The 19th Annual Remuneration & Governance Forum, co-hosted by CGI Glass Lewis and Guerdon Associates, convened on the 18th of March 2025 in Sydney. The forum provided a platform for candid, experience-driven dialogue between directors, institutional investors and governance professionals, focusing on both the 2024 proxy season and the broader landscape.
Below we present a summary of some of this year’s sessions on remuneration. You can read about the remuneration-related forum discussions here, and about key insights from the 2024 proxy season in Australia here.
These notes reflect the discussions held at the Forum and should not be interpreted as representing CGI Glass Lewis’ views or policies.
Benefits of Battle Scars on Boards
The second panel delved into the interplay between past adversity and present boardroom effectiveness. With a title nodding to hard-earned lessons, the discussion brought together investors and directors to explore whether prior missteps disqualify, or better prepare directors for effective oversight.
Reframing “Clean” Records: Why Experience Matters
The discussion opened with a pointed question: Is a pristine board resume always preferable? Several panellists challenged the notion that a “squeaky clean” record is the hallmark of a capable director, suggesting instead that directors who have weathered reputational, operational or financial crises often possess deeper judgment and steadier hands.
That said, not all experiences are equal. Governance blind spots, poor risk oversight and financial mismanagement, particularly of fundamentals like cash flow, were identified as legitimate red flags.
What matters is not whether a director has been through turbulence, but how they responded. Did they deflect responsibility, or learn, engage and lead?
Accountability, Renewal, and the Role of Context
Accountability was framed as both principle and practice. Rather than reactively sidelining crisis-associated directors, boards were encouraged to evaluate the full context: timing, scale and the director’s role in either escalation or resolution. Increasingly, boards are embedding this approach into formal renewal processes, with reappointments triggering thorough director assessment.
Boards were encouraged to avoid overly rigid interpretations of accountability that might deter directors with valuable crisis experience. Some panellists warned that if boards focus too narrowly on past controversies, they risk fostering a culture of risk aversion, a concern particularly relevant in Australia where director appointments can already reflect conservative tendencies. The discussion emphasised the need to weigh context and contribution rather than applying blanket rules, so that resilience and judgement are not excluded from the boardroom.
This shift has prompted many boards to move away from passive reappointments and embed structured renewal processes, including evaluations of director performance and future alignment.
Investors Are Not Looking for Perfection
From an investor standpoint, perfection is not the bar. What matters more is accountability, humility and a willingness to engage. Voting against directors is rarely a first move, it's often the result of persistent governance issues, poor responsiveness or visible disengagement across multiple boards.
Crucially, accountability was positioned as a collective responsibility. While the spotlight often falls on the chair of the board or chairs of key committees, investors stressed that governance lapses usually point to broader board dynamics, not just individual shortcomings.
Broad-Spectrum Diversity
The panel pushed beyond traditional diversity metrics (such as gender and ethnicity), noting that cognitive and experiential diversity are prized by investors. Investors are increasingly seeking directors with varied industry experience, crisis-tested judgement or unconventional career paths, arguing that such backgrounds enrich board decision-making and enhance resilience under pressure. The overarching message was that diversity should be viewed as a strategic asset, not just a compliance exercise.
The conversation also addressed board culture. Panellists agreed that boards function best when they can foster constructive tension, harness dissent and avoid groupthink, creating space for robust and inclusive discussions.
Media Influence and Board Accessibility
The influence of media coverage on director perception was acknowledged as double-edged. While headlines can help surface reputational concerns, they don’t always tell the full story. Investors encouraged their peers to look beyond press narratives and engage directly with boards to form independent assessments of director performance.
Panellists also observed that Australian boards are generally more accessible and open to investor engagement than their U.S. counterparts, which can support more direct, constructive conversations around governance concerns.
Strengthening Boards Through Lessons from the Trenches
The panel made a strong case for rethinking how boards assess director value and renewal. The insights below reflect a nuanced approach to director accountability that recognises the lessons crises can teach, and the strength that comes from navigating them well.
- Experience through adversity can be a strength
Directors with crisis experience often bring clarity, calm and insight. What matters is not whether they faced adversity, but whether they demonstrated learning, leadership and sound judgment in response.
- Scrutiny must be contextual, not reactive
Boards must evaluate directors based on the nature and timing of crises, the director’s role and their response, not just the headlines or outcome. Accountability should be rooted in understanding, not optics.
- Avoid blanket approaches to accountability
Rigid interpretations of accountability can deter directors with valuable crisis experience. Boards should guard against over-correcting for past controversies in ways that foster risk aversion and dilute boardroom resilience.
- Accountability is collective, not individualised
Although shareholders vote on individual directors, governance failures often reflect broader board dynamics. Committee chairs may carry specific responsibilities, but governance is a team sport. Investors assess the full board, especially when issues reveal structural or cultural weaknesses.
- Diversity is also about experience
Board diversity should encompass not just demographics but perspective. Crisis-tested directors, those with unconventional or non-linear paths, and those with sector-spanning insights all add valuable dimensions to board performance.
- Investor engagement matters
Boards that actively engage with shareholders and respond authentically to concerns are more likely to maintain trust, even in difficult times. Avoiding “scripted” answers and demonstrating openness are key.
- Board renewal should be rigorous and forward-looking
Re-election should be more than a procedural step. Boards should reassess whether directors remain fit for purpose, aligned with the company’s evolving strategic challenges and stakeholder expectations.
CGI Glass Lewis and Guerdon Associates’ Remuneration & Governance Forum is held annually in Q1. These notes reflect the discussions held at the Forum and should not be interpreted as representing CGI Glass Lewis’ views or policies.
