Why Sector-Siloed Thinking Is the Riskiest Assumption a Board Can Make
By Mark Fenton, Principal Consultant, Governance Bureau | 8 September 2026
I hear a version of the same sentence in almost every sector I work in, just with the names changed. Commercial directors tell me governance scrutiny is really a not-for-profit problem, born out of a string of charity failures and public trust concerns. NFP directors tell me it’s really a listed-company problem, born out of ASIC enforcement and shareholder activism. Both groups are watching the other side of the fence, quietly relieved the tightening is happening over there and not here.
I think that’s the single riskiest assumption a board can currently make. The direction of travel is the same everywhere. Only the vocabulary differs.
The evidence, sector by sector
On the commercial side, the numbers are hard to wave away. In the March 2026 quarter alone, ASIC took enforcement action against 69 parties for corporate governance misconduct — not an occasional high-profile example, but sustained, systematic activity across companies of every size, including small private ones. ASIC’s own stated priorities for the year name governance failures relating to non-financial risk, and treat culture — tone from the top, tolerance of dissent, how a board responds to bad news — as a governance control to be actively assessed, not a soft concept to be assumed.
On the not-for-profit side, the ACNC’s Governance Standards were deliberately built as principles-based rather than prescriptive, which sounds like a lighter touch until you realise what it actually means in practice: a charity board is expected to work out for itself what “accountable and responsible” governance looks like for its specific organisation, and wear the consequences if a regulator later disagrees with its interpretation. There have been recurring calls, from governance and legal commentators, to review and tighten aspects of that regime rather than loosen it.
Layer on top of both of these a broader trend showing up in governance research across 2026: a persistent, widening gap between the skills boards actually need and the pace at which boards renew themselves, alongside rising (and often uncomfortable) pressure for genuinely meaningful board performance assessment, rather than a once-a-year formality. That pressure isn’t sector-specific either. It’s showing up in commercial boardrooms and community organisations at the same time, for largely the same underlying reason: stakeholders of every kind are less willing than they used to be to simply take a board’s competence on faith.
Why the direction of travel is the same everywhere
Strip away the sector-specific vocabulary — ASIC’s language of directors’ duties and non-financial risk, the ACNC’s language of public trust and charitable purpose — and the underlying expectation is identical: boards are expected to actively test and challenge, not passively observe and endorse. Regulators in both spaces are increasingly explicit that a director who attends every meeting, reads every paper, and never once pushes back is not obviously doing the job well. They may simply be doing it quietly.
This convergence isn’t a coincidence. It reflects a broader, cross-sector loss of patience with the idea that good intentions and a clean compliance checklist are an adequate substitute for genuine oversight. Once that expectation takes hold in one sector, it rarely stays contained to it — regulators, insurers, and the media all watch each other’s standards, and the bar tends to move in one direction only.
The mistake I see boards make
The mistake isn’t ignorance of the rules that apply to a board’s own sector. Most directors I work with know their own obligations reasonably well. The mistake is treating the tightening happening in the sector next door as irrelevant — evidence about someone else’s risk, not a preview of where their own regulatory and stakeholder expectations are heading.
A commercial board that dismisses NFP governance failures as a charity problem is missing the fact that public tolerance for “we meant well” is dropping everywhere, not just in one part of the economy. A community-sector board that assumes ASIC enforcement is a listed-company issue is missing the fact that funders, regulators and the public are increasingly applying commercial-grade expectations of financial oversight to organisations that never used to face them.
What I’d actually do about it
If you’re a Chair or director reading this, the useful exercise isn’t waiting for your own regulator to formally announce a change. It’s asking, honestly, whether your board would hold up against the standard now being applied one sector over — because that standard is very likely coming for you next, whether or not anyone’s written it down yet.
That’s an uncomfortable question to sit with. It’s also a far better one to ask on your own terms, in a quiet board meeting, than to have a regulator, a journalist, or a funder ask it for you.
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Mark Fenton is Principal Consultant at Governance Bureau, and has served as a non-executive director and Chair across commercial and not-for-profit boards spanning arts, disability, mental health, aged care, education and government advisory organisations, for over 23 years. Governance Bureau’s Governance Health Check and Audit, Risk & Finance Committee Advisory services give boards an honest, independent read on whether their governance would hold up against the standard now being applied across other sectors. Governance Bureau is a project of the Inspire Grow Flourish Society, a non-profit unincorporated organisation.