After 5 years of being a professional Director, I believe being a Director is a privilege, not an entitlement.
The transition from a successful Executive career in professional services, health, transport and infrastructure across public and private sectors was a great foundation. I have 5 Directorships:
· RACV - a large unlisted mutual with 2.1 M members, representing 6 out of 10 Victorians,
· Waste & Resource Recovery group – a statutory authority to reduce waste to landfill,
· Greening Australia - large National environmental “for purpose” group,
· Maldon Hospital - contributing to the health of my local community and,
· The Innovation Cooperative - a movement to encourage the use of Cooperatives, sometimes using block chain technology to create ecosystems for the purpose of the cooperative
This eclectic mix has been embraced so I can as a Director, use my commercial and strategic skills, encourage innovation, make behavioural change, and achieve long term sustainable outcomes.
As a Director, I need to network in a different arena – with both respected head hunters and others forming an insular network maintaining the status quo. I need to deal with ambiguity and slowly create change, whilst working collaboratively with fellow Directors. It is a balance to be curious, innovative, challenging and collaborative with other Directors and stakeholders.
My view of Directorships is to use my skills and experience to leave a positive legacy for future generations. Accordingly, we need to recruit for diversity, which has been proven to achieve better outcomes. What I have noticed is that some Directors are there for the red wine, others are a traditional steady pair of hands, whilst some put simply, do not understand their role.
As I write this, we have the Royal Commission into banks and insurers that have exposed some appalling behaviour in our Big 4 banks and AMP. Shareholders are disgusted by the lies, lack of trust, and greed evidenced by poor corporate culture. Is the sole driver of this poor behaviour ultimately profit for-shareholder return? In part, corporate Australia is to blame in chasing profits enabling superannuation fund investors to receive extraordinary returns to fund the retirement of their members. The short and long term performance indicators set by Boards may be driving these unacceptable outcomes. These indicators must be critically reviewed.
This is a wake-up call for corporate Australia.
The Board must lead the behavioural change in exercising their responsibility to shareholders or members, who own the company, mutual, or association. Directors must consider profitability but not at the cost of owning a toxic culture where employees cover up poor processes and potentially illegal activities to satisfy their bosses and meet their bonus targets. Directors must adopt a holistic world view that incorporates quantitative, qualitative and behavioural paradigms in which their company operates. Directors must pay more attention to the company’s environmental footprint, customer needs and social responsibilities to stakeholders affected by the actions of the company they direct. There is a need to think globally for long term sustainability, not as an individual State or Nation.
As Directors we must be brave and ask respectful questions of Management, to drill underneath the content. We must be aware of “group think”, controlling CEOs, and challenge the status quo if our moral compass is being compromised.
The millennials will inherit our wealth in a few years and they are not impressed with the way the corporate world operates. So, it is up to us in directorship roles to generate the change momentum now.