Henri Eliot speaks to Helen Anderson, professional director about governance from a Science and Technology perspective

Dr Helen Anderson is an independent director of DairyNZ, and NIWA, Chair of FulbrightNZ and Deputy Chair of BRANZ.   She was Chief Executive of the Ministry of Research, Science and Technology for six years and she has a PhD in seismology from the University of Cambridge.   In 2010 she was appointed a Companion of The Queen’s Service Order.

What is the role of a board from your perspective?

To set the direction, for the long term.  Recent research reported by John Hagel  showed that the average life expectancy of a S&P 500 company in 1937 was 75 years –  it’s now 15 years.  That means that to beat the average, boards must be  thinking beyond today’s issues, to what their company will look like in 5, 10, 15+ years. In a fast changing world where technology and globalisation are some of the strongest forces, boards must be able to think outside the paradigm of today and what’s already obvious for tomorrow.  That’s hard, especially when you’re successful, but anticipating change is not just “nice-to-do”, it’s about survival.

Looking forward 5 years, how do you think the board dynamic will change?

Whether we like it or not we are all going to be rated, constantly.  Just as social media are allowing opinions, not all of which are well founded, to circulate about the performance of entertainers, politicians and other public figures, the performance of directors individually and collectively will be subject to much more scrutiny. Futurist Robert Moran calls this ‘rateocracy’ and he warns that company directors and managers will have nowhere to hide for poor performance.

This trend is already evident in social media, where some companies struggle to manage reputation and brand, but it will become much more personalised.   Companies that pay attention to director performance and development will be ahead of this trend.

How will the next generation of board members differ and operate?

Most board members are senior people, many of whom have been in a CEO role at some stage. Boards will have to find ways to bring in different experiences, for instance young tech savvy leaders who understand the newer generations.  The way they operate as global citizens, for instance buying on line, getting their news online, forming their views in different communities, means they have real insight into how the companies of the future will need to operate.  Boards based only on seniority and proven ability to negotiate a hierarchy will get left in the dust.

How are we preparing the next generation board member for the future?

A board’s role is about setting direction and then applying  disciplines of monitoring performance and holding management accountable for delivery.  While much of that needs wisdom and confidence born out of experience, future board members can benefit from the opportunity to observe and challenge boards in action, in schemes such as Future Directors.

But one of the most useful things potential directors can do is to move outside the area in which they have built up their skills and try their hand at something completely different.  Many leaders have had such an experience in their late 30s or early 40s and it’s there that they learn what their transferable skills are.  If you can run a dairy farm with several staff, manage forward feed purchasing, keep to a tight budget, maintain high environmental standards and have zero accidents, then you’ve got all the stuff you need to be on the board of your local  council, school or NGO.  And people who can do that can be on the pathway to directorship.

What gives you the most sense of achievement on a board?

It’s very rewarding to be involved in an open, self-challenging and brutally honest conversation between all board members and senior managers which results in a clear, crisp direction for the organisation.  The board needs to give sufficient clarity and then to support management to make it happen.  A clear strategy can be a thing of great beauty.

Final word or comment on corporate governance in New Zealand?

Governance around the world is a role that brings with it great responsibility to make sure the organisation is around for much longer than the average 15 years.  That means directors must be people who bring wisdom and experience, but also the ability to know what they don’t know.  Challenging and being challenged by new thinking must be part of the new norm for boards of directors.

Sunday Star Times Helen Anderson Interview by Henri Eliot May 19 2013

Henri Eliot is chief executive of Board Dynamics, a consultancy company which provides strategic advice to directors and boards throughout New Zealand and Australia.  Henri.eliot@boarddynamics.co.nz