Date posted: 13/01/2022

Good governance is no longer a box-ticking exercise

"Investors are looking for increased transparency and sophisticated risk management post pandemic." – Katelyn Adams CA

In brief

  • Katelyn Adams CA advises companies on capital raising, remuneration and employee incentive plans.
  • She says risk management and corporate transparency are increasingly driving strategic decisions.
  • Post-COVID, companies have put a focus on workplace risks they can control, such as staff retention.

By Johanna Leggatt

Katelyn Adams CA is well acquainted with the economic shockwaves and uncertainty caused by COVID-19. But post lockdown, the corporate adviser sees opportunities aplenty for companies committed to transparency and good governance.

“I think it’s an exciting time. There seems to be a renewed energy, especially in the listed space, as there’s a lot of money floating around,” Adams says. “I’m enjoying that investors are now really seeking to understand how a company’s inner cogs work.”

A partner with HLB Mann Judd in Adelaide, Adams moved from audit into corporate advisory a decade ago and works with large, listed companies – as well as start-ups in the listing phase – on capital raising and governance, remuneration negotiations and employee incentive plans.

She has noticed risk management and corporate transparency are driving strategic decisions as we enter the post-pandemic recovery. It’s no longer some box-ticking exercise to undertake before listing on the ASX.

“While good corporate decision-making was always in the background… now companies are really looking at their policies, making sure they work and understanding their risk-management systems.”

Katelyn Adams CA

Katelyn Adams CA says as well as risk management, ESG issues are important for investors post pandemic.

Risk management in recovery mode

After the seismic shifts unleashed with COVID-19, companies are intensifying their focus on the workplace risks they can control, including staff retention, she says.

“We’re seeing a lot of key-person risk as people move on from roles, so having a mitigation and succession plan around that key person is important.”

Companies are also moving beyond basic health and safety policies to factor in risks to mental health. “Directors and senior executives are personally liable for the health and safety of their employees and their consultants and are now feeding that concern into all their underlying policies,” she explains.

But by far the number-one concern for Adams’ clients is the growing spate of cyber attacks as criminals take advantage of new working-fromhome arrangements and porous IT systems.

“Cybersecurity is the top concern for everyone because it’s so unknown, it’s shifting all of the time and is so dynamic,” says Adams.

“The larger companies probably have it covered, but ones that don’t have that internal IT have been going back and really considering their risk.”

As the economic recovery grows and shifts shape, company risk management strategies will need to be revisited regularly, she says.

“If COVID has taught us anything it’s that we can’t rely on anything staying the same, it’s rapidly changing all the time.”

The future is transparent

Another big change she has noticed is investors demanding transparency that extends beyond a company mission statement. They want to see real action on a company’s core values to better understand the business they’re buying into.

This is where her experience with companies across diverse sectors is invaluable for her clients. She is a non–executive director of kingfish grower Clean Seas Seafood and company secretary on several ASX-listed boards – including potash producer Highfield Resources, medical technology start-up PlasmaShield and Duxton Broadacre Farms.

“Previously, some boards had not discussed what their core values were, how they filter through the company and how they project them externally and internally,” she says.

She emphasises that potential investors are now looking for company values that include a clear environmental and social governance (ESG) policy.

“In the future we will see even more ESG committees formed at board level and, I think, a massive rise in ESG consultants,” says Adams.

These ESG committees must outline objectives for achieving their stated goals and show, in measurable frameworks, how they are committed to social and environmental causes.

“It’s not good enough to say, ‘we’re green’ or ‘we’ve got a diversity policy’. What used to amount to a couple of pages within an annual report will now morph into a full sustainability report, and institutional investors will increasingly demand to see it before they invest.”

"Investors are now really seeking to understand how a company’s inner cogs work."

The changing company secretary role 

Adams’ comprehensive understanding of corporate governance has been helped through her many company secretary roles in a range of sectors. It’s a board position that has changed dramatically, she says.

“Ten years ago, I would sit around the table and just take the minutes. Quite often I would even be asked to make the coffees. Nowadays, I am more of a conduit between the board and the senior executive team, and I am there to ensure a harmonious crossover between the two.”

She believes that directors, too, have changed their attitude to risk in recent times. “There wasn’t always that sense of personal risk; they relied on each other’s skills, as you do around a table of peers.

“But now they’re really taking it upon themselves to understand the risks of the company, and where once we may have put up the risk management review once a year, it’s now going to board level every single meeting.”

Foundations for success

“The calm and measured approach the CA Program teaches participants has allowed me to filter that through my entire career.”

In particular, she credits the CA Program with providing a “strong and valuable educational foundation” that is underpinned by ethics and integrity.

“I pride myself as being a trusted adviser and the program has taught me that,” she says. “Many of the companies I deal with are complex, and the management of their disclosure obligations in turn are quite complex and require careful consideration.”

Crucially, the same agility Adams applies to her clients’ market movements has been useful in her own career.

“I’ve always been very adaptable and accessible,” she says. “My job looks completely different now to how it did a decade ago, so I’ve been able to forge my own career path and turn it into quite a successful business within a large firm.”

What Katelyn Adams CA has learnt as a company secretary

Importance of governance: “Good governance is the backbone of a good company. It’s the system by which a company is controlled and operates, and the key to success.”

  • Critical thinking: “I’ve had the opportunity to observe many boards and how they assess and react to different situations. As a result, I’ve been able to refine my ability to critically assess situations and provide meaningful advice and solutions for clients.”
  • Authenticity: “Being myself, using my experience, and applying that to my professional life has been the biggest and most challenging skill to develop; however, it has been instrumental to my success.”
  • Adaptability: “No two days are ever the same, and I’m always having to change my thought direction to be able to adapt to the situation at hand. The ability to adapt and be agile ensures I remain ready for any situation.”

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