VicWater has always been committed to providing members with opportunities to come together for thought leadership, professional development, and networking events. With that in mind, it held an Audit and Risk Symposium in early September to cover governance, risk, and assurance practices.
The VicWater Audit and Risk Symposium took place in early September at the offices of Pitcher Partners. With a full day’s program, attendees had an opportunity to learn from industry experts. The program was also streamed live for those who could not attend.
Keynote speaker – Clare Payne
Clare Payne is a leading voice on ethics and trust. She has written two books, Matter of Trust – The Practice of Ethics and One – Valuing the Single Life.
Payne currently holds positions as an EY Fellow for Trust and Ethics and a Fellow of The University of Melbourne. Before the global financial crisis, Clare’s paper, Ethics or Bust, was awarded the inaugural Ethics & Trust in Finance Prize by the Observatoire de la Finance, Geneva. She then founded The Banking and Finance Oath, a Hippocratic-type oath for those working in banking and finance.
In her keynote speech, Payne spoke about how the water industry is highly regulated. It is also important to pay attention to community expectations. Community expectations are vital to understanding how companies operate, as what is unethical changes regularly. She looked at systemic issues, such as slavery and the #MeToo movement. They were compared to legal but not right areas. Examples included the banking royal commission findings and the dramatic price hike of the anti-malarial and antiparasitic drug Daraprim by Martin Shkreli.
Another area she focused on was the role of the environmental, social and governance (ESG) funds in shifting behaviours in financial markets. Payne also pointed out how ethical goalposts are moving all the time.
Social license and trust
One of the biggest risks companies face today is losing their social licence to operate. This is decided by the public, with superannuation funds playing a more prominent role in financial markets. Losing the social licence to operate can result in losing market, reputational value, stakeholder disapproval, more reviews and regulations, and progress stopped.
Payne spoke about the Edelman Net Trust Score, where its research has distilled everything down to one question: to what extent do you trust the organisation or person to do what is right? It is human nature to trust, but Payne pointed out that we have been taught not to trust people over time. Distrust has become the default through the teaching of stranger danger. Fifty-five per cent of Australians believe that distrust is the norm. That loss of trust is across almost every level of society, while non-governmental organisations (NGOs) are seen as unifying.
Bias and testing decisions
Payne pointed out that research has shown 188 known cognitive biases. She recognised that we do not know all those biases, nor do people realise they all exist. However, people should acknowledge that biases exist and their preferences impact them. Understanding those biases is key to working better with your organisation, stakeholders, and customers.
After a discussion of ethical dilemmas, Payne looked at testing decisions. She recommended three different moral tests. The first is the sunlight test, which encourages people to ask if they want to see a specific decision in the public domain. The second is the respected person test, which asks if a person you respect would decide this. The final test is the other person’s shoe test. In its simplest form, it asks the questioner to put themselves in another person’s shoes to see if it is the sort of decision that would support their lives.
Managing workforce risks in the water sector
The first panel session of the Audit and Risk Symposium focused on current and future workforce risks and challenges facing the water sector in Victoria.
With low unemployment rates, a highly competitive job market and the post-pandemic ‘great resignation’ phenomenon, attracting and retaining talent is an increasing challenge for the Victorian water sector. This is particularly the case for executive roles and corporate areas such as IT and finance. There are also serious skills shortages and training constraints. The water industry is struggling for technical and specialist positions in traditional water operations and emerging business areas like energy and emissions. Added to all this is the need to prioritise the health, safety and well-being of the workforce while maintaining essential service provision and productivity.
Goulburn Valley Water General Manager of People and Customers Christina Bassani facilitated the panel. She set the scene by explaining that staff turnover in water corporations has doubled from the pre-pandemic average of 8-10 per cent to 16-20 per cent.
ASPL Group CEO Kris Grant shared her insights into how businesses should focus on retention and creating internal talent pipelines. They can do this by making workplaces more diverse and inclusive. She also pointed to providing better learning and development opportunities.
Southern Rural Water Managing Director Cameron FitzGerald talked about how the water sector can work together to promote our collective employee value proposition around positive purpose and community impact.
North East Water Executive Operations John Day raised awareness of the current lack of training providers nationally for water and wastewater operators and the significant risks that this poses for water corporations in carrying out their core functions.
Cybersecurity risks and governance
The Audit and Risk Symposium closed with a panel session facilitated by Rob McKie of Pitcher Partners on best practice cyber governance, roles and responsibilities.
The threat of cyber-attacks is real and growing. Water corporations carry significant risk concerning both their IT and OT environments. A successful attack on water assets could have catastrophic consequences for public health and safety. With increasing cyber risk comes increasing regulatory oversight and management accountability. Boards and executives are concerned to know that their cyber risk program is adequate and that their organisation will be able to contain, respond and recover from a cyber-attack.
Victorian Government Chief Information Security Officer (CISO) John O’Driscoll and acting water sector CISO Anafrid Bennet provided advice about how water corporations can uplift their cyber knowledge and capability to embed cyber within their risk management framework.
Robert Gregory, Partner at Maddocks, and Bastion Reputation CEO Clare Gleghorn spoke about the role and responsibilities of directors. They also talked about the legal and reputational risks that can arise from a cyber-attack.
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