The governance brand
Last year the Australian division of the Institute of Chartered Secretaries and Administrators (ICSA) changed its name to Governance Institute of Australia (GIA). CSj interviews Tim Sheehy, Chief Executive of the GIA, about the rationale behind the rebranding exercise.
Your rebranding exercise has attracted a lot of interest here in Hong Kong and globally – what was the rationale behind the name change?
‘Many years ago, the board and management came to the view that if the institute solely relied on qualifying people as company secretaries, it would not exist in 20 years’ time. We don’t have a statutory requirement for companies to employ a company secretary unless you are a listed company, and for those listed companies there is no statutory requirement that they hire someone who is qualified by this organisation. So there are simply not enough companies that will hire company secretaries, whether they are “Chartered” or not, to sustain this organisation. So this organisation had to diversify – it was as simple as that.
The other thing we had to do was to acknowledge that the awareness of the term “Chartered Secretary” in the Australian market was really low. To be honest, we started de-emphasising the term Chartered Secretary 10 years ago and we started emphasising the term “governance professional” in its place. Governance roles were broadening out of the boardroom into risk management and compliance. These were important trends.
So it was a strategy for sustainability, and I mean sustainability in terms of member numbers. If we were not going to bring people in as traditional Chartered Secretaries only, we had to start to look at people who were para-professionals, or who were interested in governance and might be working as a company secretary but as a small part of their role. We had
to broaden our membership to include those who came from not-for-profits and small organisations and who weren’t prepared to do two years’ worth of study in order to qualify as a Chartered Secretary.
So we started back in 2007 offering alternative pathways and programmes, and we brought in a whole new category of membership in 2009 called “certificated members”. We are the only division in the Institute that has the power to do that. Our certificated members are not members of the ICSA, they are only members of the service company – Governance Institute of Australia. Their post nominal is “GIA(Cert)”.
We got consent from the International Council back in 2007 or 2008 to do this because we said we needed to broaden our membership base or we wouldn’t have a sustainable income and membership level. We also pointed out that these people would probably go on to be Associates and Fellows of the Institute if we just let them to come in and get a taste of the place.’
How many certificated members do you have?
‘We finished off last year with 896 and we will have between 1,150 and 1,200 by the end of this year. By the time it got to 2012 we had a critical mass of people who had come in via a different kind of qualifying programme, and who were not company secretaries and certainly not Chartered Secretaries. So we saw the name as not reflecting the membership even in 2012 and 2013, and certainly not reflecting what the future membership would look like. We also had very little goodwill in the term Chartered Secretary and we came to the view that the name was holding us back.’
Was that lack of goodwill with the name Chartered Secretary partly due to the feeling that the concept of having a royal charter from the Queen of England is outdated?
‘Yes, and that was one of the reasons we started to de-emphasise the term 10 years ago. Certainly the concept of the royal charter is kind of quaint and its cache just isn’t the same. We didn’t really want to invest hundreds and thousands of dollars trying to get traction for something where we would be fighting the trend anyway, so we just stopped. If you look at all our marketing collateral from about 2004 onwards, we very rarely use the expression of Chartered Secretary.’
ICSA New Zealand has followed your lead – rebranding itself ‘Governance New Zealand’ – do you think we’ll be seeing other ICSA divisions becoming governance institutes?
‘There are eight divisions in the Institute and they all differ because they all have different membership compositions, different ways companies employ their members. There is certainly a difference between the environment in Hong Kong/ China and Australia.’
Views on this issue can be quite polarised. I imagine you also encountered opposing views in your rebranding?
‘Yes. There were people who were not keen on the change but many of them had not appreciated the fact that they themselves would still be called Chartered Secretaries. They were much more comfortable when we explained to them that “you are still what you are”. Our Chartered Secretary members still have the right to use their professional designation and their individual relationship with the Institute has not changed. The values of being part of the Chartered organisation have not been dismissed. The divisions know that being part of the ICSA gives us an independent third-party standard of approval of what we do and that can’t be dismissed.
Roughly 45% of the total membership lodged a proxy (which is pretty high) and, of those who lodged a proxy, 19% were against the change. We were relatively surprised to find that the 19% were evenly distributed across the age groups. There was a slightly higher percentage of older members, but in no way was it dramatically skewed to older members. There were representatives in that 19% from every 10-year age band. But our dropout rate didn’t change – by and large all 19% renewed their membership.’
