In this conversation with Phil Veal -- who was recently appointed chief executive of Rangatira, a middle-market investment company following over 20 years working in London, Singapore and New York -- we explore issues surrounding board governance.
Phil is chair of Kea, New Zealand’s global network and the "borderless nation" of New Zealanders. He is also chair of DialedIn, a New York-based provider of cloud sales software.
What is the role of a board from your perspective?
To me, the role of a board is about setting the compass for the executive team to steer by. It’s about seeing beyond the day to day operational challenges, and understanding the potential of an enterprise or organization, building the team/capability that can deliver on it, and then keeping them honest.
Looking forward five years, do you think the board dynamic will change?
It’s changed for the better in the last five years, and I’m optimistic that it will continue to improve in the next five. Let’s look at one example: having offshore-based Kiwis on boards: Geraldine McBride (SKY TV), Linda Jenkinson (Air New Zealand) and Claudia Batten (Serko) are just three terrific (and recent) examples.
As a small country at the end of the world’s longest supply chain, we have to make the most of all of our resources. And that extends to the “borderless nation” of 6 million Kiwis around the world that Kea is building.
Why is this important?Because our greatest potential is in strengthening our international connections, engaging in big global markets, and if we don’t leverage that borderless nation experience on our boards then we’re missing a huge opportunity.
How should we best prepare the next generation board member for the future?
Give them experience early. Throw them in at the deep end and support the hell out of them. The bright young things are on the charge – in the US for example, we’ve seen Danny Schwartz take the reins at billion-dollar Burger King at the age of 33. So age shouldn’t be an excuse anymore.
We should be encouraging and mentoring more of our brighter younger things into governance roles. Particularly when we have such wonderfully gifted directors to learn from, like Rob Campbell, David Pilkington and Joan Withers, to name just a few.
Has social media changed the way boards look at risk?
If it hasn’t it should have! Any enterprise today is far more connected, and more immediately, to their customers. And when they can influence brand value, revenues, reputation with one hashtag response or a Facebook takedown, those customers are the most important stakeholders. So that means boards need to be much more stakeholder aware, in addition to being investor driven.
How are we tracking around improving "diversity" in the boardroom?
New Zealand is no different from the rest of the world in that diversity is still a huge challenge. There’s perhaps two ways to think of diversity when we talk about boards.
The first is that boards should be representative, and by that I mean a board should represent the stakeholders, the customers of the business. Customers, not investors, drive returns. With this perspective, the best board for most organizations isn’t a group of old white men!
The second point is that diverse points of view drive better decision making, and reduce the risk of “groupthink”. And if you’re still skeptical, the United States data shows that more diverse boards deliver superior returns for investors and stakeholders, and I’d expect we would see similar results in New Zealand.
Turning back the clock, would you do anything different in your career?
I tell my kids I’m not old enough (44) to have a career yet, but there have definitely been plenty of forks in the road where I could have taken a different path. However I don’t have regrets, firstly because there’s no replays or do-overs in life, and secondly because I’ve been lucky enough to have plenty of fun and some success along the way.
My philosophy, which I think is particularly valuable at a board level, is to always create options, so if you can look back and say “We should have done that instead of this”, you’ve at least enjoyed the luxury of choice if not the best decision!
I’d like to see us continue to evolve, from pure investor-driven boards to more of what I’d call stakeholder-driven boards, which will drive better returns to everyone.
I’d also like to see us make much better use of our borderless nation, because that’s our best asset for strengthening international connections, building great multinational businesses from New Zealand, and improving our economic performance.
Henri Eliot is CEO of Board Dynamics, a consultancy which provides strategic advice to directors and boards throughout New Zealand and Australia.