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Edition 9 August 2021

TH E PULSE E DITION 9

Genuine. Bold. Helpful.

The information in The Pulse is provided for information only and does not constitute legal or professional advice. Formal legal or professional advice should be sought in relation to specific circumstances. Printed on ecoStar+ Carbon neutral, FSC recycled certified, manufactured from 100% post consumer recycled paper.

proximity.com.au enquiries@proximity.com.au 1800 959 885 2

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A message from Director Sean King Milestones offer a unique opportunity to reflect on the past and look to the future.

We have significantly increased our advisory work—in addition to our onsite engagement model— and expanded our service offering to provide a broader range of consulting services including organisational planning, governance, digital transformation, investigations and inquiries, risk management and compliance, and policy and program development. We have also expanded geographically, with Proximity staff now located in Melbourne, Sydney, Adelaide, and Canberra.

10 years ago, we started Proximity, with the idea that there was a different way to work, a more collaborative, flexible, and multidisciplinary approach—lawyers doing more than exclusively law. In the early years of Proximity, we were mostly helping clients onsite with legal and commercial projects. However, while the original underpinnings of a collaborative and multidisciplinary approach have remained steadfast, Proximity has adapted and evolved significantly over the course of a decade.

Today, we are an industryleading provider of integrated consulting, legal and commercial services, with a team of over 100 people, working with clients all over the country on some of our nation’s most complex and highprofile projects. Our 10th anniversary has been the ideal milestone to realign our brand to better mirror who we are today and where we are going. Our updated brand (which is showcased in this edition of The Pulse) represents Proximity’s evolution over the past decade and ensures our brand reflects our culture, vision, and unique way of working— which is all about breaking the mould, going the extra mile, and having fun along the way.

I hope you love the new-look Proximity as much as I do, and if you have any feedback at all please send me an email sean.king@proximity.com.au. Reaching our 10-year anniversary has also provided a great opportunity to reflect on the people who have been part of the Proximity story and events that have shaped us. It has provided a chance to celebrate our successes and recognise how far we have come— personally and professionally. To all our wonderful staff, clients and supporters who have been with us throughout the past 10 years, thank you! What does the next decade have install for Proximity? With such wonderful staff, clients, and supporters, the future is bright. We look forward to working with you and achieving extraordinary things—together. Sean King Director, Proximity

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10 YEARS OF GOING FURTHER It was late 2011, when friends and colleagues Sean King and James Dunn officially launched Proximity. Born from the idea that there was a different way to work, a more collaborative and integrated approach— lawyers doing more than law What started 10 years ago as a two-person operation, has since grown into an industry leading professional services firm, with a team of over 100 people, working with clients all over the country on some of our nation’s most complex and high-profile projects.

The past decade has seen Proximity go from strengthto-strength, expanding our integrated service offering and multidisciplinary teams to meet rising demands and maturing to a truly dynamic supplier of consulting, commercial and legal services.

Although our vision, values and culture have remained steadfast, the past decade has seen Proximity evolve and mature. Our 10-year anniversary presented the perfect opportunity to rethink our brand and show our true colours and bold personality which is all about breaking the mould, going the extra mile, and having fun along the way.

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The rebrand process The new brand was developed through a collaborative process and reflects our people-first culture. Clients, partners, and staff were engaged to provide insight on our value proposition and points of difference.

WE SPOKE

WE SOUGHT

WE DOVE

CLIENTS AND

OUR TEAM:

RESEARCH:

WITH OUR

PARTNERS:

We talked with clients and partners to get their feedback on Proximity, the way we work, and the value we add.

INPUT FROM It was a big group effort with everyone at Proximity playing a part in creating our new brand. We hosted several staff workshops which gave our team the opportunity to shape the new look Proximity.

DEEP INTO

Looking at our operating landscape and defining where Proximity fits and our future goals.

What we uncovered We uncovered the building blocks of our narrative: what we do, how we do it, and most importantly, why.

WHAT WE DO:

HOW WE DO IT:

WHY WE EXIST:

Provide guidance, support, and collaborate with clients to overcome challenges and achieve excellent outcomes.

By creating an exceptional workplace culture, we equip our people with the confidence to find the ‘right fit’ solution for our clients.

To influence and enable people to do extraordinary work for the betterment of our community.

These insights led to the new brand vision: being a catalyst, providing momentum, and helping clients and staff to go further. This new vision is reflected in our new brand identity by movement, vivid colour and a bold new mantra: “go further.”

By changing our visual identity, our brand is now a true reflection of who we are, how we work and showcases what makes us extraordinary!

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Bringing our brand to life

Collaboration

Improvement

Leadership

Standing out

Flexibility

Learning and teaching

Success is best when shared… 6

We recognise our business, culture and brand would not be where it is today without the input from our people, clients, partners, and communities—you have been instrumental in Proximity’s development and we thank you for your support.

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C O N S U LT I N G H U B

Better Business Performance It is easy to recognise when businesses, including government organisations, become dysfunctional: bad press, unhappy clients, high staff turnover, tricky Estimates Committee hearings, just to name a few! But what can organisations do to improve their business performance? 7

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THE LANDSCAPE Organisations need to understand the map and the terrain, through which they will be making their journey to the desired destination. What rivers need to be crossed, what swamps might hinder progress, where be dragons? What is our starting point and where do we want to get to? How do we position our organisation as the provider of choice, even in an environment where our clients do not have choice? Jenifer Frederick FCPA Expert Advisor

Lots of money, effort and time is wasted in implementing the wrong organisational intervention to fix a poorly described business problem. Taking the time to understand the map, the terrain and the factors that will influence the organisation in achieving its aims is essential before rushing into action.

