The Fund Executives Association Ltd (FEAL) has invited Katherine Woodthorpe to share some lessons from outside the superannuation industry on how fund executives and trustees can forge better and more constructive relationships.
Ahead of speaking at the upcoming 2018 FEAL Fund Executives Forum, to be held at the Melbourne Business School on March 1, Woodthorpe participated in a quick question-and-answer session on the topic with Investment Magazine.
Investment Magazine: Do you think the nature of what defines a good relationship between the board and executive team varies depending on the industry – or is it universal?
Katherine Woodthorpe: It should be universal. The challenge for the board is finding the right balance in its relationship with the executive team.
On the one hand, they can’t undermine the chief executive by going behind the person’s back to request info or talk to the executive team all the time. But directors must have a relationship with the whole executive team so they feel confident in going to the board with any concerns.
I have experienced the importance of this first-hand, when I was the only member of the board that the executive team felt the confidence in to talk to about issues that were going on in a company.
It’s a delicate balance but an important one to get right.
Strategies to help build connections include inviting various members of the executive team to present at board and committee meetings regularly, and having directors attend select social functions, such as celebrations for long-service anniversaries.
IM: What’s the most valuable thing about communicating with boards you learnt in your executive career?
KW: Simplicity and clarity. Not everyone on the board has the sector knowledge or technical skills to understand the issues brought before them. So clarity when presenting strategies or reporting on outcomes is critically important. Likewise, having clarity for the chief executive and executive team on what the board’s expectations are is crucial.
Again, I’ve experienced that frustration, as a chief executive, of a board asking for a strategy, being presented with a clear strategy document and saying, “No that’s not what I meant”, then not being able to articulate what they did mean.
The other key attribute for dealing with a board is patience. I know execs often get frustrated that keeping the board informed is getting in the way of them getting on with their business. But it is a vital part of being a director to understand, and that means asking for more information, if need be. Executives need to understand this and be patient with what can seem to them like a waste of time.
What’s the most valuable thing about communicating with executives you’ve learnt in your board career?
Be open and listen. Don’t pre-empt what people might say and don’t judge until you understand all the facts and nuances. Be interested in the business and the people within it.
All businesses come down to the people within them. Show them respect and interest in what they are doing. Do your homework so you know what they are talking about. Read board papers thoroughly, they’ve spend a long time preparing them, they want to know that you have given them the respect of reading them completely.
If you could give fund executives some advice for how to build a stronger connection with their board, what would it be?
Invite them to some of your work events, openings, morning teas, that sort of thing. Find out what else they are doing and are interested in. Knowing what other boards people are on can help you understand some of their drivers. For example, all my boards are broadly in the technology space − particularly healthcare and climate change/renewable energy − so people often chat to me about my work in those areas.
How much of the work towards building good connections and communication between boards and executives has to be done outside the boardroom?
Quite a lot. I am a believer in walking around the company by myself just chatting to people. I let the chief executive know I will be there but I don’t expect her or him to accompany me. Morning teas for a farewell or anniversary are the sorts of things I try to attend. It helps you stay connected and the staff members enjoy the interest you are showing in them.
Dr Katherine Woodthorpe is a professional non-executive director. She is the chair of Sirtex Medical, the National Climate Science Advisory Committee, HEARing CRC, and Fishburners. Woodthorpe is also a director of the Olivia Newtown John Cancer Research Institute, and the Australian Renewable Energy Agency (ARENA). She was formerly the chief executive of the Australian Private Equity and Venture Capital Association Ltd (AVCAL) and before that she held the role with the Technology Industries Exporters Group.
Woodthorpe will deliver a presentation on the topic ‘Board Interactions: Connecting with, and effectively supporting your board’, at the 2018 FEAL Fund Executive Forum, to be held at the Melbourne Business School on March 1. For more information, or to register for the event, please visit the FEAL website.