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Acknowledgements

I would like to begin by acknowledging the Gadigal people of the Eora nation and their ongoing connection to and custodianship of the lands on which we meet today.

I pay my respects to elders past and present and I extend that respect to Aboriginal and Torres Strait Islander people present today.

I would also like to congratulate the AICD on its 10^th Governance Summit. It’s a year for birthdays – it’s ASIC’s 35^th birthday this year, which I thought I would mention. This will be my fifth and final time speaking here as Chair of ASIC, and I’ve always found it to be an exceptional forum for significant and thoughtful conversations.

Introduction

More than 400 years ago, an unlikely trio solved a puzzle that had confounded mathematicians for centuries and laid the foundations for modern risk management.

The characters in question were Chevalier de Mere, a French nobleman with a penchant for gambling; Blaise Pascal, a brilliant but highly-strung mathematician who himself was a regular visitor to the gambling tables of Paris; and Pierre de Fermat, a lawyer who dabbled in mathematics for fun – if you can imagine such a thing – and who explored many of the fundamental concepts of calculus before even Sir Isaac Newton.

Their dilemma was this: how do you fairly divide a pot of money if two players agree to play the best of seven games of chance, but are interrupted before they finish? How should the stakes be divided if, for example, one player triumphed in three games while the other prevailed only once?

Some of you might be thinking that the pot should go to the leader. Others might say it’s only fair to split it 3:1. But de Mere, our inveterate – and thankfully, numerate – gambler, suspected that by assuming the past would look exactly like the future he was coming up short. He invoked the seventeenth century version of phoning a friend and wrote to Pascal and de Fermat and from their correspondence was born the concept of probability.^[1]

So, what do renaissance gamblers and jurisprudent polymaths have to do with the duties of a modern company director? Their tale, recounted in Peter Bernstein’s engaging book, Against the Gods: The Remarkable Story of Risk, reminds us that risk is a choice, and we are not passive recipients of the whims of the gods or the fates.

I suspect everyone sitting in this room today knows a lot about risk. No matter what industry you’re in, that is ultimately your business as a company director – risk.

Last week, Justice Michael Lee had rather a lot to say about directors engaging with risk. He said that:

“... in determining whether a director or other officer has engaged in contravening conduct, it is necessary to balance the foreseeable risk of harm to the company against the benefits that could have reasonably been expected to accrue to the company by reason of the director's or officer's action, along with the difficulties attending any alleviating action."^[2]

I’ll be returning to this decision shortly, as I’m sure you won’t be surprised that I’m doing, but it’s fair to say that the law doesn’t expect directors to be oracles or soothsayers. Rather, directors are expected to take considered risks in the face of considerable uncertainty.

Risk is not a dirty word. Risk helped to build the world around us. Medicine, space exploration, artificial intelligence, quantum computing – every human advancement has relied on risk-taking.

But risk is a two-sided coin. It has upsides and it has downsides. And today, being the director of a company means managing more risks for seemingly fewer rewards.

So today, I want to examine some of these risks, and ask what might be a provocative question: is it worth the risk to be a company director in Australia these days?

The two-sided coin

First though, let’s get a lay of the land.

If you ask any director in this country, they’ll tell you their job is getting harder and harder.

Let’s face it - the boardroom seat just isn’t as comfortable as it once was – if it ever was.

It could be argued that the role of the company director has been fundamentally reshaped in the decade since the AICD’s Governance Summit began.

The Hayne Royal Commission was a critical turning point. For directors, it was no longer good enough to ask, ‘can we do this?’. The question instead became ‘should we do this?’.

New legislation has meant issues like cybersecurity or poor consumer outcomes are no longer bureaucratic departmental problems, but can be laid directly at the feet of the board.

All of this has occurred in a business environment that is increasingly unpredictable and uncertain.

