Why you need to be a part of the knowledge economy
Natural capital risk and the Federal Budget: An emerging governance gap
From insight to oversight: How boards can harness AI without losing the human edge
How to avoid dysfunction junction and find team synergy
Why are leaders holding back from seeking psychosocial support?
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All expressions of opinion in this journal are published on the basis that they are not to be regarded as expressing the official opinion of Governance Institute of Australia, unless expressly so stated. Governance Institute of Australia, authors and all persons involved in the preparation and distribution of this journal, are not thereby giving legal, accounting or other professional advice and hence do not accept any responsibility for the accuracy of any of the opinions or information contained in the journal. Readers should not act or refrain from acting on the basis of opinions or information without first taking appropriate professional advice in respect of their own particular circumstances. Governance Institute of Australia does not accept any liability to advertisers for the publication of advertisements which may be held to be contrary to law. Material published in is copyright and may not be reproduced without permission. Governance Directions
Embedding accountability in governance and risk frameworks
WA Tuesday, 6 May 2025 - Pan Pacific, Perth
SA Thursday, 8 May 2025 - U City, Adelaide
QLD Wednesday, 14 and Thursday, 15 May 2025 - Hotel Grand Chancellor, Brisbane
VIC Thursday, 22 and Friday, 23 May 2025 - Sheraton, Melbourne
NSW Thursday, 29 and Friday, 30 May 2025 - Intercontinental, Sydney
The world of work is being reshaped, and knowledge is becoming a powerful currency.
To stay relevant and competitive, individuals and organisations must shift from traditional models to ones driven by knowledge, innovation and human capital.
Knowledge economies are centred on intellectual capital, human expertise and intangible assets such as innovation, research and proprietary technology that shape how advanced societies produce, compete and grow
Currently, only 34% of Australians are classified as knowledge economy workers compared to about half of American jobs being defined as such.
But as AI transforms how value is created, are you equipped to evolve with the economy, or are you at risk of being left behind?
Being part of the knowledge economy gives you access to opportunities you may not otherwise have
New ideas, scientific discoveries and new technologies stimulate disruption and drive new job creation and career advancement options.
The knowledge economy is dominated by service industries that are highly interconnected, with best practices, expertise and innovations shared globally, creating opportunities for travel and more challenging or transferable roles.
Knowledge economy workers are uniquely positioned to evolve and realise their value in a fastdeveloping world. But the ground is shifting.
The 2025–26 Federal Budget maintains Australia’s trajectory toward climate and environmental stewardship but continues to underdeliver against international benchmarks.
While notable increases are evident in clean energy, drought resilience, and biodiversity protective measures, funding for disaster preparedness and natural capital investment remains below the levels required to build the required landscape and community resilience
When compared to the 2024–25 Budget, modest gains have been made, yet funding ratios remain skewed toward recovery rather than prevention, and Australia’s climate and biodiversity investments still trail OECD peers
Over recent federal budgets, Australia has increasingly acknowledged the importance of environmental sustainability, climate resilience, disaster preparation and natural resource management However, this recognition has not yet translated into scaled or coordinated investment in natural capital, the environmental assets that underpin economic, agricultural, and social systems. As natural capital risks intensify and frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD) reshape governance expectations, this article examines whether current Federal budget priorities reflect the scale and urgency of the challenge. It identifies a growing misalignment between public investment and environmental risk, pointing to an emerging governance gap that warrants greater attention from policymakers, boards, and public sector leaders.
The Budget outlines a suite of investments aimed at bolstering drought resilience, sustainable agriculture, and long-term water security
Future Drought Fund (FDF): Continues its $100 million annual disbursement, including $935 million for farm business resilience and regional partnerships consistent with last year’s funding level ($519.1 million over eight years).
National Water Grid Fund: A $2.7 billion commitment over 12 years is retained, with an additional $87.7 million allocated in 2025–26 to the Cairns Water Security Project and rainwater infrastructure for First Nations communities.
