Stepping up to Directorships
By Adrienne Young Cooper
This is an intensely personal view about board directorships and about pathways towards them. I’m speaking from my thirty years of experience in governance in professional associations, community organisations, trusts, businesses and statutory bodies, the last ten years of which have been largely in the role of independent director or trustee.
I currently sit on a number of Boards, namely:
- my own consulting company
- Solid Energy, a diversified energy company, with a wide range of coal based and renewable energy businesses. We recently posted our highest annual revenue breaking the $1billion mark, with more than $100 million profit.
- Auckland Regional Transport Authority (ARTA), responsible for public transport services in Auckland and regional transport programming and funding.
- Maritime New Zealand, a Crown agency delivering a huge range of services for the maritime sector including governance of the New Zealand Rescue Co-ordination Centre
- the Auckland City Property Enterprise Board
- Manukau Buildings Consultants Limited and
- the Cornwall Park Trust.
Diverse and Demanding
To give you a flavour for the diversity of my board work over the past months I have co-hosted a cocktail party at the Beehive, approved $75 million for mighty new trucks and excavators, visited and been fully briefed on the operation of a port, reviewed proposals for an underground rail system in Auckland, and approved the purchase of many properties for various civic and public works in the Auckland region!
I’ve also spent about 10 days at board meetings and reviewing board papers – at least two days per month for each board. And every day there are emails and news bulletins to respond to, and sometimes special committees and events to attend, and keep up to date with. It is very demanding, scary at times, stretches the mind, is often a lot of fun, and you meet people and go places you never imagined.
So how did this all happen to me? The answer is very slowly, over years. It did not happen on any timetable set by me and it was did not unfold at all like a career!
I was 37 years old, 15 years into my local government career, with 65 staff, a $6m budget, 60 hour weeks, and hugely ambitious. However, I decided I should have one last go at starting a family and so I needed a less stressful career.
I left local government for the life of a planning consultant and eventually joined up in 1995 with David Hill to establish our company Hill Young Cooper. On day one we discussed our long term aspirations. Besides conquering the consultancy market in New Zealand (well we were young and ambitious!) I decided “I would like a few directorships”. I was about 40, with significant management experience but no real business experience, no CEO experience, and not an accountant or a lawyer. With the benefit of hindsight I did not tick many of the “skills and competencies” and other governance boxes sought by recruitment committees on boards.
In my naivety I set out on my path to directorships rather like the rest of my career to date: I thought it was a matter of training and applications. I trained on the Institute of Directors (IOD) 5 day company director course and others, joined the IOD and regularly attended the breakfast meetings, and put in my CV into Crown Companies Monitoring and Advisory Unit (CCMAU) and waited for the phone to go…
After a year nothing had happened, so I reviewed my strategy. I did some more training, refreshed my CV and kept on attending IOD breakfasts. Two more years went by and apart from a rather botched interview with CCMAU those “just a few directorships” were not happening. I attended an IoD course about once a year – on governance, strategy, financial essentials for directors and the like. But essentially I gave up on “trying to become a director,” realising it was not like a professional career. There was nothing and no-one to apply to except on a very random basis; and in any case the process by which people get appointed to boards was even more opaque to me then than it is today.
Then out of the blue, my first governance role emerged. It was a request to sit on the establishment board of the Waitakere water business with several other people including Bryan Mogridge, Jock Irvine and Margaret Wilson. I came across concepts like cost of capital for the first time. It was bit of an eye opener for a planner and there were some days my head spun with the new concepts and the decision making role in an intensely political environment.
But my appetite for governance roles did not diminish.
After a selection process I was appointed to the board of ARTNL, a local government company that was established to own the rail tracks, Britomart, rail stations and ferry wharves. I loved my role on this first trading company. We had real assets, real income and real expenses. I took special governance responsibility for the commissioning of the Britomart Transport Centre. This was the first time I experienced no daylight between governance roles and management roles. Time and funding were tight and the issues were real.
On the board, we had traditional business men and experienced directors. I carefully observed how they behaved. I spent time with the chairman, Ross Keenan, discussing governance and how I could improve my contribution. It was a great learning experience. Some advice: openly seek guidance from more experienced directors when you are new. Chairmen in particular are almost always wise and experienced in the business of the organisation and in the business of governance.
Welcome Call, Close Call
After at least five years languishing somewhere near the bottom of the CCMAU candidate list, a call came asking if I would consider a directorship on the board of Solid Energy a state owned enterprise. A coal miner – not quite the glamorous board directorship I had imagined for myself on NZ Post, or one of those electricity companies!
I was asked to attend an interview with the chairman and a CCMAU representative in a couple of days time? Next came a mad flurry to update myself on coal mining, the Crown Minerals Act and Solid Energy so I could present my credentials at the interview in the best light. A couple of hours before the meeting I checked the CCMAU website on the interview process – to find to my horror it was MY interview to conduct due diligence before accepting the directorship. In short order I had to turn my preparation into a due diligence interview for them! With apparent confidence I kept them answering my questions for two hours. I have kept my due diligence questions to this day.