A project that has monitored global economic policy uncertainty since the 1980s found that the five highest measurements of uncertainty have all come in the past five years.^[3]

The latest World Economic Forum Global Risks Report shows that, across the world, “risks continue to spiral in scale, interconnectivity and velocity”.^[4]

And as the events of the past week in the Middle East have made clear, geopolitical risk is not expected to ease anytime soon.

Meanwhile, recent research for the AICD suggests Australia is now one of the most complex and high-risk legal environments in the world to operate in.^[5]

Australia is one of the few places in the world where directors’ duties are enforced publicly, and I might just pause there to explain what that means. It means that ASIC as the regulator can itself bring court action against companies and directors for failures of corporate governance. So, our law courts are full of cases run by ASIC. You will not see that in the UK or the US, for example.

And more than half (59%) of directors say compliance and regulation is the main factor impacting their board's risk appetite.^[6] Since 2000, federal legislation has increased in volume by 142%. Pages of legislation have increased by 190%. Board time spent on compliance has doubled from 24% to 55% over 10 years. And spending on compliance-specific roles has nearly tripled, from $1.9 billion in 2010 to $5.7 billion in 2024.^[7]

Now then, all this complexity comes at a cost – an opportunity cost.

There are fears that Australia is falling to the back of the pack in the global race for innovation. Australian business resources devoted to research and development (R&D) was 0.9% of GDP in 2023-24 – a figure largely unchanged since 2017-18^[8] and I regret to say, well below the OECD average of 1.99%.^[9] Productivity growth remains a challenge, with multifactor productivity decreasing by 0.5% over 2024-25, below the 20-year average of 0.4% growth per year.^[10]

I don’t shy away from the role of regulators in all this. In fact, this is why I convened the ASIC Simplification Group more than one year ago. I should add the AICD’s contribution to the group has been outstanding, and I thank [AICD Chair] Naomi [Edwards] and her team for that.

The group’s feedback has helped to hone ASIC’s focus on reducing regulatory complexity. As a result, we have improved access to information, including our regulatory guidance, simplified ASIC’s instruments, and initiated pilots to make it easier for small business directors to navigate ASIC’s processes. Our next priority will be improving digital interactions with ASIC and exploring opportunities with Treasury to streamline our regulatory framework. So, we are doing what we can to reduce regulatory complexity.

I also want ASIC to be backers, not blockers, of innovation. I’ve said before that Australia faces a choice – to innovate or stagnate. This requires fresh thinking, smart risk-taking, and collaboration across the private and public sectors.

This is why last year we launched a review of the ASIC Innovation Hub, which has assisted around 1,000 fintech and regtech businesses to navigate Australia’s regulatory system since 2015. As a result, we’ve identified several areas where ASIC will take the lead, so that Australia’s markets are fit for the future. This includes convening a roundtable of senior financial market experts and practitioners, to work with us on future regulatory models for financial market infrastructure.

It’s also why we are working with collaborators to embrace innovation in our own operations. We are piloting access to advanced supercomputing infrastructure, working with the University of Technology Sydney’s Human Technology Institute and the Pawsey Supercomputing Research Centre based in Perth, Western Australia^[11] to explore early signal intelligence in life insurance claims and disputes.

But this is only one part of the equation. Boards and executives have a defining role to play in driving innovation. And it starts with who is in the boardroom. Almost 80% of board members had a background in legal, finance, and general management last year. By contrast, those with a background in technology was less than 8%.^[12] Those numbers have scarcely changed in the past year.^[13] This raises serious questions about whether boards are equipped to seize the increasingly technologically driven opportunities before us.

The privilege of being a director

I said before that being a director means taking considered risks in the face of considerable uncertainty.

But does that mean the job is getting too tough and that good people are shying away from it?

Looking around the room, I wouldn’t say that’s the case at all. There are more than two million directors in Australia^[14] of companies large and small who are making an invaluable contribution to this country.

In my term as Chair, I’ve had the great privilege of talking to many of you. Directors who bring skill and heart to the job, and who leave organisations better than they found them.

