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Companies around the globe have been working to create high-performance boards made up of directors with diverse backgrounds, not necessarily in finance. However, since accounting and finance drive a significant portion of the strategic decisions that boards make, directors need, and are expected to have, a strong grip on finance and accounting to be effective. Directors who are well versed in finance are better able to understand what drives a company’s performance, obtain the most from its value drivers and foresee the likely strategic outcomes of board decisions. They also find it easier to resist management fads such as financial and accounting engineering and excessive borrowing as well as avoiding M&A pitfalls that could destroy the company’s value. Instead, they are better equipped to make wise decisions that create long-term value. Join us as we discuss the essential skills directors need to possess and how the IDAPNG can assist in the acquisition of said skills over high tea on the 15th Floor at the Grand Papua Hotel. Guest speaker: Rei Vagi - CFO at Credit Corporation

OVERVIEW In this Director Dialogue our expert speaker will cover: 1. The requirements of the Whistleblowing Act 2020 including what to do when receiving a protected disclosure. 2. The relationship between protected disclosures and employment law. 3. Case law on protected disclosures. 4. Practical guidance on 'Speak Up' policies and procedures in the workplace.

An audit examines your business's financial records to verify they are accurate. This is done through a systematic review of your transactions. Audits look at things like your financial statements and accounting books for small business. Many businesses have routine audits once per year. Join us and our expert speaker, Debbie Oli from Deloitte, as we discuss how audits provide credibility to a set of financial statements and gives shareholders the confidence that the accounts are true and fair. We will also be delving into how audits can help improve a company's internal controls and systems.

Green-hushing is when a company adopts a ‘radio-silence’ approach to environmental goals. Many companies do it. Some don’t realise they’re doing it. Others do realise but will not openly acknowledge it. Nevertheless, ahead of COP27 in Cairo, the topic has returned to the fore again. Climate scientists are piling criticism on entities they feel are ‘green-hushing’ their way through environmental responsibility. It follows the release of a report this week from Swiss carbon finance consultancy South Pole. From a survey of over 1,200 self-professed “heavy-emitting” companies across 12 countries, 25% of respondents were “keeping quiet” about their science-based climate goals. These companies have, by and large, set themselves net-zero targets; they just aren’t publicising them, nor have they any plans to. What is green-hushing? Green-hushing is when companies take steps to stay quiet about their climate strategies. They do this through avoidance or refusal. If somebody asks about their climate goals, they decline to answer. If nobody asks, they don’t do anything. There are two main reasons for ‘green-hushing’: Companies don’t want to be called out if they fall short of their stated targets. Companies don’t want to be called out for ‘greenwashing’ (persuading stakeholders that they are more environmentally friendly than reality). ‘Green hushing’ was first coined in the late-2000s but has hovered chiefly under the radar when compared to ‘greenwashing’, which enjoys widespread familiarity. How are green-hushing and greenwashing related? It’s complicated. Green-hushing is often used to avoid being called out for greenwashing, and yet at the same time; some critics say green-hushing is an example of greenwashing since companies have no public benchmark despite claiming to be acting in the interests of the environment. The cycle is primarily one based on fear. Companies that green-hush believe there is little value and many risks in being truly open about their climate goals. Even if they have confidence in those goals, they don’t want to brag about them for fear that there is something they may be unknowingly omitting or exaggerating. So, for the time being, their best solution is to avoid the topic entirely, giving them the appearance of trying to hide their climate impacts. Does green-hushing matter now? Yes. It is hitting the news again, and South Pole’s report has suggested that it’s far more common than the corporate world thinks. One in four companies withholding climate strategies is enough for South Pole’s CEO Renat Heuberger to warn that the trend may be catching on. “We see that sustainability-minded businesses are increasingly backing up their targets with science-based emissions reductions milestones, which is absolutely the right approach,” he said in a statement accompanying the report’s release. “But if a quarter today aren’t coming forward with details on what makes their target credible, could corporate green-hushing be spreading?” What’s the risk of green-hushing for boards, and what can they do about it? It’s a simple chain: green-hushing can put companies at odds with their ESG goals; ESG goals are part-motivated by investors and other stakeholders; therefore, green-hushing risks putting companies at odds with their stakeholders. With suggestions that the concept is now more popular, boards should embrace it as a wake-up call. They should know what the concept means and be crystal clear whether their organisation is using the strategy in its reporting. In summary Green-hushing is withholding information on climate strategy for fear that releasing it will bring some form of reputational risk. For some, it’s a way to avoid accusations of green-washing. For others, it’s a sign that an organisation is already greenwashing. Boards should be conscious of the longer-term consequences of such an action, particularly in a corporate world more concerned by climate change than ever. by Dan Byrne on 26 October 2022