Am I right in thinking that, of the total vote, you got 81% in favour of the name change?
‘Yes, we got 81% in favour. We wanted more. We were hoping to have above 90% but in hindsight that was a bit naïve because this was a big change for some people.’
Do you think there is a danger that, if the profession as a whole doesn’t move in a similar direction, membership numbers will continue to fall as they have been falling in the UK in contrast to here in Hong Kong and Australia?
‘Yes I do and I will elaborate on that but first I should correct you – in Australia the only reason our membership numbers have been going up is because we have been including the certificated members. The number of members that are members of the ICSA have been declining slightly. The only country within the ICSA where the numbers are going up significantly is Hong Kong/China.
So if we hadn’t done anything about this situation we wouldn’t have had a sustainable number of members. We have made other changes to address this situation. This year we introduced another qualifying programme of the same level and rigour as the international qualifying programme which will qualify people as risk professionals. It’s a two-year course and members who qualify via this route will be Associates and Fellows of the institute with the post-nominals AGIA and FGIA respectively.
But to come back to your question, I do think that the other divisions need to confront these challenges. The Hong Kong/ China division has got it on a plate – it has a statutory requirement to have a company secretary and it has China sitting there. None of the other divisions are in that position.’
Do you think the job title of ‘company secretary’ will also eventually be changed – some have suggested that ‘chief governance officer’ would be a good alternative?
‘By and large I don’t think it is going to change. There have been some, and I emphasise some, cases where company secretaries have changed their job title, but that discussion has gone by the by. There is a role called the company secretary and it has become a more important role. I don’t see it disappearing and we certainly don’t advocate that.’
Some opponents of a name change have pointed out that company secretaries add value through the broad remit of their role – looking after governance is only one aspect of what they do.
‘I am okay with that. Company secretaries perform many different functions, it is quite an administrative generalist role and that’s why the qualifying programme covers so many different areas. I accept that, it’s just that no one has been able to translate that into a general acceptance outside the Institute. We just gave up trying.
Here, certainly the bigger and more enlightened companies know that a company secretary does a whole lot more than just compliance and taking minutes, we rarely see a job description from a decent company which has a narrowly focused job description. In a good company it is certainly well understood that company secretaries do a whole lot more than compliance and whether they are called the board secretary, the company secretary or, like in the US, the corporate secretary, I don’t think it matters.
We would be foolish to throw away that franchise and to dis-associate with the ICSA. We will use whatever leverage there is to back the professional designation of the “Chartered Secretary”, but it is not the sole thing we will focus on.’
You mentioned that you have launched a new qualifying course for risk professionals – do you think that the profession generally, both in UK and around the world, needs to broaden its curriculum?
‘Yes. There is a review of the “professional standard”, and within that a review of the curriculum, which is going on now and I think there is a general recognition that the curriculum needs to be broadened to include more risk management. Perhaps even “Company Secretarial Practice” needs to be an elective.’
How much preparation went into the rebranding process?
‘It had been on the table for nine years and we only recently got to the point where we felt we could get it across the line. So we took it to a vote. We got 81% in favour and we needed 75%, but the difference was only about 300 to 400 people which isn’t that many.
We worked with an outside branding organisation. Initially they couldn’t see why our different members are attracted to this organisation because they all have different roles. For the Institute of Directors or the Institute of Chartered Accountants it is obvious. But the common thread is that they all value the practice of good governance. They can all see that if their companies practise good governance this would improve their performance – that was the common thread, not precisely what you do each day. That is what we leverage off today.’
Were you surprised that the new name was still there for the taking? Governance has been getting a lot of attention these days in the business environment.
‘Yes. It was there for the taking, no one had registered it. Someone had hoovered up the domain name but they weren’t using it. They were a peripheral business and probably thought that they might use it one day, but they didn’t develop the business and we reached an agreement and bought it from them.
But now it’s so much easier. It’s a simple name. Everybody knows what an Institute is and most people now know what governance is. It used to be difficult explaining where we work. When you
said “Chartered Secretaries of Australia” you’d get this look. Now we don’t need to go through that anymore. I keep saying to people it’s like a snake shifting off its skin – we had already changed on the inside so we just had to finish it off and change on the outside.’