Agricultural priorities: $45.2 million across initiatives such as trade engagement, pest management, and food security planning, with more targeting than 2024–25 but no increase in scale.
In addition to the headline $452 million package for agricultural priorities, the 2025–26 Budget includes a suite of targeted investments that sustain key areas of farm productivity and biosecurity These include $60 million for the National Soil Action Plan, $180 million for sustainable reef fisheries, $1487 million for pest and disease preparedness (particularly in Queensland), $67 million for fruit fly resilience, and $12 million for national plant health surveillance Forestry strategy development ($06 million) and ongoing support for sheep and goat traceability also feature. While individually modest and largely continuations of previous programs, these investments demonstrate the operational reach of the Commonwealth’s agricultural spending, even as larger-scale transitions such as net zero farming and natural capital market development remain largely underfunded.
The 2025–26 Budget reinforces Australia's climate transition framework with selective new investments and continuation of major infrastructure programs Key measures include:
A $2.0 billion recapitalisation of the Clean Energy Finance Corporation (CEFC) to expand investment in renewable energy and clean technologies. $489.4 million to expand the Social Housing Energy Upgrade Initiative, supporting energy efficiency improvements for low-income households. Ongoing operational support for the Rewiring the Nation program, although no additional funding allocations were made in this budget cycle.
A broader $632.5 million package across the forward estimates to support climate adaptation and disaster resilience, including infrastructure upgrades and risk reduction initiatives.
While new climate mitigation spending remains targeted, the larger fiscal settings for climate adaptation and resilience continue to evolve, with implications for longterm risk management, asset resilience, and governance disclosure obligations
However, total annual investment remains approximately 012% of GDP, well below the World Bank’s 1–2% recommendation for climate transition financing As discussed in my 2024–25 budget analysis, this figure represents only one-tenth of what is required for a low-emissions transition based on global benchmarks¹.
Conservation and ecosystem health remain a priority - at least rhetorically - with several positive announcements:
The persistent underinvestment in resilience, biodiversity, and climate mitigation continues to pose a material risk to national sustainability objectives. Governance professionals and policy advisors, particularly in the for-purpose sector, must look beyond Commonwealth (and State) expenditure and explore more strategic mechanisms:
Private market mobilisation: How can we de-risk natural capital investments for institutional capital? Public-private co-investment: Can regional NRM bodies and climate partnerships serve as intermediaries for place-based finance? Integrated risk governance: What frameworks can boards adopt to reflect climate, water and biodiversity dependencies in enterprise risk assessments?
As in my 2024–25 analysis, the most strategic question remains: can we afford not to invest at benchmark levels in the systems that support food, water, energy, and health?
Budget 2025–26 extends many of the environmental themes of its predecessor, but the fundamental structure of under-resourcing persists.
Disaster preparedness, biodiversity, biosecurity, and climate adaptation remain chronically underfunded Climate and water investments show signs of maturity, but lack the scale required to meet the moment
Notably, natural capital, defined as the stocks of environmental assets such as soil, water, biodiversity, and ecosystem services that underpin agricultural productivity and ecological resilience, remains underutilised as both a policy lens and an investment category.
While some budget measures indirectly support natural capital outcomes (e.g. Landcare, soil programs, and habitat protection), there is no overarching strategy or valuation framework driving its integration into fiscal decision-making.
This continues to limit Australia’s ability to align economic planning with ecological sustainability Without a major shift in the coming years, particularly in how environmental risk is financed, governed and accounted for, Australia’s resilience may lag dangerously behind the risks it faces
¹ Guerin, T. (2024). Gaps in Budget Funding for Nature, Governance Directions, July 2024, Governance Institute of Australia.
Dr Turlough Guerin is an Honorary Fellow at the University of Melbourne, Former CEO Landcare NSW and Former Chair, Ag Institute of Australia and can be contacted at turlough.guerin@hotmail.com or on 0439 011 434.