As John Mullen put it in his speech here last year: “A directorship is a privilege. It is intellectually challenging and rewarding, you learn new stuff every day,” – a bit like being the Chair of ASIC! – “You get to contribute to making your company and the world a better place, and you get to meet some fascinating and brilliant people with whom you would probably never otherwise cross paths.” So, it really is a job that demands the best of you, every day.

Now then, the more cynical among you may be surprised to hear a corporate regulator speak in such terms of directors. Yet, given the immense significance of well-run and successful businesses to the community, the public interest is also served by directors performing well.

Moreover, ASIC has a keen interest in ensuring that organisations have good directors at the table. ASIC cannot be everywhere, all at once. We rely on good directors to act as the first line of defence of good corporate governance. It is always better to have a fence at the top of the cliff rather than an ambulance stationed at the bottom, and that’s what good directors are – among other things, they’re guardrails that can prevent consumer and investor harm. So, ASIC is very interested in ensuring there are good directors.

Thankfully, we are fortunate in Australia to have a mature ecosystem of corporate governance. We have a pool of very capable directors, with significant experience. We have organisations such as the AICD developing and promoting excellence. We have strong investor and consumer advocacy groups who play a vital role in holding companies to high standards. And we have strong rule of law, with robust institutions including regulators, to hold directors to account.

The role of the board

The community rightfully has high expectations of directors. I don’t resile from that in any way. It’s not money for nothin’, as the song goes. As Justice Lee observed last week, directorships “are not just tokens or glittering prizes decorating a CV; the job requires intelligent people prepared to engage actively.”^[15]

Stepping back for a moment, I think there is also a common misunderstanding about what the work of boards and directors actually entails in larger entities – particularly for non-executive directors.

It is often put to me by both parliamentarians and members of the general community that when things go wrong at a company, the directors should face severe penalties, including criminal sanctions. However, the fact that a board has presided over disappointing or unattractive corporate conduct, doesn’t always mean that the law has been broken or that directors have breached their duties. So, there is sometimes a gap between what the community expects and what the corporations law requires – in other words, between the court of public opinion versus the court of law.

Boards are not there to run the company day-to-day. That is the job of management. And there have long been questions about where the line should be drawn, and about what reasonable reliance on executive management looks like in practice.

This issue was at the heart of the case we took against the former directors and officers of Star Entertainment.^[16]

This is probably the most significant corporate governance case we have taken in my time at ASIC.

This was a case that we had to take on. Not only because matters such as this define and enforce the standards of care, diligence, and accountability expected of senior corporate leaders. But because of widespread community concern about what happened at Star Entertainment.

The findings against the former CEO and General Counsel are serious and significant. They underscore the responsibility of senior executives in these roles to recognise serious risks, and ensure those risks are addressed and properly brought to the board’s attention.

More broadly, they help to clarify expectations about the role of the management versus the board.

While His Honour found that the non-executive directors had not breached their directors' duties in proceedings brought by ASIC for a pecuniary penalty, he went on to make a range of observations that in my mind make a serious contribution to what's expected of directors in this country.

This judgment, in my view, is not a backwards step for directors’ duties – quite the opposite in fact. I think it will be studied by directors, executive management, and their advisers for years to come.

There is much in Justice Lee’s judgment that is noteworthy. For me, there are three key observations that every director must take heed of.

The first is that: “Directors are remunerated, sometimes handsomely, to do their job, which requires real engagement with information provided to them.”^[17]

The second is that: “Directors cannot substitute reliance upon the advice of management for their own attention and examination of an important matter that falls specifically [within] the board’s responsibilities.”^[18]

And the third is that: “Directors cannot rely upon an inability to cope with the volume of information they receive” and must “take reasonable steps to place themselves in a position to guide and monitor the management of the company”.^[19]

In other words, directors are not “passive recipients of information”^[20]. They must discharge their duties with a high degree of curiosity and care. It’s not enough to merely skim the board packs – directors should interrogate – if not outright challenge – information put to them. And that being overwhelmed by the volume and complexity of information provided to them is not an incontrovertible excuse.

