Excellent board members can contribute to company success, but it won't succeed without a comprehensive growth strategy, says Susan Peterson, independent director for Wynyard Group, Vista Entertainment Solutions and several other boards. She talks to Henri Eliot about the future of boards and why global success makes her proud.
How does a board lift company performance?
The board's responsibility is to direct the company to enhance its value to shareholders in accordance with good corporate governance principles. There is a strong link between good governance and great long term performance. Each of the company's executives will have a critical functional role and come together as an executive team to provide organisational executive leadership.
Ideally, each of the executives will be functionally excellent, but whether a company truly succeeds will ultimately depend on how all of the specialist functional expertise integrates into the delivery of a cohesive growth strategy. The Board is accountable for all aspects of this cohesive growth strategy.
In my view, effective board composition needs to be deliberately designed if a company is to be successful. The strategy to deliver effective Board composition is as essential as the process to develop and implement the overall company strategy. The skills, capabilities and relationships brought to the table by each director will ideally be both complementary and important to the effective delivery of the strategic plan.
An IPO scenario grants the privilege of having a blank canvas in order to design the ideal Board composition to maximise success for the company. In creating the Wynyard Group board, thought was given to five key areas: proven governance experience, relevant industry knowledge and relationships, deep functional expertise in high growth companies, diversity and overall board dynamics. It then became an exercise of identifying individuals who could contribute these requirements and hoping that they would be available.
Such a process is not so easy for established boards. Established companies may be constrained by only being able to adjust their Board composition to meet changing market demands as director rotation policies permit. However, it is still essential that established companies have an overall Board composition strategy that is objectively and regularly reviewed against the company strategy.
How will the board dynamic change in the next five years?
It is almost certain that the market dynamics will change moving forward which will require boards to correspondingly change. It is fair to assume that technology innovation will continue to increase the pace of globalisation. This provides exciting opportunities for New Zealand companies to more readily access much bigger markets.
However, boards will need to regularly review their composition to ensure that they have the international expertise and understanding of the risks associated with globalisation and increased competition if they are to succeed.
What gives you the most sense of achievement on a board?
I am a very proud New Zealander and passionate about seeing New Zealand succeed on the global stage. My greatest sense of achievement comes when all the hard work translates into success for our customers, shareholders and staff. New Zealand has all the skills and capability required to drive innovation and growth in many sectors. However, as New Zealanders we can some times doubt our own ability to achieve. Nothing builds confidence more effectively than successfully delivering performance.
I have worked with a number of multinational companies in the past, but particularly enjoy helping smaller New Zealand companies with high growth potential succeed in their global expansion strategy. Wynyard Group is a fantastic team of talented professionals and it is personally satisfying to be part of a team supplying capability to protect companies and countries from threat, crime and corruption.
I am proud of Wynyard's relentless commitment to customer service and to growing shareholder value. I have recently started working with the team at Vista Entertainment which is another New Zealand company already operating successfully in overseas markets that has exciting potential.
Henri Eliot is the CEO of Board Dynamics.
Idealog has been covering the most interesting people, businesses and issues from the fields of innovation, design, technology and urban development for over 12 years. And we're asking for your support so we can keep telling those stories, inspire more entrepreneurs to start their own businesses and keep pushing New Zealand forward. Give over $5 a month and you will not only be supporting New Zealand innovation, but you’ll also receive a print subscription and a copy of the new book by David Downs and Dr. Michelle Dickinson, No. 8 Recharged (while stocks last).
Idealog is part of ICG. We work with clients like Woolworths New Zealand, All Good, Huffer, Liquorland, Resene, Citta Design, TVNZ, Spark and FCB on their event activations, in-store, in-office or out-of-home signage, content creation and vehicle wraps.