Australian boardrooms are confronting an unprecedented convergence of regulatory complexity, technological disruption, and stakeholder scrutiny. With mandatory climate reporting, rising cybersecurity threats, and AI disruption accelerating across industries, boards are making decisive talent moves to reposition their organisations. The focus is shifting from traditional oversight to strategic, innovative leadership in an increasingly complex environment. Moving from shareholder-only management to multi-stakeholder governance has become central to these strategies. Critical Talent Trends Artificial Intelligence: The New Governance Frontier – AI has emerged as perhaps the most significant governance challenge facing Australian boards with immediate implications. Board members need to ask two fundamental questions: What can AI do for our organisation? What risks does AI bring? Yet many Australian boards remain unprepared for voluntary AI reporting recommendations, opting to wait for potential mandatory frameworks in the future. This represents a fundamental shift from traditional technology oversight, now requiring directors capable of navigating complex AI implementation, risk assessment, and strategic deployment across business operations. Cybersecurity: Critical Board Responsibility – the cybersecurity landscape presents stark challenges that demand board-level attention, with Australian data revealing the magnitude of this threat: cybercrime reports reached over 87,400 in FY24, with incidents logged every six minutes. We're witnessing emerging directors with strong commercial experience and contemporary cyber skills securing board positions ahead of more experienced candidates who lack these specialised capabilities. This pattern suggests a growing recognition of cyber expertise as increasingly valuable in boardroom composition, reflecting the evolving threat environment and the rising importance placed on directors who possess relevant digital risk management capabilities . Climate Governance: From Aspiration to Action – climate governance has fundamentally shifted with the AICD's analysis showing that Australian boards are moving from aspiration and ambition to action, but progress is uneven. The regulatory framework is now concrete, with the introduction of mandatory climate reporting under globally-aligned standards representing a major milestone and requiring boards to increase oversight of climate risk, transition strategy, and scenario analysis. This transition demands directors who understand both the technical aspects of climate reporting and the strategic implications of sustainability transformation across business models. Board Diversity: Progress and Challenges – substantial progress has been made in gender diversity, with women representing nearly half of board appointments to ASX 300 boards over the last two years and holding 35% of ASX board positions overall. However, broader diversity challenges remain significant. There is still work to be done with 91% of ASX 300 Directors having an Anglo-Celtic background and only six openly LGBQTIA+ ASX directors. Consensus is forming around the AICD's and 30% Club's objective of securing 40/40/20 (40% men/40% women/20% of any gender) representation, but investors are applying pressure to see broader ethnic diversity that will better reflect businesses' customer bases and operational footprint. Shareholder Pressure – the shareholder activism landscape has intensified significantly, with Qantas’ shareholders rejecting the company's remuneration plan with a near-record 82.9% opposition following corporate scandals, demonstrating how reputation directly impacts board accountability. This escalating scrutiny requires directors who can navigate complex stakeholder relationships while maintaining strategic focus and delivering sustainable performance outcomes. Corporate Culture Accountability – corporate culture accountability has transformed from aspiration to a regulatory requirement. The events at Qantas, Mineral Resources, WiseTech and Nine Entertainment demonstrate that investors will hold boards accountable for cultural failures. Industry Super Funds have pioneered this change, with Aware Super requiring its fifty largest investments to answer eleven questions focusing specifically on conduct risk. This reflects broader stakeholder scrutiny, with over 10% of ASX 300 businesses receiving votes against their remuneration reports last year – the largest proportion since legislation was introduced.

With AI transformation being a key focus for organisations, maximising the opportunities lies in understanding the leadership requirements and the approach to people engagement. Derwent explored this critical topic with senior executives in Sydney last week at our AI and The People breakfast event, examining three areas shaping the future: How people functions can support AI transformation. How AI is reshaping people management and operations. How leadership and team recruitment criteria are evolving in an AI world. The panel discussion delivered practical insights on how leading organisations are navigating AI workforce transformation, including the real changes, challenges, and opportunities they're experiencing. We heard from Peter Tonagh , Chairman at Quantium, and Catherine Walsh , Group Chief People Officer at Qantas, who shared their perspectives on leading AI transformation we’re still learning to understand ourselves. Highlighting that as leaders we cannot wait for certainty, or we will remain behind. We must adapt to lead through more ambiguity than we have faced before. Key Themes & Takeaways The Leadership Imperative : AI represents a fundamental leadership moment defining competitive advantage, with success being 80% about people and 20% about technology. Discussion emphasised leaders must reimagine value creation, shift from the "department of no" to AI-enablers, and take a holistic approach addressing mindset, skillset, and toolset together. Leaders must become 'Chief Excitement Officers' providing permission with guardrails while managing cognitive load impacts within their organisations, recognising that employees will use AI regardless of policy and that organisations not offering AI tools will lose talent. Strategic Implementation and Human-AI Partnership : The conversation outlined starting everything with AI as the default approach, focusing on capability over tools and customer benefit through clear use cases as competitive