In December, after the Conservatives returned to power, he accepted the position of Governor-General of Australia offered to him by Australian Prime Minister Stanley Bruce, who opted for Baird partly because of his political experience and partly because he was a more modest figure than the aristocratic alternatives. In June 1925 he was raised to the peerage as Baron Stonehaven, of Ury in the County of Kincardine, and appointed a Knight Grand Cross of the Order of St Michael and St George. Lord Stonehaven arrived in Australia in October 1925. He quickly established good relations with Bruce, with whom he had much in common. But, like his predecessor, he found that Australian Prime Ministers no longer wanted a Governor-General acting as an Imperial overseer, or as a representative of the British government, but merely as discreet figureheads. The 1926 Imperial Conference in London recognised the de facto independence of the Dominions, and ended the role of the Governors-General as diplomats and as channels of communication between governments. From now on the Governor-General's sole role was to be a personal representative of the Crown. There were other changes during Stonehaven's term. In May 1927 he formally opened the first meeting of the Australian Parliament in the newly built Parliament House in Canberra, and the Governor-General was at last given a permanent residence, Government House, Canberra, commonly known by the previous name of the house, Yarralumla. This meant an end to travelling between government houses in Sydney and Melbourne and made the post of Governor-General less expensive. At the same time, the advent of aviation, of which Stonehaven was a keen exponent, made travelling around Australia much easier. For most of Stonehaven's term Bruce seemed firmly entrenched in office, but in September 1929 he was unexpectedly defeated on the floor of the House of Representatives, and asked Stonehaven for a dissolution. Although the Parliament was only a year old, Stonehaven agreed at once: the days when Governors-General exercised a discretion in this area had passed. Bruce's party was defeated at the October election, and Bruce also lost his own seat. The Labor leader, James Scullin, took office in January 1930. Stonehaven's relations with Scullin were correct but not friendly, since his political sympathies lay elsewhere. It was probably fortunate for him that his term expired before the crises of the Scullin government began. Stonehaven left Australia on 2 October 1930, at which point his successor had not been determined; Lord Somers, the Governor of Victoria, took over as Administrator of the Commonwealth until a permanent successor, Sir Isaac Isaacs, took office in January 1931.
Freemasonry
Stonehaven was a freemason. During his term as Governor-General, he was also Grand Master of the Grand Lodge of New South Wales.
Later life
On his return to Britain he was appointed Chairman of the Conservative Party in 1931, a post he held until 1936. In 1938 he was further honoured when he was made Viscount Stonehaven, of Ury in the County of Kincardine.
Family
Stonehaven married Lady Ethel Sydney Keith-Falconer, daughter of the 9th Earl of Kintore, in 1905. They had two sons and three daughters. Lord Stonehaven died of hypertensive cardiac disease at Ury House, Stonehaven, Scotland, in August 1941, aged 67, and was succeeded by his eldest son, Ian. The Viscountess Stonehaven succeeded her elder brother as eleventh Countess of Kintore in 1966. She died in September 1974, one day after her 100th birthday.