Corporate Governance from a Leadership Perspective
Jo Brosnahan, founding Chair of Leadership New Zealand talks to Henri Eliot about her perspectives on corporate governance in New Zealand.
Jo is also the Chair of Northpower Fibre and she was formerly Chair of Landcare Research, a director of Housing New Zealand and is former CEO of the Auckland and Northland Regional Councils.
What is the role of a board from your perspective?
Boards need to add value. They have a leadership role; providing clarity of purpose and strategy, and most importantly, employing and supporting a CEO who can deliver on that strategy. Boards must make sure that there is the right leadership culture for successful delivery of the required outcomes, and should then monitor the implementation. There has been a particular emphasis in recent years on the accountability and compliance aspects of boards, particularly after governance disasters such as Enron, those associated with the Global Financial Crisis and tragedies such as Pike River. While it is important to address these aspects, boards must not lose sight of their role as leaders in developing the business.
Looking forward 5 years, how do you think the board dynamic will change?
Our biggest opportunity is around diversity. Those of us of similar age and backgrounds think similarly; we reinforce each other in our views. We see through the same lenses and do not always see every aspect of an issue, which can be a dangerous situation. Traditionally, governance has been the domain of those who have had senior executive and professional roles, and lawyers and accountants have dominated. It has also been largely a male environment. And yet international research indicates that boards with members from a range of backgrounds and gender are more likely to create successful business outcomes. Sadly, while there is increased awareness of the importance of diversity and while we have a history of being progressive in this area, New Zealand is not faring particularly well in the diversity stakes. Despite initiatives underway to change this, the makeup of boards is changing only at a very slow pace. We are missing an opportunity here.
How will the next generation of board members differ and operate?
Gen X’s and Gen Y’s bring a very different way of thinking to the table and with it, the opportunity for innovation, both in collective thinking at the board table, and also in the way that we can work successfully in a ‘governance’ environment. A few years ago, I was involved with some young entrepreneurs in Australia, all under 30, who talked about having boards of mentors; not formal boards, but a group of people with broad experience who could allow them ready access to experience and wisdom. The normal board trappings and processes were missing, but the speed with which they were developing immensely successful businesses was stunning.
How are we preparing the next generation board member for the future?
There has been a growing awareness of the importance of bringing through young directors and developing them in governance roles. Even more importantly, whilst they are learning as they take up these roles, at the same time they have a huge amount to contribute in terms of their fresh approach to business. Each board should be encouraged to have at least one younger member (under 40). A number of organisations are actively assisting younger leaders to engage in governance roles. The Institute of Directors has a number of programmes for younger leaders. Springboard is a LinkedIn based organisation which has developed a large network of potential directors, largely under 45, and is providing networking, seminars and mentoring opportunities. Leadership New Zealand, through its SkillsBank Programme has also placed highly capable younger leaders from our own programme into not for profit governance roles. However, older directors still predominate on most corporate boards and there is an obvious reluctance to stand aside and create positions for younger and more diverse members. Perhaps that is our greatest challenge; to provide opportunities for all. It is one that Chairs and boards must confront.
What gives you the most sense of achievement on a board?
Like anything in life, the greatest achievement comes from succeeding while working with others; from knowing that you and your fellow board members have contributed to growing a successful organization, leaving it in a better state than when you became involved. Personally, I also enjoy working as a Chair with boards and with the CEO’s, and most particularly with younger leaders, with the ongoing learning and development which that creates for all of us.
Final word or comment on corporate governance in New Zealand?
The biggest opportunity for New Zealand boards is to bring new thinking to the table, to reflect the fresh, innovative ideas for which New Zealand is famous; ideas which are stimulated by diversity and developed through collaborative conversation. We have a real opportunity to benefit by using the breadth of talent that we have available in our wonderfully diverse nation.
Henri Eliot is chief executive of Board Dynamics, a consultancy company which provides strategic advice to directors and boards throughout New Zealand and Australia.