Today’s organisations are large scale, living systems, with complex business ecosystems and a wide range of influencers and stakeholders, living in a world of constant business environmental change. Here are some tips from the organisational development research and management literature to improving business performance. 8

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OUR FELLOW TRAVELLERS Every organisation needs to have the most effective design and job mix and the right people in place working together to do the work of the organisation. As organisations are living entities, design needs to be flexible and capable of rapid change, having regard to the labour demand and supply environment, as well as changes to its business, and from working within the business ecosystem. Many organisations use more multi-disciplinary teams that can be assembled as needed, work effectively together, and disband at the end of the project, moving on to the next project. This approach then drives the recruitment and career development components that work together that result in having the right people in the right place at the right time doing fabulous work that they love and are well remunerated for!

JOURNEY PLANS Without plans on how we are going to navigate the map and the terrain, an organisation and its people may not be working collaboratively to achieve shared aims or the shared vision. So, how do we travel together, to avoid pitfalls, get to the milestone points, and reach the destination? We need some plans! These plans need to be aligned, integrated, flexible and updated as necessary, to show how the people will navigate the journey to get to the destination. Organisational plans need to be simple and based on a simple framework, with just a few aims in each part of the frame. If people can’t remember or are unable to talk about the organisational aims that they are responsible for achieving, they are unlikely to be actively working to achieve those goals. The Balanced Scorecard Framework uses the Clients, People, Internal Business, Finance approach to organise direction, tasks and Key Performance Indicators (KPIs). Long term plans need to be split up into short term plans, whether they be 100 day sprints or annual plans, the plans also need to be articulated by organisational unit, covering all functions, and reflected by each person in their performance agreements, and all need to be closely aligned with the organisation’s Strategic Plan. Plans need to fit on a single page. Long and detailed plans get left on the shelf, but living plans need to be used often to give direction and to guide individual and collective behaviour and refreshed frequently to keep them relevant. Proximity has experienced consultants who can work with you to improve business performance and transform your organisation. Contact us on enquiries@proximity.com.au or call 1800 959 985

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C O N S U LT I N G H U B

Risk Matters An integrated and dynamic risk management framework to ensure sustained business success.

The COVID-19 pandemic created a time of unprecedented change for public and private organisations. Boards and executives moved quickly to address threats and seize opportunities, while also protecting employee health and safety. They also learnt to pivot, adopting digital and evolving to new ways of working. In this article, We look at the importance of risk management, particularly in this environment. By Ian Lancaster Principal Advisor

WHY IS RISK MANAGEMENT IMPORTANT?

The current environment is VUCA—a trendy acronym referring to conditions that are volatile, uncertain, complex, and ambiguous, making outcomes unpredictable. While VUCA requires high-quality decisions to be made at speed with imperfect information, the pandemic highlighted that many organisations maintained a static and formula driven view of risk. The problem is that risk management is not an activity that comes naturally, particularly in a VUCA environment. It’s complicated by a short-term focus, incentive conflicts, behavioural biases and blind spots. Ultimately, organisations may be caught flat-footed, as change is increasing exponentially. Therefore, the risk management response needs to be bold, dynamic and integrated.

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WHERE DO WE LOOK, FOR WHAT GOOD LOOKS LIKE? The risk management framework provides the building block to design a fit-for-purpose risk management capability that accurately reflects an organisation’s risk management maturity. As such, it is a good time to reassess current / future state risk management maturity to identify any significant gaps.

AN INTEGRATED RISK MANAGEMENT FRAMEWORK From a review of the recently revised Victorian Government’s Risk Management Framework, we can get an indicator of what matters and what may not have been adequately addressed in the past.

1. Strategy

2. Risk Appetite

3. Risk Culture

Align Strategic Planning & Risk Management

Define the Board’s Risk Appetite Statement

Demonstrate a Positive Risk Culture

Strategic risk management is critical to ensuring that the organisation is set up for success. Success is where strategy and risk management are aligned through the Board’s risk appetite, having regard to the organisation objectives and resources.

Risk Appetite is defined as the degree of risk that an organisation is willing to accept to achieve its strategy or business objectives. Strategy and risk appetite should therefore be developed concurrently, with one informing the other. This should be an iterative process, with both executives and the Board contributing.

Peter Drucker’s famous quote is: ‘culture eats strategy for breakfast’. This is not to understate the importance of strategy, but to acknowledge culture as critical to its successful implementation. However, culture is complex – it’s intangible and difficult to observe. The tone from the top must demonstrate a positive risk culture.

SO, WHAT DOES SUCCESS LOOK LIKE? Successful organisations think differently. They see emerging risks as a strategic opportunity to remain relevant and build sustainable value. Successful organisations exhibit: A longer-term planning horizon, with a dynamic and iterative change mindset. A positive language within risk conversations, translating risk into opportunity. A global perspective with data driven analysis to better understand complex risks, such as climate change and pandemics. A ‘new normal’ agile operating model that designs the work around human behaviour and staff wellbeing. More than ever, organisations need to think differently. Transforming your risk management framework is the refresh button, enabling you to rethink your approach to strategy, risk, opportunity, and value.

Need assistance conducting a gap analysis or maturity assessment? At Proximity, we understand the need for a dynamic and integrated risk management approach and see immense upside, with benefits to ensure you: Are equipped with the right information to make informed decisions in real-time. Deliver on strategy in challenging times. Proactively manage and leverage opportunities from emerging risks. Take advantage of business opportunities, with confidence.

