Rethinking governance: Why Australia needs to take two-way governance seriously

Australia’s governance systems are under pressure. A series of corporate governance failures, cultural disconnects, and growing disillusionment have triggered widespread questions about accountability and trust. 

At the same time, First Nations peoples and communities continue to face disproportionate social and economic outcomes. This is largely due to the impacts of colonisation, which continues today through imposed governance structures and the persistent undervaluing of First Nations-led solutions. 

These failures are unjust, avoidable, and ultimately hold back progress for all Australians.

Across the country, a quiet revolution in governance is emerging. Through culturally grounded, relational, and place-based approaches, many Indigenous organisations are showing what good governance looks like when it is driven by culture, owned by Community, and accountable to future generations. 

Two-way governance, which brings together Indigenous and Western systems, offers a powerful response to the issues we face. It enables Indigenous organisations to uphold cultural authority while meeting the expectations imposed by Western governance mechanisms such as legislation or fiduciary responsibilities. By doing so, it provides a compelling model for governments, corporations, non-profits, and Indigenous organisations alike, one that supports self-determination, embeds more equitable decision-making, and strengthens institutional legitimacy.

Australia’s dominant governance systems reflect Western traditions: linear, hierarchical, and largely transactional. These structures prioritise compliance, financial performance, and risk oversight, often at the expense of inclusion, adaptability, and long-term impact.

This problem is not hypothetical. The past five years alone have seen repeated failures of corporate accountability. Governance issues within a range of private and publicly listed companies have exposed significant ethical lapses and blurred boundaries between personal interests and corporate responsibility. 

Recent research has also shown that more than half of ASX 200 Directors feel “ill-equipped” to navigate social license issues, including First Nations engagement, and are increasingly unprepared to lead inclusive institutions. Despite public commitments to equity, First Nations people make up less than half of a per cent of ASX 200 Directors (four of 1464), and only around one per cent of senior leaders in non-Indigenous organisations. 

Beyond the private sector, public and philanthropic institutions have also struggled to translate their commitments into culturally safe practice. This is especially true in First Nations policy, where programs are often designed with little or no community control. Governance has become something done to people, not with them, resulting in a disconnect undermines trust, outcomes and impact. 

While the repeated failures of corporate governance in Australia demonstrate that change is much needed, there is an opportunity to harness Indigenous governance models to improve both performance and accountability. The lessons are clear. Indigenous governance is not a marginal practice. It is a national asset. It is not a matter of whether this is needed – it is a matter of when and how we act.

Indigenous governance is not a theoretical construct. It is the practice of decision-making, leadership, and accountability grounded in thousands of years of lived experience. It centres kinship, reciprocity, consensus, and responsibility to Country and future generations. It is dynamic, localised, and adaptive. Most importantly, it is effective.

The Australian Indigenous Governance Institute (AIGI) has demonstrated that its model is working, and the power of governance done differently. It’s approach also provides a framework for what a transformation to strengths-based governance can look like and how.

The AIGI a national leader in strengthening Indigenous governance. It delivers a range of programs, from leadership development and scholarships to organisational consultancy and public resources. Its offerings are designed to support individuals, organisations and communities to lead with confidence, cultural legitimacy, and purpose. Its approach is strengths-based, relational, and rooted in deep cultural knowledge.

Backed by trusted partnerships and strong sector relationships, AIGI has evolved from a small not-for-profit into a credible national institution with the cultural authority, influence and maturity to drive change across multiple levels of governance. 

Indigenous organisations, including Aboriginal Community Controlled Organisations (ACCOs), are core to self-determination and advancing First Nations equality. Yet many face operational and governance constraints. These include short term funding cycles, underfunded back-office systems, limited support for board and leadership development, and increasing expectations without strategic resourcing. They also operate in a structural environment that incentivises competitiveness rather than collaboration and is fundamentally misaligned to First Nations ways of being. Despite this, Indigenous organisations remain some of the most trusted, effective, and innovative organisations in the country.