Some advice: ensure you know what the director appointment process is, who will be present at the interview – and prepare, prepare, prepare. Always ensure you have adequate time and resources to conduct an appropriate due diligence. There are guidelines for due diligence. No matter how much you want a directorship you must be prepared to walk away.
Reflect and Learn
Six years later, I am now the most experienced director on the board of Solid Energy. It has been an exhilarating experience to govern a company that I have seen grow from a $6m profit in my first year to over $100m now.
Every Solid Energy board meeting is a case study in governance; and that is how I treat all my board meetings. I take notes of board dynamics, I observe behaviour, I reflect on what is making a difference. I reflect on my own contribution and whether it was helpful or hindered board processes and company progress.
After my Solid Energy appointment, I seemed to be “flavour of the month” and in 18 months was asked to join or apply for 4 more boards, 3 of which had competitive processes. I have also worked with CCMAU and interviewed dozens of prospective candidates for State Owned Enterprises and am often asked “how do you get your first appointment”. I will return to this theme with some advice later.
Do You Really Want This?
One question you must first ask yourself is: “Do I really want a directorship?” Being an independent director on a board is not glamorous. It is serious business: you risk your reputation, time in prison, your home and assets.
I have good and respected colleagues who are facing prosecutions for decisions they took as directors which could potentially cost them all of their assets; and which have already had huge reputational impacts on their careers. But it is a huge privilege to be at the peak of an organisation, holding it in the cup of your hands, for the owners, stakeholders and shareholders.
Directorship is not just another job – or a career step. You can’t make it happen and directorships are NOT for everyone.
Advice for Aspiring Directors
I now return to my advice on “how to get that first appointment.”
- Wide areas of business function are relevant to boards, ranging across legal, finance, human resources, marketing, resource management, science, innovation, intellectual property, general business management. Developing this is not a 2-3 year effort – it may be a 20 year effort. Any profession at depth should develop the ability to analyse information from many sources within a specific context, and make decisions. These are skills always needed at the board table.
- Seek and undertake positions of leadership, ones where you need to make the big decisions as the CEO, in your own business or a major division. Become trusted in running a business or organisation. After all, as a director you are trusted to exercise all care and judgment in governing a business or entity for others. Demonstrate you understand the risks and have had suffered from the repercussions of things going wrong.
- Seek education and training in the specific skills, ethics and competencies of governance – particularly where you may lack them in your business or professional life. Options include IOD, some of the universities, CCMAU, and the not for profit sector all offer opportunities.
- Cultivate and develop an inquiring mind over a wide range of subjects outside your own profession. I read a couple of books a week, have subscribed to the Economist for 10 years, The New Yorker for 5 and occasionally read New Scientist, Nature and international newspapers.
- Join IOD and attend their events. There is also an organisation called Springboard for younger aspiring directors.
- Seek governance roles in the not for profit sector – particularly if governance disciplines are practiced – the arts sector where funded by Creative NZ for example provides governance training.
- Talk to experienced directors about “how they got their first appointment”. Several years ago I identified 10 women directors I admired who, over the years, I have had the chance to meet, discuss their own pathway to directorships and take on any good advice they might have.
- Prepare a governance CV. This is not like a career CV. Women’s Affairs provide good guidance on this. Demonstrate you are savvy about the risks and what you can offer to specific sectors or organisations.
- Let the world know you are good, ready and available through CCMAU, Women’s Affairs, ATA, Chamber of Commerce, IOD, Finddirectors, search consultants. Remember any special contacts you have who are Chairs of boards. Network in the business area you are interested in.
And my final piece of advice is stick at it – but get on with the rest of your life. As I have already said, you cannot make directorships happen.
Advice for Inside the Boardroom
I now turn to some advice once you have that first appointment as a director. Those early years can see a very bushy tailed director keen to make their mark and make a difference.
- You are not the sergeant major – support and empower the CEO and management to succeed – don’t nag, criticise, rehearse their errors or point out their flawed thinking
- You are not the CEO – you are not there every working day- you must stay above the day to day
- You are not the in-house counsel – or planner or accountant or property expert – you must have a wide view of the business
- Directors do not direct – see above
- Dress beautifully – with colour – the world is drab enough with all those dark suits. Yes it is serious – but boards should be happy, full of people who have a common purpose and desire to support and grow the enterprise or entity. They should enjoy each other’s company, have a few laughs, respect each other, build a high performing team that inspires the CEO and staff.
- Some of finest New Zealanders serve as independent directors on boards – you meet some wonderful and wonderfully interesting people and you will really get to know them
- The staff will be paid a lot more than you – if the organisation is doing well!
- When times are tough expect no daylight between you and management – expect all your skills and talents to be called to the fore. Leadership, a steady hand, wisdom and sleepless nights may ensue.
- Support the chair and board processes. Playing board politics is a messy and distracting business.
- Work very hard – prepare well in advance and take the overview – not what is necessarily in each board paper.
- You always need to be learning – reading, talking, listening
And finally – talking because you have an opinion does not necessarily add value to board decision making processes – ask yourself: Can you improve on the silence?
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