AI enhances board efficiency and decision-making while preserving critical human judgment
Sponsored article
For today’s boards, the ability to make sound, strategic decisions have never been more complex or more critical Directors must navigate shifting regulations, growing stakeholder expectations and an unprecedented volume of data. In this highly pressurised and time-sensitive environment, artificial intelligence is emerging as both a powerful tool and a source of uncertainty.
As boards begin to adopt AI into their governance toolkits, regulatory attention is intensifying. In Australia, the federal government is consulting on mandatory safeguards for high-risk AI systems, emphasising transparency, human oversight, and responsible use.
AI can process data, but it lacks moral reasoning Board decisions often involve ethical considerations, a deep understanding of and connection with corporate values and long-term strategic vision: areas where human judgment is essential.
AI may recognise patterns in data, but it does not understand the nuances of human relationships, corporate culture or stakeholder expectations. Directors rely on their experience and interpersonal skills to navigate these complexities.
AI can assist in governance, but responsibility for decision-making ultimately rests with directors and executive leadership Boards must ensure that AIgenerated insights are critically assessed and aligned with the organisation’s mission, regulatory requirements, and fiduciary duties.
Use AI to enhance irreplaceable human expertise: Ensure AI tools are integrated as decision-support mechanisms rather than decision-makers.
Choose secure, purpose-built AI solutions for governance: Not all AI tools are created equal Opt for software that prioritses data security, accuracy and ethical AI principles
Maintain transparency and oversight: AIgenerated insights used in the boardroom should always be clearly labeled, allowing directors to assess their relevance and reliability
Invest in director education on AI: Boards should understand AI’s capabilities and limitations to use it effectively in governance. Find out more about the AI Ethics & Board Oversight Certification.
AI is already reshaping governance by making board processes more efficient and data-driven. But the strongest boards will be those that recognise AI as a tool, not a proxy for human leadership. The future of boardroom decision-making isn’t AI vs. human judgment, it’s AI and human judgment, working together to drive smarter, more strategic governance.
Ready to explore how AI can enhance your board’s decision-making? Download our report on Putting AI to Work and learn best practice tips for implementing AI into your governance workflows.
While the board is a professional forum, its effectiveness is underpinned by trust, respect, and collegiality. Boards are, after all, human systems. Without a sense of connectedness and alignment, even the best governance frameworks can fail to deliver impact. Investing in relationships means making space for social connection through regular check-ins, shared experiences, informal conversations, and time spent understanding each other’s values and motivations. Boards that trust each other communicate more openly, challenge more constructively, and recover from setbacks more quickly
Board synergy is not accidental. It is the product of conscious effort and commitment to prioritising both board processes, and board functioning. When a board moves from dysfunction to synergy, the organisation benefits from leveraging the full capacity of its collective wisdom.
If your board is sensing friction, disengagement, or inefficiency, see it not as failure but as feedback. Dysfunction is a signal that the dynamic needs realignment. With intention and leadership, you can transform your boardroom from dysfunction junction to a site of renewed energy and focus.
Stephanie Bown is a performance partner to leaders and leadership teams. She delivers talks and programs that transform the way leaders connect, align and inspire. She is the author of two books on high-performance; Curious, Connected & Calm: How leaders are better together, as well as Purpose, Passion & Performance: How systems for leadership, culture and strategy drive the 3ps of highperformance organisations.
For more information, visit www.stephaniebown.com
By Dr. Siew Fang Law & Hannes van Rensburg
By advocating to shift from apathy to care at Board level, you can influencing positive cultural change through your power as a Board member
The Board plays a pivotal role in supporting the emotional health of your leadership team By setting the strategic direction that foster a culture of care from the very top, you can help break down the stigma surrounding psychosocial well-being in leadership. This includes promoting a companywide commitment to well-being and ensuring that psychosocial support is available to all employees, including your senior leaders.
