Lisa Campbell’s role as a regulator as well as a personal interest in the topic led her to take the UCD Diploma in Corporate Governance at Smurfit Executive Development. As head of operations for the Irish Auditing Supervisory Authority (IASA), Campbell is responsible for supervision of financial reporting, accountancy bodies and direct inspection of public interest entity audit firms. She also sits on the audit and risk committee of the National Council for Special Education.
“Governance is important, and it runs through all the different things I do in my professional life,” she explains. “There is a lot more interest in governance generally now, and in my day-to-day job as a regulator I am always interested in the governance of the entities we regulate. Directors are responsible for financial statements and auditors are also required to have good governance as are the accountancy bodies.”
Campbell chose the UCD Diploma in Corporate Governance for several reasons. “I looked around at the different courses available and three things drew me to the Smurfit Executive Development programme. The first was the fact that it scores very well on the FT Rankings. Secondly, it is part of the MSc pathway, which allows you to go on to get an MSc in Business (Leadership & Management Practice) on completion of three diploma programmes.”
The third and most attractive aspect for her was the people who had completed the programme. “I looked at the alumni on the website. A lot of executive development learning comes as much from people in the room as from the lecturers. Seeing the variety and quality of the alumni swung it for me.”
There were failures in financial reporting and auditing prior to the financial crash and a lot of work was done after that
At least part of the reason for the current heightened interest in corporate governance is due to the challenges faced by boards, she believes.
“The pace of change has been accelerating, particularly after Covid. There were failures in financial reporting and auditing prior to the financial crash and a lot of work was done after that. Another round of work done is being done now, which is looking at all areas including board structure, corporate governance, corporate reporting and audit. This presents significant challenges for boards. There is an awful lot of change that they need to keep up with and it’s not slowing down.”
The sustainability agenda is also having an impact. “There are already some requirements for companies to report on environmental, social, and governance [ESG] performance but, more than that, investor expectations often exceed those requirements. The agency theory of corporate governance was that the board’s main duty was to ensure the company makes money, but that’s fallen down the list now with things like ESG coming ahead of it. We have seen several cases where investors have voted against resolutions at AGMs as a result of their expectations not being met in that area.”
And new regulations, such as the Corporate Sustainability Reporting Directive (CSRD), are on their way. “Big companies can afford to get consultants in to help them with compliance, but smaller companies might struggle. Even smaller companies below the threshold for compliance might need to have audited ESG reports because they are part of the value chain of a larger company which is covered by the regulations. There will be a lot more pressure from investors and regulators on companies to prove and verify targets. They won’t accept greenwashing.”
Perceptions are important as well, Campbell says. “We see this in financial statements. Companies can use alternative performance measures in annual reports, which means there can be different numbers in the narrative section and in the actual financial statement. There can be valid reasons for that, but there are concerns about the impression it might give to investors and other stakeholders. Companies are going to have to reconcile the two.”
More generally, she says the breadth of board responsibilities is growing all the time.
“We are seeing new regulations and areas like cybersecurity are now on everyone’s agenda. Boards of large listed plcs tend to be of a good size, with well-paid directors who have the time and resources to devote to their responsibilities. But the board of a charity can be made up of volunteers who still have to comply with all the regulations but with no resources. The best way to deal with that is to have really good controls in place.”
If a person joins a board, they do it for good reasons, but they are putting their career and reputation at risk
That’s where high standards of corporate governance and auditing come in. “I don’t know if people put enough value on audit,” Campbell adds. “If a person joins a board, they do it for good reasons, but they are putting their career and reputation at risk. They need to make sure the controls are there, with high quality auditing and best practice governance in place for them and the company.”
The UCD Diploma in Corporate Governance has had an impact on her working life, even before she graduated in May 2022.
“Every week I came back into work with something from the course to discuss. Its biggest impact was a deepening of my understanding of those challenges facing boards. Learning from the people in the room and their different perspectives was also very important. There were other regulators and people industry, and civil and public servants in the class. That helps you to have more empathy and enables you to put yourself in the shoes of board members. It helps you understand that it’s a really difficult job.”
Campbell enjoyed every aspect of the course. “I learned so much from it. Meeting new people, networking, and sharing experiences was great. It’s not a small commitment, I almost had to give myself permission to devote the time to it, but I would definitely recommend it very highly.”
For more information on the next intake of UCD’s Diploma in Corporate Governance, which commences on September 6th, 2022, visit www.smurfitschool.ie