The other day my wife and I happened to be driving through Sheffield in Canterbury en route to Arthur’s Pass. We took the opportunity to visit the establishment that is the Sheffield Pie shop, world famous (or at least famous in some of the world) for its multitudinous selection of pies. While my wife enjoys a good steak pie, I’ve never been a fan and settled on a simple sausage roll.
Sausage rolls were the topic of conversation recently as I was invited to give an address to the Institute of Directors AGM in Christchurch. For those who haven’t come across it before, the Institute of Directors is the professional body for those who practice the art (or perhaps science) of Governance – all those who sit on boards as directors and trustees for public companies, State-Owned Enterprises, non-profits, charitable trusts and the like.
The reason sausage rolls came up in my presentation is that, only a few decades ago, the main focus of professional directors was the savouries that they enjoyed during morning and afternoon teas in board meetings, that and the great board dinners. Governance was a fairly slow-paced role that didn’t tax those who filled those roles. Governors were, at that time, very much variations on a theme – elderly gents who, after long careers as lawyers or accountants, were quite keen on a leisurely sinecure that gave them some intellectual stimulation, introduced them to new golfing partners, and didn’t require too much in the way of effort.
My how times have changed – governance roles are no longer the casual sinecure they once were. The workload for governors has increased markedly as the need to consider all stakeholders, and not just shareholder returns has become more important. Add to that an increasingly complex regulatory framework and governors have their work cut out for them. The money isn’t amazing, at least not in comparison to executive positions that many professional board members have histories with. Finally, and perhaps most worryingly, if we screw up our role as board members, we can get sent to jail. The reality of governance isn’t quite what the myths would suggest.
At the risk of being a little bit self-serving, I’d suggest that, while there are many reasons that governors put their hands up to take ont he role, the primary one is that of service. Being appointed to a board really is a privilege. As governors we see a very open inside-view of the organization and have a deep understanding of its reality. We’re entrusted with protecting the history of the organization, while taking that legacy and writing its next chapter. As governors we fulfil the role of Kaitiaki – we are the temporary guardians for the taonga that is the organization for which we serve, and we need to respect that role deeply.
Which is where the comments about governance being fundamentally different from before come in. Let’s face it, in the old days, a decade or two ago, the pace of organizational, societal and economic change was sufficiently slow that governors could be somewhat ponderous in their decision making powers. Organizations, and by extension their boards, could continue along their existing path and only the odd bit of guidance, compliance and oversight was needed.
Fast forward to today and virtually every organization stands on some kind of a burning platform – maybe you’re a media company and you have Facebook and Google breathing down your neck. Maybe you’re a financial institution and the mass decentralization that blockchain and cryptocurrencies brings means that the ground is moving beneath your feet. Maybe you’re a consumer brand having to try and work out what your future is in a world where anybody with an internet connection can dropship stuff from AliExpress and where Amazon seems able to automate what you do in an instant. Virtually every organization is facing these existential threats and the governors of those organizations need to be up to the task at hand.
Which means that, as governors, we need to get more involved than has historically been the case. Absolutely we need to continue to respect the divide between management and governance and need to let management get on with the job of running the business. But today, more than ever before, we have to have a deep understanding of the operating context of the organization, a curious eye to what threats and opportunities lie for that organization just around the corner, and an ability to embrace new approaches, tools, business opportunities that will drive the future of our organizations.
Now, don’t get me wrong, I’m not saying for a moment that just because a governor is of a certain age, a certain gender and a certain skin colour, that they’re no longer suitable to fulfil the role. Being fit to serve as a governor is about a state of mind, a willingness to adopt and learn, an intellectual curiosity matched with both relentless positivity and a huge amount of energy. Diversity of thought is the primary aim here.
Whoever sits around a board table needs to buckle up for an increasingly turbulent ride. As governors we need to constantly ask ourselves if we have the constitution for the task at hand.
Ben Kepes is a Canterbury-based entrepreneur and professional board member. To be honest he’s not a massive fan of savouries.