Two-way governance enables Indigenous organisations to integrate cultural authority with statutory governance expectations. By blending relational and regulatory governance models, organisations can strengthen legitimacy, sustainability and impact. Programs like AIGI’s masterclasses, board development and cultural governance advisory support this maturation.

Two-way governance blends Indigenous and Western systems to create governance structures that are culturally legitimate and legally robust. This is not about compromise – it’s about elevation. The model holds space for multiple ways of knowing, leading, and deciding.

Two-way governance is not only imperative in First Nations contexts not a reconciliation tool. For corporate Australia, two-way governance is an advantageous strategy. When implemented well, and by merging Indigenous and Western models, two-way governance enables organisations to:

Crucially, two-way governance requires balancing two forms of accountability: one to Indigenous communities and cultures, and another to external legal and institutional frameworks. While achieving this balance can be challenging, it is essential for effective and trusted governance. 

In practice, this might include consensus-based decision-making alongside fiduciary oversight, co-chair governance roles, or governance charters that reflect cultural values as well as corporate responsibilities. There are also a range of initiatives that show how First Nations leadership can be fostered to the national benefit. These include the AIGI's Emerging Directors Program, First Nations Director Scholarship Program (co-delivered with the Australian Institute of Company Directors), and its annual Indigenous Governance Forum (in partnership with the Governance Institute of Australia).

While these programs and others exist, they have historically been harnessed by Indigenous organisations. Moving forward, corporate Australia should look to how it can leverage the knowledge and resources of organisations like the AIGI to go beyond performative gestures and invest in real capacity-building, mentoring, and shared accountability.

Embedding two-way governance requires more than structural reform. It demands cultural humility, long-term commitment, and deep, reciprocal relationships. Whether you’re a government agency, philanthropic organisation, or corporate board, here’s how to start:

• Centre First Nations voices in governance and leadership: Actively include First Nations leaders in your governance arrangements – not only as advisors or stakeholders, but as decision-makers. Create culturally safe spaces within your boardrooms, working groups, and executive teams. This may involve setting up an Indigenous governance council, appointing First Nations directors, or formalising co-leadership roles. Shift focus from entry-level recruitment of First Nations to cultural retention, leadership development, and succession.
• Strengthen cultural capability across your organisation: Treat cultural safety as a board-level responsibility. Embed it in strategy, risk, and performance monitoring. Provide tailored cultural awareness and governance training for boards, executives, and frontline staff. This is not a one-off workshop – it’s an ongoing process that enables critical reflection, deeper understanding of Indigenous governance, and more effective allyship. Draw on First Nations educators and experts to lead this work.
• Harmonise governance practices through shared decision-making: Where possible, design governance arrangements that reflect both Indigenous and Western practices. This may include consensus-building processes, shared leadership models, or adaptive frameworks that recognise kinship, place, and cultural responsibility. Effective two-way governance doesn’t compromise either system – it elevates both.
• Build genuine, enduring relationships: Engage First Nations communities early and often, not just at moments of consultation or funding. Relationships must be reciprocal, grounded in trust, and built over time. This means investing in listening, co-design, and shared accountability. Avoid extractive approaches that seek input without resourcing or long-term involvement.
• Measure and report on what matters: Track progress using cultural as well as compliance indicators. Embed structured feedback loops, such as yarning circles, First Nations advisory panels, or reflective reporting against cultural governance principles. Ensure what you hear informs strategy, operations, and performance, not just sits in the margins. Share outcomes publicly and accountably.
• Support governance capacity in Indigenous organisations: Fund the time, tools and talent that enable strong governance in Indigenous organisations and ACCOs. This includes investing in board induction, succession planning, data systems, and leadership pathways. Governance maturity takes time and resources, yet many Indigenous organisations are expected to deliver impact without either.

The time for symbolic gestures is over. By investing in cultural capability, shared leadership, and structural transformation, organisations can build governance systems that are just, enduring, and genuinely representative of all Australians.

Get in touch to discuss how your organisation can build two-way governance into its structure. Learn more about Indigenous governance at the AIGI website.

Connect with Sarah Jones and Joshua McKinnon on LinkedIn.