The economic shift to overcome global issues has increased the demands from almost all market forces, with part of the accountability falling on the shoulders of those that provide capital. Consequently, asset managers are increasingly integrating environmental, social and governance (ESG) issues into portfolio considerations and to become forceful stewards of their investments. SquareWell Partners’ annual study of 50 of the world’s largest asset managers, aims to bring to light how these asset managers are approaching some of the most prominent issues in today’s global financial market.[1] Below we highlight some of the key findings from the study that is relevant for board members to consider: ESG Becoming Mainstream Global challenges, such as climate change, biodiversity and societal inequalities, have led to a shift in investor behaviour, whereby incorporating ESG factors in portfolio construction has become commonplace. By the end of 2020, assets in ESG funds hit a record of almost $1.7trillion, up 50 per cent over the previous year, according to Morningstar.[2] Over the last year, the Covid-19 pandemic further underscored the necessity of building resilient business models, based on multi-stakeholder considerations. Indeed, Morningstar reported 51 out of 57 of its sustainable indices (89 per cent) outperformed their broad market equivalents in the first quarter of 2020, highlighting the benefit of incorporating ESG factors into investments. The United Nations-supported Principles of Responsible Investment (PRI) has been a driving force behind the growing integration of ESG factors in the investment process. Adherence to the PRI principles, as well as the PRI assessment scores, are now factored into the asset manager selection process of many asset owners. In the study conducted by SquareWell, it was found that all but one of the world’s largest 50 asset managers are a signatory to the PRI. However, it is crucial to look beyond whether an asset manager is a PRI signatory to discern whether investors are in fact taking ESG matters into account in their decision-making processes. Companies can get a clearer picture of an asset manager’s position through their investment and voting policies, public stance on key ESG topics, support for ESG initiatives, etc. Incorporation of E&S topics into voting policies Asset managers predominantly focus on governance issues, such as board composition and executive pay, in their voting policies. But are often encompassing of environmental and social (E&S) issues, too, with climate change and human capital sections becoming increasingly common. The SquareWell study found that 32 of the top 50 asset managers have included distinct E&S guidelines in their voting policy, up from 19 in 2019. Such changes to voting policies can have immediate and tangible impacts on investee companies. For example, in 2017 State Street Global Advisors started pressuring companies to have gender diversity within boards through its Fearless Girl campaign. Three years after introducing the campaign, female board members had been added in 681 companies. The asset manager now votes against all board members on the nominating committee of an investee company in target markets that doesn’t have female members on its board and pressures companies to improve their disclosures on diversity, in all its forms, within their workforce. Public positions on EGS topics Asset managers have also increasingly been offering their perspectives on key ESG topics, such as climate change, biodiversity and human capital, through position papers. These position papers provide further substance on their motivations and/or expectations when compared to voting policies, which companies should be aware of. The study by SquareWell found that, out of the top 50 asset managers, 34 produced position papers on ESG topics, compared to 24 in 2019. For example, nine of the top 50 asset managers published dedicated insights on their increased demand for transparency on portfolio companies’ approach to tax. Guided by the principle that a company’s approach to tax is a board responsibility, investors demand companies publish a tax policy and a country-by-country breakdown of tax payments to ensure that taxes are paid where economic value is generated. ESG reporting standards Over the years, many ESG initiatives have emerged. For the study, SquareWell selected several that have seen increasing levels of support by investors. Despite the prevalence of the Global Reporting Initiative (GRI) for multi-stakeholder