necessity. Successful implementation augments human judgement with AI enhancing HR practices including performance management and coaching with examples of enhanced performance reviews and recruitment outcomes. Leaders must become conductors of human-AI teams through effective engagement, setting direction and making judgement calls while ensuring AI amplifies capabilities, maintaining oversight while AI tools help leaders become better coaches, and addressing bias as a user problem requiring active correction. Future Talent Strategy and Trust Evolution : Critical attributes for AI-ready talent emerged as curiosity, critical thinking, persistence, agility, and optimism, challenging myths about graduates who are actually more AI-attuned than before. The conversation addressed balancing innovation with care, building trust through transparency, and ensuring continuous evolution while maintaining human connection as irreplaceable. Discussion emphasised continuous tool evolution requiring adaptable capabilities, documenting and sharing learnings, and ensuring people develop judgment to question AI appropriately. These insights underscore the critical need for Australian business leaders to embrace AI strategically while overcoming conservative risk tolerance. The conversation provided a comprehensive roadmap for organisations navigating AI transformation, from immediate implementation challenges to longer-term competitive advantages that will define future success. Our thanks to Lindsay Every , Group Managing Partner at Derwent for hosting this panel discussion, and to our guest speakers and attendees for their valuable contributions. Continue the conversation We'd love to hear your perspective on this topic! For further insights or to explore how Derwent can help you or your organisation, connect with our team at sydney@derwentsearch.com.au . To express your interest for future Derwent events, please reach out to us at events@derwentsearch.com.au

Australian boardrooms are confronting an unprecedented convergence of regulatory complexity, technological disruption, and stakeholder scrutiny. With mandatory climate reporting, rising cybersecurity threats, and AI disruption accelerating across industries, boards are making decisive talent moves to reposition their organisations. The focus is shifting from traditional oversight to strategic, innovative leadership in an increasingly complex environment. Moving from shareholder-only management to multi-stakeholder governance has become central to these strategies. Critical Talent Trends Artificial Intelligence: The New Governance Frontier – AI has emerged as perhaps the most significant governance challenge facing Australian boards with immediate implications. Board members need to ask two fundamental questions: What can AI do for our organisation? What risks does AI bring? Yet many Australian boards remain unprepared for voluntary AI reporting recommendations, opting to wait for potential mandatory frameworks in the future. This represents a fundamental shift from traditional technology oversight, now requiring directors capable of navigating complex AI implementation, risk assessment, and strategic deployment across business operations. Cybersecurity: Critical Board Responsibility – the cybersecurity landscape presents stark challenges that demand board-level attention, with Australian data revealing the magnitude of this threat: cybercrime reports reached over 87,400 in FY24, with incidents logged every six minutes. We're witnessing emerging directors with strong commercial experience and contemporary cyber skills securing board positions ahead of more experienced candidates who lack these specialised capabilities. This pattern suggests a growing recognition of cyber expertise as increasingly valuable in boardroom composition, reflecting the evolving threat environment and the rising importance placed on directors who possess relevant digital risk management capabilities . Climate Governance: From Aspiration to Action – climate governance has fundamentally shifted with the AICD's analysis showing that Australian boards are moving from aspiration and ambition to action, but progress is uneven. The regulatory framework is now concrete, with the introduction of mandatory climate reporting under globally-aligned standards representing a major milestone and requiring boards to increase oversight of climate risk, transition strategy, and scenario analysis. This transition demands directors who understand both the technical aspects of climate reporting and the strategic implications of sustainability transformation across business models. Board Diversity: Progress and Challenges – substantial progress has been made in gender diversity, with women representing nearly half of board appointments to ASX 300 boards over the last two years and holding 35% of ASX board positions overall. However, broader diversity challenges remain significant. There is still work to be done with 91% of ASX 300 Directors having an Anglo-Celtic background and only six openly LGBQTIA+ ASX directors. Consensus is forming around the AICD's and 30% Club's objective of securing 40/40/20 (40% men/40% women/20% of any gender) representation, but investors are applying pressure to see broader ethnic diversity that will better reflect businesses' customer bases and operational footprint. Shareholder Pressure – the shareholder activism landscape has intensified significantly, with Qantas’ shareholders rejecting the company's remuneration plan with a near-record 82.9% opposition following corporate scandals, demonstrating how reputation directly impacts board accountability. This escalating scrutiny requires directors who can navigate complex stakeholder relationships while maintaining strategic focus and delivering sustainable performance outcomes. Corporate Culture Accountability – corporate culture accountability has transformed from aspiration to a regulatory requirement. The events at Qantas, Mineral Resources, WiseTech and Nine Entertainment demonstrate that investors will hold boards accountable for cultural failures. Industry Super Funds have pioneered this change, with Aware Super requiring its fifty largest investments to answer eleven questions focusing specifically on conduct risk. This reflects broader stakeholder scrutiny, with over 10% of ASX 300 businesses receiving votes against their remuneration reports last year – the largest proportion since legislation was introduced.