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C O N S U LT I N G H U B

Three phone owners walk into a bar

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Three phone owners walk into a bar. The first orders a craft beer and indicates he will pay by credit card using the Wallet app on his iPhone. He entered the credit card details into the app some months ago and no longer carries a physical card around. If someone stole his phone, they’d need a passcode to get the credit card details. The bartender rings up the price, the customer holds his phone above the near field communication (NFC) logo on the point-of-sale terminal and then authorises the Wallet app to make the payment with his fingerprint. By Simon Taylor Special Advisor

As the bartender retrieves a clean glass from under the bar a piece of hardware within the phone, the ‘secure element’, releases a token comprising a string of numbers. The token (or ‘Device Account Number’) was allocated to the customer when he first entered the credit card details into the Wallet app. It’s quite distinct from the numbers and details embossed on the physical credit card but it will act as a proxy for those details provided it’s accompanied by a valid cryptogram, which is also generated by the secure element in the phone. The combined information is transmitted from the phone’s NFC chip to the point-of-sale terminal. In the blink of an eye it moves onwards to the pub’s bank, the ‘acquirer’ in this particular fourparty1 transaction. From there it’s conveyed to the financial institution which issued the card (the ‘issuer’) or (more likely) a service provider acting for the issuer. The issuer, or service provider, verifies the customer’s details by confirming the token and the validity of the cryptogram, and confirms that he has sufficient funds to pay. The acquirer (the pub’s bank) can now credit the pub’s account with the price of the beer. And you thought ordering a beer was simple, timeless transaction! In due course the acquirer will be paid by the card issuer who will bill the iPhone owner. Most of these steps would occur in some form in the course of an ordinary four-party credit card transaction using a physical Visa or Mastercard. However, if this is done using a digital wallet, it will be very difficult for any electronic eavesdropper to glean exploitable information and there will be no details of the customer’s physical card on the pub’s computer server.

The Parliamentary Joint Committee on Corporations and Financial Services, and a number of foreign regulators, are looking into Mobile Wallets and Digital Payments, and the Reserve Bank and ACCC are watching closely. What’s the story?

The learned bartender is pleased this all happened quickly and securely, and in awe of the way Apple has engineered the technology, but she has some qualms. She’s heard that Apple has agreements with credit card issuers under which it gets a slice of the interchange fee normally charged on transactions between 1

The four parties are the card-holder (customer), the merchant, the acquirer (the

merchant’s financial institution, which will generally be an authorised deposit-taking institution and the card issuer, which will generally be the card-holder’s authorised deposit-taking institution.

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issuers and acquirers involving credit or debit cards. It’s said that these agreements prevent the issuer from passing the fee taken by Apple on to merchants. But can one be sure? Apple, and the banks it transacts with, are very reluctant to disclose the terms of these arrangements. An avid reader of the Reserve Bank’s payment standards, she knows that the Reserve Bank has been trying hard to get interchange fees down and has had some success2. Perhaps they would be even lower were it not for payments to Apple. If the Apple fee can’t be separated out and passed on to merchants then merchants can’t separate it out and pass it on to individual iPhone-paying customers. Are iPhone-toting boutique-beer drinkers being subsidised by customers who use physical credit cards or other payment methods to buy Fosters? The bartender also knows that Apple is very discerning about the apps in its store and that only Apple’s own software can be used to directly interface with the iPhone’s NFC controller. Would transaction costs be lower if other developers’ and financial institutions’ apps were allowed direct access to the NFC controllers in iPhones?

See https://www.rba.gov.au/

payments-and-infrastructure/ review-of-card-paymentsregulation/pdf/standard-

no-1-of-2016-credit-card-

interchange-2018-05-31.pdf

and https://www.rba.gov.au/

payments-and-infrastructure/ review-of-card-payments-

regulation/pdf/standard-no-2-of2016-debit-and-prepaid-cardinterchange-2019-05-31.pdf. 3

Applications A9146 & A9147

brought by Bendigo and Adelaide

Bank, Commonwealth Bank, National Australia Bank and Westpac (where the banks were refused permission to collectively bargain with, and

collectively boycott, Apple with a

view to gaining access to the iPhone NFC chip so they could offer their own integrated digital wallets). 4

Anti-Money Laundering

Directive (AMLD5) which inserted 58a of the German Payment Services Supervision Act

(Zahlungsdiensteaufsichtsgesetz -

ZAG). See: https://www.bundesbank. de/resource lob/836488/4b807b6a0 a7eb3188cd8f4329fc04473/mL/

payment-services-oversight-actdata.pdf

The bartender knows that none of this is black and white. Assuming it’s correct that digital wallets are reducing credit card fraud, this should help lower financial institution fees. And no business model, not even Apple’s, is ‘forever’. That goes for other payment systems that rely on NFC chips and interact with four-party card schemes as well. As the ACCC noted a few years ago3, things can move very fast in this space. Quick Response (QR) code scanning is used in China and elsewhere in Asia and it may pose a challenge to NFC technology, as may ‘bluetooth low energy’ technology. So-called ‘stored value’ cards have been making inroads. And tech companies are working on ‘stable coins’ (virtual currencies tied to a predictable benchmark to provide some certainty as to their value) which might challenge the fourparty card schemes one day, but don’t hold your breath. Anyway, it’s common knowledge in this particular pub that the Parliamentary Joint Committee on Corporations and Financial Services is holding an inquiry into Mobile Wallets and Digital Payments. A number of Australian and foreign regulators, especially European regulators, are also looking at whether software developers should have more freedom to design apps that interface with Apple’s NFC controller, and Germany has already passed a law to this effect, the so-called “Lex Apple Pay”4. Let them handle it, the bartender thinks. Customer number two orders a cider and pays using Google Pay on an Android phone. The card in his digital wallet is a dual-branded debit card. It can be used for payments through the domestic EFTPOS payments scheme or through one of the international schemes, either Visa or Mastercard. The customer pays using the digitised version of the card in one of those capacities (let’s say in its capacity as a Visa debit card). The sequence of events is similar to when the first customer paid using his iPhone, but there are some differences. This particular Android phone doesn’t have a builtin secure element like the iPhone. Instead, an encrypted token is retrieved from the cloud and then transmitted from the phone, via its NFC controller, to the terminal and beyond. An interchange fee applies, as it would for a debit card transaction using a physical card, but apparently Google doesn’t get a slice of that. And Google has released the source code for Android and the documentation