ESG reporting, investors have started to show increasing interest in more targeted and material frameworks, such as the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD) of which 27 and 43 of the 50 asset managers supported, respectively. The high interest in the TCFD was to be expected, given its strong acceptance by the financial sector due to its association with the Financial Stability Board (FSB). SASB, originated in the US and initiated by investors with an emphasis on financial materiality of ESG topics, is gaining global acceptance as it reduces the need for investors to make sense of large amounts of sustainability information, thus reducing the analytical burden. The upcoming merger of SASB and the International Integrated Reporting Council will alleviate the US-centric limitations of SASB and could potentially lead to another boost in uptake. “COMPANIES AND INVESTOR RELATIONS TEAMS NEED TO DETERMINE WHICH ESG RESEARCH AND RATINGS PROVIDERS THEIR TOP INVESTORS ARE USING AND, WHERE APPLICABLE, WHAT DATA IS USED IN THE INVESTOR’S PROPRIETARY MODELS” The support of passive giants like BlackRock and Vanguard for both SASB and TCFD has resulted in a spike of uptake by other asset managers not wanting to miss out. While large passive managers may have ‘hard’ requests on reporting frameworks, they do not expect full alignment overnight but expect companies to get the process started of disclosing material ESG topics relevant for their sector. Fortunately for companies there is some overlap between existing reporting standards and frameworks, which helps to assuage some of the reporting fatigue. ESG ratings – the new influencer in town ESG research and data providers play a critical role in making sense of the heterogeneous sea of ESG metrics; however, differences in methodologies between ESG ratings providers can result in very different scoring. To overcome these disparities in ratings, investors are taking into consideration multiple perspectives, with 20 of the 50 asset managers consuming information from at least four ESG data and research providers. MSCI is the preferred provider for ESG research and data, unsurprising given its coverage of more than 14,000 companies and its ability to link their ESG ratings to the creation of ESG indices. To this end, SquareWell notes that MSCI is the ESG ratings provider for 28 (out of 40) of the top ESG ETF products globally (those above $1billion in assets under management). To efficiently utilise ESG ratings, investors need to select a provider that best aligns with their own ESG strategies. That said, the extent to which ESG information is diluted and standardised by rating providers may reduce its value towards the abstruse edge needed for outperformance in investments. This has led to an increasing number of asset managers looking to develop proprietary ESG ratings and tools, with 30 of the top 50 asset managers having created their own ESG ratings. For example, under Legal & General Investment Management’s (LGIM) Climate Impact Pledge, LGIM focusses on sectors that are considered key to meeting the world’s net-zero emission challenge and companies are assessed using a proprietary model that is fed by five different ESG research and data providers, including CDP. Companies and investor relations teams need to determine which ESG research and ratings providers their top investors are using and, where applicable, what data is used in the investor’s proprietary models. Companies can then take a top-down approach and map out what ESG factors the market evaluates them on to maximise the alignment of their ESG practices and disclosures. By Estelle Guichard, Partner – Head of Responsible Investment Research at SquareWell Partners Estelle’s areas of expertise include corporate governance, shareholder activism and shareholder engagement. Estelle has been advising listed companies on governance issues in Europe for the past eight years after serving as an investor relations consultant for six years, where she developed an in-depth knowledge of the financial community in Europe. She holds a Master’s from Tours-Poitiers Business & Management School. #ESG #shareholder #reporting #investment #governance #accountability

The role of the chair, to lead the board so it performs successfully, has been changing as societal expectations of effective board leadership evolve from ‘control and command’ through to ‘lead, enable and facilitate’. The challenges of the pandemic have accelerated the pace of change on many boards and increased demands and expectations on the role of the chair. Using emotional intelligence to deliver effective leadership The days of a hierarchical ‘command and control’ style are now history. Effective board leadership demands emotional intelligence, an ability to put ego to one side and become a truly facilitative, emotionally intelligent and enabling leader of the board. In an increasingly challenging and virtual world, there’s a need for adaptable, agile leadership. This requires chairmen to move to a more facilitative leadership style – one that embodies emotional intelligence. Today’s successful chairmen generate trust, build engagement, provide leadership and discipline to their boards, yet embody empathy to create and nurture a board culture of psychological