After weeks of video conferencing I now consider myself to be a master of Zoom, especially when it comes to using creative backgrounds to hide the clutter behind me. In addition to learning Zoom, I have had a refresher in grade nine trigonometry and can report that I still remember how to do it. However, I have a bit more training to do on modern learning platforms that ask you to provide a step-by-step breakdown of how you reached the answer — or as I call it trigonometry process compliance.
Our current coronavirus (COVID-19) situation has created a new and interesting space to consider the role of governance; should I or should I not stockpile toilet paper, pasta, flour or hand sanitiser and what impact could that have on the wider community, particularly the most vulnerable in our community. Many of you registered for the free webinar on the economic implications of COVID-19. If you missed it you can download the recording.
This brings me to the discussion around superannuation (super) and the government’s new measure that allows people early access to a set amount of their super. Super works by compounding. Each month you add a little in and the total amount generates growth /returns over time. This growth and additional contributions are also added to the pool, so in the next period you generate returns on a greater amount than before…. and tax treatment is generally more favourable than savings outside superannuation. Simply put, this is a kind of snowball effect to grow the future accumulation of wealth. Consequently, if you start taking money out early, you rapidly lose the benefits of compounding growth.
At the time of writing, the Australian Taxation Office has approved 456,000 applications to make early drawdowns upon super — totalling $3.8 billion with the average withdrawal around $8,000. The unfortunate consequence of a scheme that allows early access to super, is that those with the least amount of financial resources, including super, are probably the most likely to dip into it and the least able to recover from doing so. I recently had a conversation with a member who beautifully defined governance, saying ‘Good governance is really about achieving fair and equitable outcomes for all’.
If we use this definition as the yardstick, we need to consider if early access to super will actually create greater inequity in retirement outcomes for Australians, by adversely impacting those who can least afford it. There is a challenge here for those of us charged with upholding good governance. Are the big picture and bigger impacts being properly considered by government or is it just a short-term economic focus?
Whereas process compliance in solving trigonometry might be fairly trivial in terms of human impacts, things take on a more serious note when governance and compliance activities have more direct human impacts — and in these COVID-19 times there are multiple ways in which we as governance professionals are being called upon to reassess our consideration of the human impact outcomes of our roles. There are no easy answers, but I think we are called to give it careful consideration.
I will close out by wishing you all great success with your own trigonometry or other distance education challenges and hope that your children go back to their teachers, with both a student and parent enriched experience and perhaps the words ‘that is not the way mum or dad showed me how to do it’. Old norms will continue to be challenged and we will all be called to adapt in shaping a fair and equitable future for the communities we serve.