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relating to the NFC controller’s ‘API’ or Application Programming Interface details. This means that third party developers and financial entities can and do develop apps that engage directly with the NFC controllers in Android phones. All this sounds positive. But in her spare time the bartender has been reading the Australian Retailers Association’s (ARA) submission to the Parliamentary Committee’s inquiry into mobile wallets and digital payments. The ARA contends that Google and Apple need to do some work to ensure that their digital wallets allow merchants to route payments made by dual-branded debit cards in the way that’s cheapest for the merchant, whether that be through the EFTPOS track or via Visa/Mastercard. For the last couple of years, clever software in the pub’s point-of-sale terminal has automatically directed payments into the least-cost system when a customer pays by ‘tap and go’ with a physical dual branded debit card. However if that same card is scanned into a digital wallet, the customer will have to choose (either actively, at the point of sale, or by setting a default in the phone app) whether to pay through EFTPOS or Visa/Mastercard. According to the ARA, there’s nothing that can be done by the bartender or software in the terminal to override that choice. The bartender also wonders what personal information Google might be gathering when a customer uses Google Pay. Google says it does not collect information about customers’ spending through Google Pay information in Australia5. The cider drinker assures her that, even if it does, he has read Google’s privacy policies and played around with his Google account dashboard, and he reckons he has a lot of control over the personal information retained by the company. Anyway, he likes being targeted with ads about cider, so what’s the problem, and could he have another please? Maybe there isn’t a problem, but everwatchful regulators never seem to be sure. In walks customer number three. She has an old 3G flip phone running the venerable Symbian operating system. It has no capability to make digital payments or do anything much apart from make calls and maintain her T9 texting skills. She takes a physical dual-branded debit card from her purse, orders an orange juice and pays by ‘tap and go’. Software in the point-of-sale terminal routes the transaction through the scheme that’s the least expensive for the merchant. The bartender is happy. No participant pays an additional fee to a tech company and the customer is unlikely to be targeted with ads about orange juice. The customer actually feels a little smug thinking that she’s just made a relatively efficient payment and has a real purse full of real credit cards. But, hang on… where is her purse? Didn’t she just put it on the bar?

Transcript of Parliamentary Joint Committee hearing on Mobile Wallets and

Digital Payments, 26 July 2021, p 50.

Proximity has experienced consultants who can work with you to improve business performance and transform your organisation. enquiries@proximity.com.au or call 1800 959 985

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LEGAL HUB

A minimum standard of transparency

De-mystifying the National Security Information (Criminal and Civil Proceedings) Act 2004 By Briony Martin Special Advisor

The National Security Information (NSI) Act transcends the usual national security agencies. The definition of national security information under the Act and its pervasiveness throughout government and private enterprise makes the NSI Act relevant to all departments, agencies, corporations, and legal practitioners.

WHY DID WE NEED THE NSI ACT? Put simply, the intersection of two worlds: the intelligence community and the justice system. There are many new legal and security challenges in bringing the intelligence community into the court room, however, none more contentious than the protection of national security sensitive information. The advent of the NSI Act was borne from the push-pull of protecting sensitive national security information and the interests of prosecuting those that commit offences. Inconsistent and unreliable protections didn’t work for complex matters that relied on national security sensitive material.

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COMPETING IMPERATIVES—CHALLENGES FOR THE NSI The NSI needs to provide appropriate and practical safeguards to protect the public interest in both the provision of justice and national security. Rights of the accused – protection of key principles of the justice system

Protecting against disclosure of national security sensitive information and government’s ability to provide a safe and secure Australia

The accused’s right to a fair trial and natural justice.

Identifying to foreign powers the capabilities or limitations and methodologies of Australia’s intelligence agencies and defence arrangements.

The principle of open justice and public hearing.

Undermining international and diplomatic relations.

‘Equality of arms’ – between parties to the case.

Endangering the ongoing exchange of security information with domestic and international partners.

A full statement of the reasons for any decisions or judgement.

Undermining security intelligence operations and endangering lives or wellbeing of officers and informants.

Procedural protections.

Confirming the existence of matters which could otherwise be the subject to speculation.1

WHY YOU CAN’T IGNORE THE NSI ACT The way in which national security information is dealt with in legal proceedings has reared its ugly but unavoidable head. Recent examples are popping up and there will be more prosecutions that invoke the NSI Act to come.

Understanding the NSI Act and seeking early advice is now crucial for many reasons: The Act departs from the usual understanding of the rules of evidence There are criminal offences attached to breaching the Act Individual legal practitioners may need to undergo a security vetting process Practical measures for the handling and storage of national security information may need to be put in place early in the pre-trial phase.

From the government perspective, departments and agencies, as the custodians of national security information, will need to be actively involved in decision-making throughout the stages of relevant legal matters to ensure they manage their legal and security obligations appropriately. Balancing the responsibility of the Commonwealth’s obligation to act as a model litigant2 with security is a heavy burden on senior officials and one that holds the weight of the Australian Constitution and the credibility of public institutions.

Professor David Weisbrot, ALRC President, ‘Justice system must adapt to meet terror challenges’

(Media Release 2306, ALRC 23 June 2004) in Chapter 45 Protection of national section information,

Comprehensive Review of the Legal Framework of the National Security Community Review by Mr Dennis Richardson AC, released 4 December 2020. pg 91. 2

Legal Services Direction 2017, Appendix B, The Commonwealth’s obligation to act as a model litigant.