safety. This allows bad news to travel to the board faster than good, empowers directors to have the courage to constructively challenge and creates an environment in which it is fine not to have all the answers, particularly during these difficult times. The foundation of an effective chairman is role clarity Role clarity is the foundation of an effective board and chair. Good chairmen know and respect the boundaries between the board and the CEO, and particularly between the chairman and the CEO, to avoid ambiguity and confusion. The boundaries between the CEO and the chairman should reflect the nature of the company, the strategy being pursued, the performance and impact in these times on the company’s prospects due to Covid-19. Purposeful chairmen are clear about the value they add in leading the board. They have board composition, workplans and calendars which reflect this value delivery, and a culture that regularly assesses board, CEO and individual director performance in stewardship of the agreed value creation. Make the most important relationship in the governance landscape strong and effective The most important relationship in the governance system is between the chairman and the CEO. The quality of this relationship affects the performance of the company, as well as impacting on the rapport between the board and the top team. In our experience, if this relationship is not working, then one or the other will leave the organisation. Success factors include honesty, candour and a relationship where the chairman and CEO are friendly, but never seen as friends. The relationship must be built on trust, respect and absolute role clarity. Future focus The health crisis has highlighted the need for the leader of the board to refocus directors on future strategy. Good chairmen must therefore think several meetings ahead and direct the attention of their board beyond the day-to-day and onto the purpose and future performance of the company and the board. Too much time and energy focused on oversight and past performance is often at the expense of future planning, strategy and better anticipation of risk. Create and maintain a first-rate board For the board to be effective, the chair needs to look at its composition and consider if it is fit for the future. Good, well diversified boards bring a range of perspectives to generate better decisions and outcomes. This requires a board that not only demonstrates the five drivers of diversity – demographics, skills, experience, thinking styles and circles of influence – but a truly inclusive and psychologically safe board culture where every director feels welcome, wanted, respected and valued. It is the job of the chairman to move the board beyond tokenism to true inclusion to deliver the added value the increased diversity of directors brings. “IT’S TIME FOR GOOD CHAIRMEN TO STEP UP AND BECOME GREAT CHAIRMEN. TO DO SO THEY MUST EVOLVE TO ENSURE THEY CONTINUE TO ADD MAXIMUM VALUE IN LEADING AND FACILITATING EFFECTIVE DECISION-MAKING BY THE BOARD THROUGHOUT THESE DIFFICULT TIMES, AND BEYOND.” Effective induction process The chairman must take the lead in making inductions work better. There’s no point dumping a pile of reading material on a new director and expect them to hit the ground running. To ensure the new arrivals add value as early as possible, which is particularly important in these challenging times, they must put an 18–24-month induction and learning journey in place. The chair must also continuously strive to improve this process, based on objective feedback. Leading the review of the CEO, chairman and the board The purpose of an assessment or review is to improve board performance. Chairmen must increasingly take responsibility to ensure that they, the board and CEO are ‘fit for the future’. They always need to be asking, does the board have the composition, leadership, capability, capacity and culture to deliver success for the organisation? To this end, they must take the lead in the areas of reviews, succession planning processes and recruitment to the board. The chairman, board and the CEO derive substantial benefit from a structured and systematic performance review with clear accountability and follow up. The need for this approach is even greater as boards continue to navigate through a Covid world after a tumultuous 2020. The chair needs self-awareness Finally, chairmen need to have self-awareness. This means they should honestly ask themselves if they are the right leader for the board today and in the future. They need to answer key questions, such as, ‘am I leading the board in a way that’s adding value?’ And ‘is my approach enabling or constraining the work of the board?’. It’s good chairmen who will consider if they need additional training, mentoring, experience or development, to ensure what they bring to board leadership remains relevant and truly value-adding. It’s time for good chairmen to step up and become great chairmen. To do so they must evolve to ensure they continue to add maximum value in leading and facilitating effective decision-making by the board throughout these difficult times, and beyond. This requires chairmen to be emotionally intelligent, to establish role clarity on the board, have a strong relationship with the CEO, be future focused, ensure a diverse board, deliver an effective induction process, lead reviews of the board and have self-awareness. By John Harte, Managing Partner at Integrity Governance John leads a global team at Integrity Governance, a company that is focused on making boards more effective. A boardroom expert working with multinationals, SMEs, trade associations and not-for-profits, he provides practical, impartial advice to directors, business owners, executives and CEOs to help improve board performance. John and his team have advised the boards of organisations in the UK and around the world since he founded Integrity Governance more than 16 years ago. #chairperson #leadership #emotionalintelligence