I should say, nothing in this judgment has changed our appetite to hold corporate leaders to account for their governance failures. We will also continue to look for cases where we can define the line of responsibility for directors. Provided we have a reasonable basis for taking action, we won’t shy away from cases where the outcome is uncertain. I hope it won’t come as a surprise to all of you to say if regulators only took on the easy cases, the hard questions would never be answered, and directors would be left to navigate this uncertainty alone. And I would hope you wouldn’t expect your regulator to simply take on the easy cases.

The risks and opportunities of AI

So, if it is not the job of the board to run companies day-to-day, what is the work of a director then? As I said earlier, your business is ultimately risk. And that includes risks that are increasingly technologically driven.

AI represents one of the most momentous and significant areas of change in today’s world. Like any tool, of course, it can be used well or badly. And the opportunities it presents for directors are undeniable, which Justice Lee recognised last week too.^[21]

And I should note in passing that he called out a piece of research that the AICD commissioned and found that really helpful, so I think that reflects really well on the AICD.

[That] report on AI use by directors and boards showed some directors were already using generative AI platforms to support their meeting preparation, with appropriate risk mitigations.^[22] The technology has the potential to enhance scenario planning, improve risk monitoring and compliance, and complete real-time analysis that could take humans days or weeks to generate.^[23]

This is a far cry from where many of us thought we would be a decade ago. In 2015, nearly half (45%) of technology executives surveyed by the World Economic Forum predicted that by 2026, AI directors on boards would be commonplace – that is, AI bots appointed to the board of directors.^[24], ^[25] Well, that hasn’t happened yet. The robots are yet to gain a foothold. ^[26] However, a "two-speed dynamic” is emerging^[27], obscuring the true use of, and reliance on, artificial intelligence in an area where human judgment remains paramount.

Boards are right to be cautious about using AI as a governance tool. Indeed, our review of artificial intelligence use by financial services licensees showed a growing governance gap for entities that had or were considering deploying the technology.^[28] I should say that piece of research happened about 18 months ago. I’m hoping ASIC will be able to refresh it.

In a recent essay, the CEO of Anthropic – an AI company – Dario Amodei warned that, “humanity is about to be handed almost unimaginable power, and it is deeply unclear whether our social, political and technological systems possess the maturity to wield it.”^[29] That includes our models of ordinary corporate governance.

The arrival of agentic AI raises the stakes significantly. Agentic AI is not just another moment of technological upheaval – it will be an inflection point in how organisations manage risk.^[30] With it comes greater autonomy and unpredictability, new harms that can arise from autonomous decision‑making, and new risks that can be accentuated from existing governance gaps.

This is a risk that every director needs to get on top of, and you won’t do so by sticking your heads in the proverbial sand. That means every director should embrace AI, to understand its risks and benefits with both eyes open, and to harness its potential for community and customer benefit. And it means that every board needs to have a conversation about AI use and determine their risk appetite and policies rather than turning a blind eye to the issue and hoping it all sorts itself out.

I said earlier that risk is a choice. But failing to choose is also a risk. And in the age of AI, it is a risk directors cannot afford. To put it another way, if you are not on the cutting edge, you might end up finding yourself on the bleeding edge. This does not mean going all-in blindly, of course. There are many commercial, governance, and legal considerations. But it does mean having a conversation and laying some ground rules.

Should you become a director?

So, with all this said, let me return to the question I asked at the beginning: is it worth the risk these days to be a company director in Australia?

You’ve heard today that being a director is not for the fainthearted. It comes with an ever-expanding thicket of risks, liabilities and obligations in an environment growing more complicated by the day, with the weight of community expectations on your shoulders.

However, that doesn’t mean you shouldn’t do it. Quite the opposite in fact.

