Australia is lacking in Asian skills, which is holding businesses back. The two main skills that Australia lacks are being fluent in Asian languages and having knowledge of the regions markets.
New reports by Asialink Business, the Institute of Management and PwC have found that only 10% of Australia’s ASX 200 companies indicate high levels of Asian skills. Research findings suggested that fluency in Asian languages was the least common skill possessed among ASX 200 companies. The average Asian capability score of an ASX 200 company Director is 6.42 out a maximum 30, and Senior Executives scored an average of 3.79 out of 30. Similarly, the 2016 census found that less than 3% of our top 300 boards are recognised as Asian, despite more than 12 per cent of Australians declaring their Asian ancestral background. Disappointingly, this shows Australia’s poor progress in the Asian market and culture.
There are reasons for Australia being behind in global markets. The risks seem overwhelmingly high for Australia advancing in Asian markets. Asialink Business’s Chief Executive, Mukund Narayanamuriti, declared to The Australian that having a long-term growth strategy and the right capabilities are essential for succeeding in Asia. He stated that “many business leaders feel constrained by a lack of information, pressure to show short-term results, and negative public perceptions about Asian investment.” Likewise, Mike Smith, the former ANZ bank CEO said, “Regulation and corporate governance have got people into such a state that you have got public boards who are very, very risk averse because of the personal liability.” Smith has blamed short-term investors, lawyers and accountants on boards for the failure of our top companies to grasp the fruitful opportunities in Asia. His judgements come as the Asialink study finds that 90 percent of our top 200 companies are not Asia ready.
Mike Smith said, “Investors in Australia think very short term basically because of the way they are measured…we should stop the performance monitoring of these [superannuation] funds on a short-term basis and instead look at them every two or three years. You are looking after 30-year money, who cares what happens after a quarter, you are not going to get the right investment decisions looking at it that way.” He also advocates the ways that Australia can prosper and grow. He states, “… Board meetings get consumed with the process of signing off on compliance reports and remuneration reports leaving little time for strategic, entrepreneurial thinking. As a response, some top companies are creating advisory boards, separate to the main company board, which allows members to focus on strategy and relationship-building in Asia, rather than governance.” If entrepreneurial reflection was put into place companies would be able to further develop their skills with Asian businesses.
One Australian company, Coca-Cola Amatil, is using entrepreneurial thinking and gaining high profits from the Asian markets. Other companies are also prospering from this, such as Telstra, Lend Lease, Newcrest Mining, REA Group, and Blackmores. They received a pass mark from Asialink with five out of eight members (63 per cent) of CCA’s board having substantial first-hand experience in Asian markets. Energy and resources, and financial services sectors were the best performing industries out of all of them.