Providing a platform for the exchange of experiences through seminars and networking events. Strategise. Optimise. Globalise. CONTACT US TODAY! ABOUT US IDAPNG is a non-profit, member-based association representing directors and aspirants in PNG across the for-profit, not-for-profit and public sectors. ​ We foster the sharing of knowledge and wisdom through education, professional development programmes and services, and thought leadership. READ MORE >> OUR PARTNERS Our partners are charged with promoting good corporate governance and strive to ensure their own governance complies with the highest standards. ​ They assist us in equipping directors in PNG with the necessary competencies to build better businesses for a better world. READ MORE >> OUR VISION To be the recognised authority on leading boardroom practices and to ensure that today's directors are prepared for tomorrow's challenges. OUR MISSION To promote good corporate governance and improve the effectiveness of boards of directors, particularly by means of appropriate director training, professional development and boardroom best practice. OUR VALUES Integrity, Enterprise, Fairness, Transparency, Accountability, and Efficiency. READ MORE >> SERVICES Course Referrals Professional Development Business Information Governance Forums Board Advisory Board Evaluations Director Placements Mentorship / Coaching READ MORE >> EVENTS Workshops / Seminars Summits / Conferences Corporate Networking Member Social Events Awards Ceremony READ MORE >>

Resources and Guides A range of guides, resources and templates to help you embed best practice governance in your boardroom. Digital Transformation GNDI guide to help directors lead successful digital transformation. ​ Cyber Security The reliance on online technology has increased the risk of data privacy breaches, fraud and cyber attacks . Conflicts of Interest A practice guide to help directors manage conflicts of interest in the boardroom and model good practice. Climate Risk Boards must respond to climate-related issues to ensure the sustainability of their organisations. Whatsapp 76343350 Email director@idapng.org Follow

Leadership in ESG Integration A study into board oversight, implementation and disclosure. ​ WHAT IMPACT DOES ESG HAVE ON YOUR COMPANY? ​ Environmental, social and governance issues have rapidly risen up the board agenda and continue to evolve. A stream of new regulation around climate change mitigation, bring new responsibilities, risks and opportunities for companies. ​ How ESG is framed within the board, which issues take priority and how they are integrated into corporate strategy is a challenge for business leaders across industry. Companies increasingly showcase their ESG credentials, but what is the reality? To what extent, and how effectively is ESG being integrated into the corporate strategy of PNG companies? ​ The IDAPNG with our research partner Deloitte, the international audit, tax and advisory firm, is conducting a major new study into how boards are approaching ESG – it will reveal the challenges business leaders are finding most difficult and, crucially, the real progress being made on integration by listed companies, public interest entities, and privately owned firms in Papua New Guinea. ​ ​ How corporate boards and senior management are integrating ESG into company policy is the subject of a new study. The research will reveal the challenges business leaders are finding most difficult and, crucially, the real progress being made by listed companies, public interest entities, and privately owned firms. ​ How far boards and senior management are taking stock of ESG, the real difference its making to their corporate strategy and policies, will provide a useful benchmark for leadership teams about an issue that has rapidly grown in significance across industry in Papua New Guinea. ​ We very much hope you will be interested in taking part. Individual responses to the survey will be kept confidential and it takes no more than 10 minutes to complete. The findings of the survey will be shared with Members in the coming weeks. ​ Please take a few moments to participate in the online survey below. ​ Thanks very much, The IDAPNG team ​ ​ ESG SURVEY The survey has 5 qualifying questions and then 23 questions specifically on ESG, and should take no more than 10 minutes to complete. This survey is open to respondents who work for firms with headquarters or subsidiaries based in Papua New Guinea. ​ (If you happen to be a board member on more than one company you are welcome to fill in this survey multiple times. Please note, you will need to complete & submit each survey in full each time) Your industry and location 1. Which of the following best describes the principal industry of your organisation? Choose an option arrow&v If industry is not listed, please specify below. 