What it means is that we need good directors more than ever before. Directors who are curious and capable and pay attention to the details. Directors who are bold enough to take risks but draw the line at recklessness. Directors who are hungry to learn but humble enough to admit what they don’t know. Directors who embrace new technology and are clear-eyed about risks and opportunities in equal measure.

If you have all of these qualities and more, then of course you should say yes to becoming a director.

To return to the words of Peter Bernstein, “The word risk derives from the early Italian risicare, which means ‘to dare’. In this sense risk is a choice, rather than a fate”.^[31]

With this in mind, I hope you dare to be the kind of director who dares to build a better future for all of us.

Thank you.

^[1] Peter L. Bernstein, Against the Gods: The Remarkable Story of Risk (New York: John Wiley & Sons, 1996), pgs 58-72.

^[2] Australian Securities and Investments Commission v Bekier (Liability Judgment) [2026] FCA 196, at [110].

^[3] Economic Policy Uncertainty Index

^[4] The Global Risks Report 2026 | World Economic Forum, pg. 7.

^[5] Director Liability: Comparative assessment of Australia and international peers

^[6] How directors can empower boards to drive productivity growth

^[7] $160 billion and counting: The cost of Commonwealth regulatory complexity

^[8] Research and Experimental Development, Businesses, Australia, 2023-24 financial year | Australian Bureau of Statistics

^[9] National productivity won’t be boosted with flatlining business investment in R&D | Australian Academy of Science

^[10] Annual productivity bulletin 2026 | Productivity Commission
Note: Multifactor productivity (MFP) is a measure of how well labour and capital inputs are combined to produce outputs and is a key determinant of growth in income and living standards.

^[11] The Pawsey Supercomputing Research Centre is an unincorporated joint venture between CSIRO, Curtin University, Murdoch University and The University of Western Australia (core members) and Edith Cowan University (founding associate member). It is supported by the Western Australian and Federal governments.

^[12] 2025 Board Diversity Index

^[13] The times they are a-changin’– but directors’ duties aren’t

^[14] To nation’s 2.5m directors: stand up and be counted

^[15] Australian Securities and Investments Commission v Bekier (Liability Judgment) [2026] FCA 196, at [1945].

^[16] In this case, we alleged these individuals breached their duties for failing to properly deal with money laundering risks. The Court found that Star’s former CEO and Managing Director, Matthias Bekier, and former General Counsel and Chief Legal & Risk Officer, Paula Martin, breached their duties but dismissed ASIC’s case against the former non-executive directors.

^[17] Ibid, [1840].

^[18] Ibid, [370 – 371].

^[19] Ibid, [395].

^[20] Ibid, [1956].

^[21] Ibid, [394].

^[22] AI use by directors and boards: Early insights

^[23] ’How to bring AI into the boardroom’, AICD, October 2025.

^[24] World Economic Forum ‘Deep Shift - Technology Tipping Points and Societal Impact’ September 2015, p. 21 WEF_GAC15_Technological_Tipping_Points_report_2015.pdf

^[25] In 2014, In Deep Knowledge Ventures assigned an AI as the sixth member of its board called Vital (Investment Tool Verification to Advance Life Sciences). in 2016 a software company called Tieto became the first in the Nordic nations to nominate an AI named Alicia T. to its leadership team in a new data-driven business unit. Impact of Artificial Intelligence on Corporate Board Diversity Policies and Regulations - PMC

^[26] In 2024, Abu Dhabi-based International Holding Company (IHC) has created a new non-voting board observer position for an Artificial Intelligence (AI) Observer, named Aiden Insight. Artificial Intelligence board observer appointed by International Holding Board of Directors

^[27] AI use by directors and boards: Early insights, pg. 6.

^[28] 24-238MR ASIC warns governance gap could emerge in first report on AI adoption by licensees

^[29] Dario Amodei — The Adolescence of Technology

^[30] Organizations Aren’t Ready for the Risks of Agentic AI

^[31] Peter L. Bernstein, Against the Gods: The Remarkable Story of Risk (New York: John Wiley & Sons, 1996), pg. 8.