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LEGAL HUB

Getting Industry Engagement Right

Ingrid shares some practical tips to engage with industry stakeholders, without falling afoul of some key legal and probity requirements. By Ingrid Bremers Senior Advisor

Early industry engagement is critical to government deriving innovative, collaborative and leading-edge solutions from the market. It is in the interest of government and industry to leverage the benefits of continuous information sharing, reducing procurement costs, and defining a clear and achievable path forward. Industry engagements that are poorly planned or executed can go horribly wrong. Nobody wants to waste valuable time and energy, or jeopardise the probity and integrity of a procurement process. Poorly planned or executed industry engagements can result in serious reputational risk, poor value for money outcomes, and significant time delays for government and industry.

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WHAT ARE SOME METHODS OF EARLY INDUSTRY ENGAGEMENT?

There are a range of different ways to promote engagement with industry. Common methods include:

Horizon Scanning Horizon scanning typically involves broader strategic discussions with industry about market, economic and political conditions, including potential opportunities and threats.

Indicative approaches to market (e.g. Requests for Information) This involves a more structured and formal indicative approach to market and seeking feedback from industry.

Market research/soundings Market research can involve engaging with industry to understand whether a competitive market exists for the proposed procurement activity, the ability of industry to deliver the capability, as well as feedback on trends, delivery models and future capabilities. Bidder conferences/ industry briefings Conferences or briefings with bidders (suppliers) occurs after a formal procurement has commenced. It allows the buyer to elaborate on the procurement activity, while also allows bidders to ask questions about commercial and technical aspects and risks. Source: https://buy.nsw.gov.au/buyerguidance/before-you-buy/industryengagement/types (2020)

“There was a consensus among industry stakeholders that collaboration between government and industry over ICT procurements was poor and must be improved. Industry stakeholders pointed to agencies’ strict interpretation of probity requirements as being responsible for excluding many types of engagement with industry.” Digital Transformation Agency - Report of the ICT Procurement Taskforce (2020)

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SET YOUR OBJECTIVES Are you crystal clear about what you are trying to achieve through industry engagement? Consider if you are: simply looking to discuss potential opportunities, developments, weaknesses, and threats in the market (“horizon scanning”); looking for more specific feedback to test the viability and feasibility of a concept; or looking for something that may lie in-between.

MANAGE INTELLECTUAL PROPERTY

AND CONFIDENTIAL INFORMATION APPROPR IATELY

Effective management of information is essential to the success of industry engagement. It is important that you demonstrate to industry partners that you will protect their proprietary information, which will consequently encourage industry to be more open in their engagement. That said, you do not want to be hamstrung by overly-restrictive (or complex) intellectual property or confidentiality requirements, which could inhibit the benefits of the industry engagement in your procurement planning.

GET PROBITY INVOLVED EARLY Probity advisers can provide considerable value when setting up successful industry engagement activities, including establishing processes to mitigate risks for future procurements and providing decision-makers with comfort around industry engagement.

FINISHING STRONG Have you considered how you will conclude your industry engagement? You must finish strong. It is important to thank industry (who may have put a lot of effort and considerable resources into preparing for the engagement). This will help maintain a good relationship with them. This can also be an excellent opportunity to confirm expectations about further communication and interaction with industry.

We are driven to make a difference. We share our knowledge and work with you to meet complex challenges together. enquiries@proximity.com.au or call 1800 959 985

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COMMERCIAL HUB

Negotiations in a time of COVID-19

Mike Agnew looks at how things changed during COVID-19 and key learnings from having to negotiate behind a screen. By Mike Agnew Special Advisor

Negotiation typically thrives on physical presence. Handshakes, eye contact, shared meals, and long meetings in stuffy conference rooms were everyday tools of the trade—and for good reason. Research has shown that negotiators who meet in person reach better outcomes than those who negotiate online. Face-to-face meetings offer invaluable nonverbal and verbal cues, such as eye contact, body language, and tone of voice—that facilitate understanding and build lasting bonds. However, during the COVID-19 pandemic, these “normal” face to face negotiation best practices were set aside. But that did not stop deal making. Thanks to the array of communication media we have available to us—from phone calls, emails, to videoconferencing and text messages—we were able to keep doing business.

21 21

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ALTERNATIVE COMMUNICATION PLATFORMS, LESSONS LEARNT AND CONSIDERATIONS: Email

Video Conferencing

E-mail has been called an “impoverished” medium because negotiators must grasp one another’s meaning through written words alone. As a result, misunderstandings are common and sometimes lead to unnecessary conflict and impasse.

Videoconferencing is widely perceived as a “rich” communication medium because it allows people to learn from each other’s visual and verbal cues. In addition to allowing parties to communicate both verbally and nonverbally, video negotiation enables them to jointly view and discuss documents, slide shows, and videos.

Challenges: Email often poses more problems than solutions when it comes to relationships, information exchange, and outcomes in conflict resolution negotiations scenarios. One important consideration when using emails is to remember that email communicators are largely unaware of the limitations of using emails to negotiate. Benefits: Negotiating via e-mail does offer some benefits such as the convenience of creating and sending at any time (day or night). Plus, when you fear tripping up and saying the wrong thing, you can take the time to carefully craft an e-mail message. Tips: Keep emails to summarising agreed positions and action items that require attention; quite transactional communication in fact.

Challenges: In video negotiation, we see less of the other person and their environment than we do when negotiating in person. Individuals typically appear as “talking heads”, and we can’t see what’s going on off camera. The other party could be looking at something off screen, not paying attention or hiding something relevant to the negotiation. Anyone who has used videoconferences regularly over the COVID-19 period knows that technical difficulties such as trouble linking up or suddenly losing audio and/ or video is common. Even when you’re able to iron out such glitches, the flow of a negotiation has been interrupted and can leave people feeling irritated, which keep us from negotiating at our best. When the privacy of a negotiation is paramount, or security classification of the session dictates, videoconferencing may pose special concerns and limitation for participation. Although the possibility of being secretly recorded is a risk in any type of negotiation, video negotiations may be especially easy for your counterpart—or perhaps some other interested party—to record.