2. Do you work in a PNG based company? Yes No Your organisation and role 3. Which of the following best describes the organisation for which you work? Choose an option arrow&v If organisation is not listed, please specify below. 4. Which of the following best describes your job function or title? (Please select ONE best response) Choose an option arrow&v If job function/title is not listed, please specify below. 5. What is the annual financial turnover of the organisation you work for? K0 - K10 million K10 million - K100 million K100 million - K250 million K250 million - K500 million K500 million - K1 billion Over K1 billion Survey questions 6. Our board is engaging with ESG issues because it believes these issues are increasingly material to the business. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 7. Our board is experiencing pressure from stakeholder groups to improve its performance on key ESG issues. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 8. If your board is experiencing pressure from stakeholder groups - please select any which apply. Customers Employees Retail shareholders Institutional shareholders Banks / Lenders Suppliers Regulators Community groups 9. Our board fundamentally reviewed its company mission / purpose specifically due to ESG concerns in the last 5 years. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 10. Our board reviews risk management processes to ensure material ESG factors are accounted for. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 12. Our board has a policy for stakeholder engagement that feeds into ESG. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 14. Our board has published an ESG or sustainability policy, or something similar. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 16. ESG issues are routinely discussed at board meetings and given sufficient time. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 18. Our board has access to specialist external advice on ESG issues where this is deemed necessary. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 20. Our board understands the actions needed for the organisation to achieve NetZero. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 11. Our board has overseen changes to the organisation's supply chain as a result of ESG due diligence. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 13. Our board has approved executive compensation that includes ESG criteria. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 15. Our board has a formal structure for ESG governance. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 17. Our board has sufficient competencies, skills and understanding with regards to ESG. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 19. Our board has made efforts to link ESG strategy to the business' commercial goals. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 21. Please select any of the following groups the board has made efforts to engage and consult on ESG issues. Shareholders Employees Customers Suppliers The local community Special interest groups such as NGOs or campaigners Other (please specify) If group is not listed, please specify below. 22. Our organisation's ESG monitoring and reporting is already of a high standard and is continuously improved. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 24. Our board has information gaps in its ESG disclosures. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 25. If there are gaps in your board's ESG disclosure, where do you perceive these to be? Please select any of the options below. Environmental disclosure Social disclosure Governance disclosure 26. Our board employs an independent auditor to assess the business' ESG activities. Yes No 23. Our board is receiving adequate ESG data and information from management and internal sources to fulfil its ESG responsibilities. Strongly agree Agree Undecided / Unsure Disagree Strongly disagree 27. Please select any of the following frameworks and standards that your board has signed up to or intends to sign up to within the next 12 month? (Select any which apply) Carbon Disclosure Project (CDP) Corporate Sustainability Reporting Directive (CSRD) Global Reporting Initiative (GRI) Science Based Targets Initiative (SBTi) Sustainability Accounting Standards Board (SASB) Task Force on Climate-related Financial Disclosures (TCFD) UN Principles for Responsible Investment (PRI) World Economic Forum (WEF) Stakeholder Capitalism Metrics SASB standards Stewardship Code ISSB and IFRS Sustainability Disclosure Standards Other (please specify) If framework/standards are not listed, please specify below. 28. We are interested in your views on ESG and its effect on the priorities for your board. What in your opinion of the impact of ESG on your board activities and how do you see this unfolding during the next 12 months? Submit Thank you for your participation! ​ Your input is very much appreciated. A detailed report, based on the results of the survey will be available in 2024. ​ Yours in governance, the IDAPNG team.