Henri Eliot: Cathy Quinn – Perspectives on corporate governance
9:30 AM Monday Jun 23, 2014
Cathy Quinn, chair of law firm Minter Ellison Rudd Watts.
Cathy Quinn is the Chair of Minter Ellison Rudd Watts, Australia and New Zealand’s largest law firm. She talks to Henri Eliot about corporate governance.
What is the role of a board from your perspective?
The Board’s role is more than monitoring management. It has a key role in driving an organisation’s strategy and performance. It appoints a CEO and management team to develop the strategy, agree that with the Board, and then implement it. Ultimately though the buck stops with the Board – it cannot hide behind management’s failure to deliver – it is the Board’s job to see that management successfully implement the organisation’s strategy and goals to create value for shareholders.
Looking forward 5 years, do you think the Board dynamic will change?
Nothing in life or business stays static. All businesses and organisations need to constantly change and evolve to stay relevant. I do not see Board’s as any different – so yes I think the Board dynamic will change. Exactly how is harder to predict. The increased expectations on directors and concerns over director personal liability does make for very engaged Board’s today – I don’t see that changing. That creates what should be a challenging and stimulating environment for Board’s and CEO’s. I expect we will see more women on Board’s, as well as more diversity generally including of experience. As China becomes more critical to New Zealand’s success, I expect we will see some Board’s include in their composition people with experience of working successfully with Chinese enterprises.
How should we best prepare the next generation Board member for the future?
The best directors in my view are those that have been through the ups and downs of business – they have experience from being involved in business – in both success and failure. They have run businesses or been involved in managing businesses at a senior level. So for me – the next generation will gain most from doing their current roles now to the best of their ability. In the course of that having the opportunity to present to Board’s and observe a Board in operation will also help and prepare them for the next phase of their career. But the key is doing their current jobs well.
Should shareholders be more pro-active in New Zealand?
Yes – so long as they are constructive.
No Board or organisation is perfect. Every Board and organisation can improve. Most of us can be encouraged to do better – so can Board’s.
Shareholders have a right to require Board’s to perform. Shareholders have a right to test that the Board is on top of its game.
However challenge for challenge sake or challenge not based on reality or fact is destructive on multiple levels. Shareholders need to trust the Boards they have appointed. Not all the information available to directors is also available to shareholders, and therefore shareholders need to be careful when intervening with projects or plans that the Board has carefully considered and analysed.
Approaching issues in a constructive and respectful tone will usually inspire those on the receiving end to engage better in the process of being challenged.
How are we tracking around improving “diversity” in the Boardroom (age, ethnicity, gender and skill set)
I think we are on the right path – yes there is still more work to do. People need to earn their right though to sit around the Board room table. There is no place for tokenism. Shareholders deserve the best people (which will involve a range of skills and attributes) around the Boardroom table.
New Zealand’s society has changed markedly over recent decades and will continue to do so. Over time, and with encouragement, that changing face of New Zealand should result in more diversity in Boardroom’s – because that is the smart thing for Board’s to do
What should worry directors this year?
The same things that should always worry directors. Does the organisation they govern have the best people and strategies to make the most of the opportunities available to their business?
Are there any blindspots? Is the organisation on top of its key business risks and have strategies in place to address them?
I expect Board’s will be thinking about if the people of New Zealand vote for a change of government – how is that likely to impact on their business? If that creates challenges – how will these be addressed?
Turning back the clock, would you do anything different in your career?
Given that you cannot change the past – I’ve never spent much time chastising myself for past decisions or mistakes. They shape who we are today if we are open to learning from them. I have used my experiences (good and bad) to grow our firm’s business and to inform the way I seek to respond to new challenges.
To be honest therefore there is nothing I would change. I’ve worked with, and continue to work with some brilliant people across a range of industries and with a bunch of people I admire and respect enormously.
New Zealand is in a great place at this moment in time. As business leaders we should encourage our wider community – including politicians not to waste the opportunity we have. We have the chance to participate in shaping a better future for our children, to create a wealthier and fairer society. That is exciting. It does mean business leaders do need to stand up and speak out – even if it is risks upsetting the Government of the day or the future.
Henri Eliot is CEO of Board Dynamics