Benefits: The switch to virtual negotiations hasn’t been all bad, with interstate travel off the table, we found that we actually had much more time available to connect with counterparts. We learned that they could often move conversations forward without the need for time-consuming and expensive travel and formalities. With people unable to travel, interstate visits and meetings tapered off. In their place, “local representatives thrived”—staff on the ground were seen as useful assets for solid and accurate assessments. As a result, the quality of preparations for highlevel virtual talks improved.  Tips: Keep your hand gestures within the frame so that your counterpart can see them. Minimise sound and visual distractions on your end. Make sure the area behind you is neutral and professional. Dress for business. Resist the urge to check your e-mail or attend to matters offscreen as much as possible. When security is critical, but trust is low, you may want to make an extra effort to negotiate in person or keep the key commercial negotiations to be predominately face-to-face.

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Text messaging The ability of texting to connect people in far-flung locations at any moment of the day has made it ubiquitous in personal and, increasingly, business communications, despite some notable drawbacks. Challenges: Like e-mails, texts lack the rich visual and verbal cues that help us to “read” others. In addition, misunderstandings, frustration, and conflict can become more likely. Texts also lack some features of e-mails that enhance communication, including bolding, underlining, and bullet points, although we can use emojis, GIFs, and photo attachments to enhance our texts. Speaking of emojis, texts tend to be a highly informal means of communicating. The hassle of typing on a small screen and potential for errors encourage succinct messages that lack the conventions of other written correspondence, including salutations and sign-offs. As a result, texts seem abrupt and impolite to some. Benefits: Texting has some notable advantages for negotiators. It offers the ability to reach out instantaneously across the miles regarding logistics, ideas, or offers at times when a phone call might be impossible or disruptive. When combined with Video Conferencing, it provides a mechanism to immediately check in with people, receive or provide guidance to influence a discussion or negotiate a matter.

Another advantage of texting, as compared to many other media, is that it allows for both fast and slow communication. We can carry out a text conversation synchronously, like a phone conversation, or take time to think between messages and not disrupt the video conference session. Tips Proofread your messages. Misspellings and embarrassing autocorrect errors can be common in text. I had a personal experience with this, when auto-correct accidently replaced the negotiation term BATNA (Best Alternative To a Negotiated Agreement) with Baby; quite embarrassing when sent to a work colleague in a text message that when sent said, “Their position may affect our Baby”! Before hitting “send,” make it a policy to review every message for mistakes and to check that it’s going to the right person. Don’t be annoyed by the casual liberties that younger people use when texting, such as abbreviations, emojis and incomplete sentences. A similar guideline applies to long delays between text messages and messages that seem curt. Rather than worrying, consider that your counterpart may be typing under the table at a meeting, at the video conference session you are in, or unable to text at all.

WHERE

TO NEXT? After the coronavirus runs its course and socialdistancing restrictions are lifted, negotiators will once again be able to meet and shake hands. But, having experienced the ease, relative effectiveness and cost savings of emails, texts, phone and online video negotiation, many might be tempted to keep negotiation and deal making exclusively online and not face to face. That would be a mistake, as less efficient deals and more transactional relationships will be the inevitable result. During these difficult COVID-19 times, remember the importance of meeting face to face periodically to discuss how your deal is going and to brainstorm new opportunities for collaboration. The key really is to toggle between all the communication methods that are available to us today—post COVID-19. (whatever that looks like!).

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COMMERCIAL HUB

Do you need to procure a new critical technology system?

Are you the business owner of a legacy technology that is weighing down your capability to go further?

By John Pisani Special Advisor

Legacy technology can mean many things, but from a business perspective it usually means that the system is outdated and not able to move quick enough with your changing environment. These systems cannot be modified easily which means the control is not with you, it’s either with the IT Department or the software vendor. The first sign that you have a legacy system is that it’s not actually one system, it’s likely multiple systems. It probably started as one system many years ago and when a new add on was needed, the change was achieved by bolting on something which required an interface exchange of data to be maintained. It’s likely that you need someone very technical to explain why it works this way, and over time it has grown into a spaghetti of system’s that no one understands. If you are accountable for this “system”, you probably don’t sleep well, particularly if this is a critical system of core technology that your organisation is known for with the public. Eg: A government call centre doesn’t exist without a telephony system. An airline doesn’t exist without a booking system. A bank doesn’t exist without a payment platform. A hospital doesn’t exist without a patient management system.

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Any organisation doesn’t exist if it can’t access its critical data or trust that it’s moving around the organisation correctly. We know that changing critical systems can be a long and complex journey, so why would you do it? Well, you might fall into one of the following categories depending on your organisation: GOVERNMENT The government has announced a new policy reform and your department’s core system handles that operational responsibility. REGULATORY The rules and regulations your organisation must legally follow are changing significantly and your current system cannot handle the change. CORPORATE Your competitors have already modernised and are taking the market share while your operational costs are too high to sustain. Many people might think that these journeys are about technology but they are really about your own internal business processes and how to procure to meet the constraints you are under. The usual constraints are: COST Your change project will always have a limited and controlled budget (that is likely not enough!) TIME You have a deadline, sometimes it cannot be moved as its controlled by external factors.

These are critical to understand before you can go on your procurement journey as they are the constraints that need to be managed. A journey like this starts with a strategy which is usually the first stage gate approval before you can even go out to market. The following technical and commercial decisions need to be considered in support of a procurement strategy: BUILD VS BUY Does the market have a system off the shelf that will work well? SOFTWARE VS SYSTEM INTEGRATOR Who is ‘implementing’ the new system, the supplier or the client? CLOUD VS ON-PREMISE Most are defaulting to cloud first but you may need to stay on premise for security reasons. PENALTY VS REWARD VS INNOVATION What’s more important, the carrot or the stick? OUTPUT VS OUTCOME Do you need transactions to be delivered or an end-toend managed service? If you need to change your critical technology system to go further in your business, it starts with a procurement strategy that considers these challenges prior to gaining endorsement from your key stakeholders.

