Henri Eliot: Mai Chen on corporate governance
Mai Chen is Managing Partner of Chen Palmer, a Public and Employment Law firm. She is also Adjunct Professor at the University of Auckland School of Law, and previously, the Business School.
Mai is Chair of New Zealand Asian Leaders, and was the inaugural Chair of New Zealander Global Women. She previously sat on the Securities Commission, and on the advisory board of AMP Life Limited (NZ), on the NZ Board of Trade and Enterprise’s Beachheads programme, on the Asia New Zealand Foundation board, the Royal NZ Ballet board, and on university and polytechnic councils.
What do you think distinguishes a “great” board from a “good” board?
What makes a board great is a great chair and the right mix of directors with expertise and the experience to get to the nub of an issue and not be afraid to say what needs to be said, to challenge and to be independent in their thinking. There is no “elephant” in the boardroom because directors are discussing it.
So as a director you’re not tied to the role – if you don’t agree and the position doesn’t change you would be happy to resign?
Absolutely. I have done almost everything I want to do; I have run a successful business for a long time and so I am in governance because I love the strategic focus, I love the challenge of adapting to disruption and I love the coaching and giving management new perspectives and ideas, and I love the new learning you get on boards. Above all, it keeps you sharp and performing at a very high level.
Is there a tendency for directors to just abstain and go quiet to keep the directorship because they want their portfolio fees?
That should never be the basis of serving on a board. If you are not free to walk, then your ability to be truly independent is compromised.
Why did you accept the opportunity to join the BNZ Board?
Because I respect and admire this company and its diversity values, and the industry it operates in is one of the most disrupted. It is going to be a huge challenge, but also an enormous opportunity to work in such a successful business with some great people, and a board full of people I greatly admire. I like the difference we can make to New Zealand and to market-lead.
As you’re a lawyer this is probably an obvious question: What was your approach around due diligence before accepting your first public board appointment?
For lawyers it’s all about the evidence, so throughout my life nothing has succeeded unless I’ve done the due diligence properly. It was not just doing the reading but making sure I had the right conversations with the right people, and also the right conversations with myself about where I was in my career.
I needed to be at the point where I could give this enormous opportunity my focus and time, and unless I was prepared to do that, and do it with all my heart, I wasn’t prepared to take it on. You only get one opportunity like this in your life. I am going to work very hard to make sure I am worthy of the faith that has been put in me to do the job well.
What are some of the levers that you have seen boards use effectively to drive organisational performance?
I think this is a critical one, and its beneficial having run my own business where it is my own money on the line. You have to know what makes a business tick, know what the critical successful factors are for that business and make sure the incentives are aligned to those factors, and then your job as director is to monitor them. Are the incentives properly aligned to critical success factors, and how is management performing next to those factors?
Were there any key learnings from the setup of your law practice that you retained in the back of your mind every year?
Don’t spend more than you earn. It never gets easier; the risks just change. Never rest on your laurels. Success is not permanent or static; you have to keep ahead of the wave. Adaptability is king. The market is always moving. Stay close to your clients. Listen, listen, listen and then act.
What are the emerging challenges that we are likely to face over the next 10 years?
Continual disruption; everything is getting quicker, faster all of the time and it isn’t just technological disruption. Demographic disruption is happening right now in New Zealand, especially in Auckland. 44 per cent of the population is born overseas. We have a talent pool facing employers with 56 per cent migrants and their New Zealand born children. We have almost 50 per cent of the population who are Asian, Pacifica and Maori. So what does that mean?
Literally, the complexion of your customers has just changed; the people who are buying advertising, the people who are shopping, the people who are going to rest homes, and the people who are going to schools.
Also, the people you are employing have also changed. So if you can’t get used to foreign sounding names and CV’s that look different then you’re not going to hire the best. It’s not just new migrants, it’s second and third and fourth generation migrants. Don’t presume when you get a CV for David Wong that this person is just off the boat. They might be a fifth generation New Zealander and their CV might be the best talent available, especially if they bring language and cultural skills as well as technical competence and experience. Cultural intelligence is as important as IQ and EQ.
What cultural barriers are we still facing in the boardroom?
My concern is about cultural barriers affecting the bottom line. In 21st century New Zealand, you can’t just talk about gender diversity; you’ve got to talk about ethnic diversity. Diversity is not a nice to have. It’s about greater productivity, innovation and more investment. Diversity should mean getting more bang from a director i.e. they’ve got great experience and expertise, but they also have cultural intelligence and speak languages apart from English.
Do we face any other roadblocks in business?
The stats show there is a disproportionately high number of Asians in the IT and Health industries, but the stats also show that Asians are disproportionately over qualified for whatever role they are holding. That’s a cost to the New Zealand economy, because that means we are not maximising the full potential of our people.
For example, I recently had a very prominent Headhunter say I don’t know what to do, I put up two fantastic well-qualified Asian candidates and I couldn’t even get the board to look at them.
This example is the key reason why I set up New Zealand Asian leaders (NZAL). When I arrived in Auckland, I became a magnet for Asian people I had never met – getting in touch to say “I can’t get a job interview”, or “I’m stuck in middle management. People think that I’m hard-working and I’m technically competent but they don’t think I’m leadership material and I’m sure it’s because I’m Chinese or Indian” or “I have a great CV but I can’t get on any boards”. Part of it was they weren’t well connected, but another reason was they were not visible to those recruiting board members or senior managers.
So what I’ve done with NZAL is to bring New Zealand’s top Asian leaders together and profile them. NZAL now has about 150 top Asian NZ leaders. The result of visibility has been that most leaders on our site are getting contacted for management and governance roles.
Those saying they couldn’t find any qualified Asian candidates for boards and senior management now have no excuse! The upside is the critical contribution Asian NZers can make to New Zealand boards and companies and organisations with their cultural intelligence and language skills as well as their expertise and experience in business.