“Independent directors play an important role in challenging management and holding them to account. The royal banking commission has highlighted that boards need to find a better way to oversee how management implements systems and frameworks and to monitor that a company has an appropriate culture in place,” she said.

This arguably calls for directors to act more like management and raises a number of important questions on the role of the board, she noted.

Culture and ethics have been dominant themes throughout the banking royal commission hearings, demonstrating that the banking, finance and insurance sectors “have lost the community’s trust and that organisations need to look closely at the ethical frameworks” underpinning their future governance models, she posited.

“The loss of trust in the banking sector is illustrated by the 2018 Governance Institute Ethics Index — it was the lowest scoring sector and dropped from -3 to -15,” she said.

“An ethical framework should sit at the heart of a company’s governance structure as an authoritative point of reference for all decision-makers and give shape to culture. Culture must be driven from the top. The CEO and board of directors are key to influencing and improving good corporate culture.”

The round seven hearings currently ongoing have also explored the importance of minutes and the amount of detail required.

“Minutes serve as a record of the key discussion points, to record decisions and the reasons for decisions and agreed actions. Approximately half of the respondents to our minutes survey agreed that board minutes should document the reasons for the decision and include sufficient background information for future reference, Ms George concluded.

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“The level of detail required is a matter of judgment and most company secretaries have the requirements of the ‘business judgment rule’ in mind when drafting minutes.”