QUALITY Your new requirements may be more complex and have a higher standard to adhere to.

We take the time to understand your vision, and craft robust commercial frameworks to deliver it. enquiries@proximity.com.au or call 1800 959 985

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COMMUNITY HUB

Mentor Maurice gives back via Menslink The majority of Proximity staff recognise the importance of giving back, through volunteering and other ways of making their community and the world a better place.

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In each edition of The Pulse we will feature one of our bighearted staff members who goes above and beyond in their life away from work. Senior Advisor, Maurice Downing, has twice volunteered as a mentor for Menslink, a role not without its challenges but which he has found tremendously rewarding. We appreciate Maurice sharing his story and in particular the special bond he has formed with his young mentee, Obi, having recently graduated together after completing the two-year program. Maurice hopes that by sharing his story other men, from all walks of life, will share their wisdom and life experience with boys and young men who’ll benefit from a constructive male influence in their lives. As Maurice explains, ‘having lost my dad aged just 19, in hindsight, I know how much I would have benefited from an older male at that time to help me make the transition from youth to a young man.’ He describes the Menslink mentor selection process as ‘quite rigorous, as it should be. Once you register as a mentor, Menslink carefully vet your suitability, which includes police and reference checks,’ Maurice said. ‘In the end it’s the young fellas (the mentees) who make the choice for who they’d like to mentor them. That’s a big decision because you’ll essentially be together for the next two years.’

Maurice’s mentee, Obi, was just 10 when they first met, having been nominated for the Menslink program by his single mother.

‘Obi’s dad lives overseas and his mum recognised he didn’t have any reliable, older males in his life,’ Maurice said. ‘I was a bit apprehensive when we first met because he was much younger than the previous boy I mentored, who was 15. I thought he might think I was a bit of an old fogey. But my feelings quickly changed when I saw he was such a nice young fellow and his mum is a great mum, and a great woman. That made me feel more comfortable.’ Maurice and Obi quickly developed a close bond, catching up every fortnight and sharing the sort of experiences more typical of a father and son. ‘We went bike riding, slot car racing, go-karting, we went to the Raiders, fishing, did archery, watched my son play baseball and even did a martial arts session.

‘There’s a real bond you build up over those two years. It was so special receiving texts from Obi about our meet ups that ended with ’Love you Maurice’. I even showed my wife, in fact my family grew to love him as well.’ While the formal mentoring program has ended, Maurice and Obi still see each other regularly. ‘Obi started playing rugby this year and I go along to games when I can. We also go to Raiders games and grab a burger occasionally. He is just great.’ ‘For me, as a man, it’s great to be able to give back and mix with other men who are willing and able to give up their time to help a young guy in need of support. Knowing they’re doing that means they must be decent human beings, and I’ve made some good friends through the Menslink program.’

The services Menslink provided at no cost to the young men or their families and anyone interested in becoming a mentor can find out more via menslink.org.au Menslink is one of Proximity’s long-term community partners, we support Menslink through pro bono, fundraising and event support. To learn more about our partnership visit https://proximity.com. au/community/ #our-partners

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COMMUNITY HUB

Meet our University scholarship winners

University of Canberra We are delighted to announce the winner of the Proximity Prize in Law, Innovation and Technologies at the University of Canberra. Congratulations to Eliza Maddever, who achieved the highest result in the Unit—Law, Innovation and Technologies, resulting in a $500 prize sponsored by Proximity and the opportunity for Eliza to conduct an internship here with us. Eliza said that winning the Proximity Prize has provided reassurance and inspiration, “having had many doubts over the years as to who I am and what I can achieve, winning the Proximity Prize not only reassures me of my capability, but has reinvigorated me to continue pursuing bigger and more challenging goals. I grew up in poverty in rural NSW, and I did not know these things were even attainable for me. To know I am not excluded from succeeding merely by having a less favourable background speaks volumes to what can be accomplished where there is passion and hard work involved”. Eliza recently completed a double degree of a Bachelor of Laws/Bachelor of Journalism from the University of Canberra. She committed a significant portion of her final year to writing her Honours Thesis in Law which looked at the viability of trade marking smells, for which Eliza was awarded First Class Honours. Eliza now turns her mind to opportunities in graduate work and postgraduate studies, and we hope our award will help Eliza with her educational and academic pursuits.

The Australian National University Congratulations to Jye Beardow for winning the Proximity Prize for Information Law at ANU. Jye is completing his final year of a Bachelor of Laws (Hons) and Commerce and has a strong academic interest in public law, particularly constitutional law, and the ways in which the law interacts with and limits government regulation. “I am extremely grateful for Proximity’s generosity in sponsoring the award”, Jye said. The Proximity Prize for Information Law has encouraged Jye to continue exploring this dynamic and evolving field. Upon graduation later this year, Jye is looking forward to commencing consecutive Associateships at the Supreme Court of Queensland and the High Court of Australia, where he will have the opportunity to further observe the increasing interactions between law, technology and social media.

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We marked our tenth year in business with the acquisition of Alliance Consulting, a Canberra based consulting firm, with over 25 years of government sector procurement, financial and management consulting experience.

NEWS

Proximity acquires Alliance Consulting Group

The acquisition of Alliance further fuels our momentum, increasing our offering in both size and scale in these areas. Strengthening our ability to deliver dynamic commercial, consulting, and legal solutions for our clients. In addition, we welcomed all Alliance staff members to Proximity, including Alliance owners, Peter Bell and Jenifer Frederick. The addition of the Alliance team took our total staff to over 100 across Canberra, Melbourne, Sydney and Adelaide.

