of corporate misconduct during hearings of the Banking Royal Commission and the like indicate a large number of people across many organisations have not been asking either of these questions, and have not paid much attention to their organisation’s governance policies.

The panellists all agreed that incredibly detailed governance policies are ineffective because they will be ignored.  Governance policies should aim to meet the standards but without too much red tape otherwise they will not be read and understood, and their implementation will not be effective.

David Field, Chief Legal Counsel for Canon Australia, provided a fresh insight into the benefits of having good governance policies. He asked, ‘What are the brakes on a car for?”

His reply was, “To allow the car to go faster.”

His analogy was that rules and regulations, rather than always slowing things down, actually help to make things happen faster because you can have confidence that you are doing the right thing. And if something unexpected happens, you will be able to stop and change direction before anything goes too wrong.

David said, “One of the ways to avoid pitfalls is to look externally at various case studies and apply them to your own environment. We can learn from other people’s mistakes and hopefully avoid making them ourselves.”

“In the case of the Australian cricket team’s ball tampering incident, the failure of the team’s leadership to live up to their obligations to their team-mates, the game and their country provides an object lesson.  The team leadership has been judged very harshly by the community and enormous damage has been done to the reputation and brand of Cricket Australia.”

From information provided to PRIA by Copyright Agency.