NFP Directors Getting on With Growth in Uncertain Times

Australian directors from across the not-for-profit and business sectors are planning to go for growth in 2017, despite a year of unprecedented uncertainty and concerns over government policy making, according to a new survey released by the Australian Institute of Company Directors.

The bi-annual Director Sentiment Index, conducted by Ipsos on behalf of the AICD, measured the opinions and future intentions of directors on a range of issues including Australian and world economies, government policy and governance regulations.

Not-for-profit directors were the second-highest proportion of respondents, accounting for 33 per cent of the survey base.

The index showed that directors across sectors are planning to increase investment and boost employment over the next 12 months, despite global political and economic uncertainty seeing the overall sentiment among Australian directors drop by five points.

In the year ahead, 34 per cent of directors expect their business to increase both staffing levels and investment.

The AICD said expectations in these areas were at their highest levels in three years.

AICD CEO John Brogden said the results of Brexit and the US election had clearly dented overall sentiment across both the not-for-profit and business sectors.

“2016 will be a year that we’ll be talking about decades from now. It has surprised us and stunned us at almost every turn,” Brogden said.

“That is reflected in the fact that the index shows directors are concerned with the state of policymaking in Australia. It also shows directors listed economic policy uncertainty (38 per cent), political instability (33 per cent) and short-termism (32 per cent) as the top-three disruptors over the next decade.

“These issues are of particular concern to the NFP sector where organisations often have less financial ability to change course if there are sudden changes in political headwinds.

“As highlighted in our 2016 NFP Governance and Performance Study, NFPs certainly need to make a profit. I think the uncertainty of the past year has served to further highlight the importance of making sure NFPs and charities have adequate reserves on hand.”

The index also showed directors were concerned about a lack of infrastructure, taxation reform and the size of the federal budget deficit. The top-five issues for the federal government to focus on are the ageing population (36 per cent) and education (35 per cent).

“Directors have been crying out for many years now for the government to invest in infrastructure,” Brogden said.

“Interestingly, for the first time directors have identified renewable energy sources as the top priority for infrastructure investment, followed by regional infrastructure and roads.

“But this report also shows that directors from a wide variety of backgrounds are calling for more focus from government on our ageing population and education services – both key areas of focus for the NFP sector.”