“We are deeply committed to building our integrated service offering and multidisciplinary teams and this milestone demonstrates our commitment to meeting rising client demands.” Proximity Director, James Dunn.

The Alliance team have brought significant public sector consulting experience, coupled with many years experience in senior government roles. We feel strongly that Alliance’s practical approach to solving challenges with great advisors who genuinely care about helping their clients is strongly aligned with our approach. We are excited about this strategic acquisition, and we are confident it will enable our people, clients, and communities to go further.

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NEWS

Staff Profiles Find out a little more about Peter Bell and Jenifer Frederick who joined the Proximity team from Alliance.

PETER BELL Expert Consultant Peter is an experienced consultant, facilitator and negotiator and has extensive experience in complex procurement, contract negotiations and mediations, contract management and service delivery management. He has also worked with several organisations in service delivery reform, strategic and operational planning, process modelling and analysis, business process improvement and governance. He is a Certified Management Consultant. Prior to founding Alliance, Peter was a Senior Executive in the ACT Government where he was responsible for ICT and Information Management policy and service delivery.

JENIFER FREDERICK Expert Consultant Jenifer has wide ranging consulting and executive management experience in financial management and analysis, organisational improvement, governance, audit and risk management, workforce planning, learning and development and service delivery reform. Jenifer holds professional qualifications in Commerce, Law, Arts and Human Resource Management. She is a Fellow of CPA Australia. Prior to joining Alliance, Jenifer was an Assistant Auditor General (SES Band 2) in the Queensland Government.

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NEWS

Proximity announced finalists in four categories in the Australian Law Awards 2021 We are delighted to announce that we have been successfully shortlisted across four firm categories at this years Lawyers Weekly, Australian Law Awards.

Employer of Choice

NewLaw Firm of the Year

Pro Bono Program of the Year

Government Team of the Year

To be shortlisted as a finalist for four awards is wonderful recognition that we can achieve excellence without following the usual path. The NewLaw Firm category recognises firms that are considered game changers in the legal profession, challenging the traditional law firm model, with a strong focus on innovation. “NewLaw Firm of the Year is one of the most coveted awards and to be shortlisted together with nine other leading law firms is testament to the commitment and work ethic of the Proximity team and the success of our business model,” said Director, Sean King. Proximity’s shortlisting in the Employer of Choice category focused on ‘going above and beyond for employees’, with the Law Awards judges looking for leadership in staff attraction and retention, and how we place importance on the quality

care of our people. The criteria also focuses on the initiatives for our people that are ‘innovative, unique and vastly different’ and is judged against the availability of other initiatives in the market. “We see this as being of immense significance, as we always strive to put our people and culture first, and to be selected as a finalist is reassurance that our Proximity model really does break the mould, and our team-first culture works,” stated Director, James Dunn. To be also shortlisted as a top ten finalist for Pro Bono Program of the Year amongst significantly larger firms is a testament to our pro bono/CSR structure that focuses on valuable community impact. And we are of course delighted to be recognised again as a finalist for Government Team of the Year. Since winning this award in 2017, we have continued to increase our government-dedicated team, significantly grown our legal advisory capability and fully integrated consulting practice, and established ourselves as the leading innovative alternative to the traditional national firms. We are keeping our fingers crossed for when the virtual Australian Law Awards are announced at the end of August.

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TWO MINUTES WITH

James Lavery

Tell us how you came to join Proximity? Mike Watson (a member of our Advisory Board) put me in touch with James Dunn in 2018. I know Mike through professional contacts. We started discussions, and the rest is history. I joined Proximity in September 2019— great decision! What’s the best advice you have ever been given? It’s best to reflect (at least overnight) on tricky problems and issues, rather than responding immediately. The passage of time, and reflection, allows your brain to process problems, often giving you a completely different perspective.

What is your proudest moment in a professional context? Leading the team that re-made the Victorian transport statute book over the 8 years between 2006 and 2014; my admission as a lawyer in 1999. Away from work, what is your passion? My partner Lee, my family and friends, my garden, regular exercise, great holidays, and cooking lovely food. With an eye on the future, what does success look like for you? Being able to work closely with all levels of government at Proximity to assist in ensuring fantastic outcomes for our communities across Australia.

What advice do you give to someone starting out in a career? Ensure you try a diversity of different roles and types of work—this will ensure you bring a breadth and depth of real-world experience when providing advice. How do the Proximity values, genuine, bold and helpful underpin your work ethic? Proximity’s values really resonate with me—everything I’ve done in my professional life has been about helping clients, government and community with helpful, frank and fearless advice.

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We are genuinely different.

Our philosophy follows two simple ideas

At Proximity we’re passionate about the work we achieve together. We’re known for breaking the mould and walking alongside our clients to unveil what is possible. We achieve maximum impact by working closely with our clients in multidisciplinary teams and customising our service delivery for each project.

1. We recognise high performance teams are collaborative, generous and transparent so we cultivate an exceptional workplace culture. 2. Through our culture we attract a team of highly accomplished professionals who enjoy their work and have the experience and autonomy to succeed.

Values Bold

ne nui e G

site On Organisational Planning & Transformation

Delivery Advisory

Solutions

Help ful Prod uc ts

Procurement &Tendering

Governance

Consulting

Reviews, Investigations & Inquiries

mercial Com

Digital, Data & Cybersecurity

Contract & Vendor Management Probity Business Cases & Cost Models Project & Program Management

Risk Management & Compliance

Negotiation

Policy, Programs, Grants & Regulation

Le g al

Corporate & Commercial Law

Litigation & Dispute Resolution

Workplace Compensation Law

Onsite Legal Services

Public Law

Property & Environment Law

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