In addition to informally showing care to the leadership team, you may consider establishing a culture of care governance framework at the Board level This way, the Board can set the tone (and direction) by prioritising psychosocial well-being within the organisation’s systems, structures, and culture, and openly governing it
Besides that, you could establish a culture of care board committee to focus on improving psychosocial outcomes and performances, enabling more effective consideration of these complex issues and efficient use of directors’ time, ultimately making recommendations to the Board. The committee will provide an oversight over the strategic plan of action, indicators, and metrics that prioritise senior leadership and workforce psychosocial and cultural transformation agenda.
You may consider including ‘a Culture of Care’ as an agenda item on the Board meetings for at least 12 months This could create and hold space for the committee and senior leadership team to proactively take steps, with support, to systematically reverse the downward spiral of psychosocial implications in the workforce to an upward spiral trend
In addition, you may recommend or advocate for providing specialist professional support, such as executive coaching, mentoring, peer support programs, and counselling services that specialise in executive leaders’ psychosocial well-being.
You may also create space for one-on-one ‘catchups’ on personal and professional growth to demonstrate that you value leaders as whole people, not just figureheads
Government could be doing more to establish the fundamentals for a productive, competitive and resilient business environment.
Executive burnout is a hidden crisis that trickles down Therefore, caring for leaders is not only a moral responsibility, it is a strategic imperative
We believe that care is far more powerful and effective in ensuring everyone feels safe in their workplace than relying on fear-based or compliance-driven leadership approaches. Let the Board create a movement of care that positively changes the lives of many under your governance.
Dr Siew Fang Law is a social psychologist and peace psychology expert, passionate about fostering systemic care in individuals, organisations, and communities. Hannes van Rensburg is a leadership coach and former senior executive in the chemical, mining and metals industries, dedicated to cultivating caring, connected leadership to inspire positive change. Together, they bring their combined expertise and personal experiences to champion a movement of care, offering practical tools and insights to transform lives and create a more compassionate world. Their book, The Power of Care, is available for order via wwwBentoBoxOfCarecom
FGIA FCG
by CATHERINE MAXWELL General Manager, Policy & Advocacy, Governance Institute of Australia
GIA Submission – ASIC Discussion Paper: Australia’s evolving capital markets
ASIC’s Discussion Paper seeks engagement from Australian capital markets participants, their advisers and other interested persons on issues and implications arising from evolving changes in Australia’s capital markets. The Paper set out ASIC’s questions to assist it in continuing to build its understanding of evolving market dynamics and invites actionable ideas on regulation that to enhance the operation of Australian capital markets.
Our Submission expressed support for the proposition that it is critical that Australia remains an attractive place for investment and welcomed the Discussion Paper’s consideration of issues and implications arising from Australia’s evolving capital markets Our Submission expressed members’ concern that the size and relevance of the Australian Securities Exchange (ASX) as a share of global market capitalisation has been in consistent decline.
We challenged ASIC’s suggestion that the downturn in the volume of initial public offerings (IPOs) is more likely cyclical than chronic. We expressed the view that this decline is more likely the result of domestic policy settings and regulatory creep and complexity which have made it less attractive to list on Australia’s public market
Our members consider the ASX Listing Rules are part of a broader issue stemming from the unnecessary complexity and lack of coherence of Australia’s Corporations Act 2001 This impedes the way in which stakeholders interact with companies, including the way in which the ASIC administers the Act and enforces its powers
8. Impose a lifetime default tenure limit of 10 years for non-executive directors of APRA-regulated entities and to require regulated entities to establish a robust, forward looking process for board renewal.
Governance Institute will make a submission to the APRA Review and will keep members informed about developments.
ASIC - Australia’s evolving capital markets: A discussion paper on the dynamics between public and private markets – 2 May 2025.
by Catherine Maxwell General Manager, Policy & Advocacy, Governance Institute of Australia
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