TMTYB S01E10 (Board Effectiveness) This is Take Me To Your Board from the Tasmanian Council of Social Service. This show's about governance, and it's not just for aspiring or current board members. It's for anyone who wants to hear from some of the country's top leaders about how a good board really should work. Each episode's based on one of the 10 principles of not-for-profit governance as laid out by the Australian Institute of Company Directors, hosted by Bridget Delaney and Cameron Allen. Bridget Delaney: Today, I'd like to discuss principle number four, board effectiveness. The AICD breakdown board effectiveness by way of the internal process of the board. They stipulate that for a board to be effective, it must take a thoughtful, disciplined and professional approach to its work. This includes forward planning, efficient operation of meetings and performance assessments. This principal brings to life what a board does functionally, and by extension, what role each board member plays in that responsibility. This principle is less conceptual than many others. It feels almost like a checklist for your board and how it should run. Cameron Allen: It's good to have that clarity and delineation around what are key roles in upholding good governance of an organisation. Bridget Delaney: Indeed it is. But I must admit this made the task of finding an example of where things go awry somewhat difficult. Openly saying where your process falls down, for example, where a chair is ineffective and performance assessments have been neglected, it's hard to recognise and is often the path that leads to multiple other issues. I guess like all principles, it weaves in and out of all of our other examples. However, as always, I have found something worth exploring. This company we will look at today is Theranos. Apart from being a very fun word to say, Theranos is a Silicon Valley start-up in the medical technology industry that claimed to have created blood tests that required very little blood, but performed rapid analysis. It was founded in 2003 by 19-year-old Elizabeth Holmes. It gained investments exceeding $700 million from private investors. And by 2014, she presided over a company worth $10 billion, with Holmes quickly ascending the charts to become one of the richest self-made women in the world. In 2012, the partnership started to hustle in. Investments from companies like Pfizer, Safeway and Cleveland Clinic followed, all wanting to get in on the technology that would reduce their costs and resourcing and increase their productivity. By 2015, Theranos received the Bioscience Company of the Year by the Arizona Bioindustry Association. Cameron Allen: Sounds pretty much like the Silicon Valley we all understand and have come to know. Bridget Delaney:
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That's it. Start-up with a brave new idea, make millions, or in this case, billions. That is, until it all came crashing down. For Theranos, this moment came when an investigative journalist, along with a medical research professor and other interested parties, started to question the validity of the technology. As more and more questions were raised, founder Elizabeth Holmes stalled releasing evidence. As a result, investors began jumping ship. In 2014, Holmes was charged with fraud by the U Securities and Exchange Commission. Now, the company is under civil and criminal investigation by the Department of Justice and federal health regulators. Holmes' trial began in August of this year. So, who were supporting this venture? How did it go so wrong? And if there was no evidence it worked, how did it get started in the first place? To start, let's look at what oversight there was. The Theranos board was made up of 12 members. Five are former government officials, two are former navy and army officials, an ex-CEO of Wells Fargo, an American billionaire and businessmen, a former epidemiologist, and two current executives, one of which was Elizabeth Holmes. On paper, it seems like a well-skilled group of people to be leading the organisation, but let's look a little closer. First, the average age of the board members was 80 years. Second, they were all retired and not one had formal legal or financial experience. Third, no one had experience of medical or technological companies. What this board did have in spades, however, was influential ties and connections within government. Cameron Allen: But even without those skills, wouldn't someone notice some telltale signs or some red flags? Bridget Delaney: Well, the product remained hidden until it was released for a decade. While they secured significant funding through their networks, it appeared no one questioned the technology that was being funded. It can only be assumed the board never pushed for the appropriate proof. And if we are to believe they fell into the trap of blinding believing what they were being told, is this through a lack of understanding of the industry, or is there a strong sense of group think? Like always, there are so many things that feed into this issue and it is hard to know what goes on behind closed doors. However, where board matters are concerned, this should definitely be clear in the minutes and the notetaking. Whatever transpired, I think we can all agree, the Theranos board was less than effective. Now, I'm really excited to hear from our next guest on how this could have been done so much better. Cameron Allen: Today's special guest is Naomi Edwards. Naomi is a highly experienced company director, both in the listed and not-for-profit space. She currently has seven board roles, including five on the mainland, but Tasmanians will know her as chair of Spirit Super. She also represents Tasmania on the national board of the AICD. Welcome, Naomi, to the podcast. Naomi Edwards: Hi, Cameron. Hi, Bridget. Cameron Allen:
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Thanks for coming on. Really appreciate it. First, I'd love to get your hot take with regard to the actions of the Theranos board. Now, there's a lot to unpack here, but what do you think the board could have done differently to mitigate some of the risks and where did it all go so terribly wrong? Naomi Edwards: It's a terrible case study, isn't it? I mean, for a start, they had a terrible board composition, and I think one of the AICD principles for not-for-profit boards or for any board is structure the board to add value, and that board was not structured to add value, and I think it's because they had no diversity, but they also lacked some of the key skills that you need on a board. So, no matter what kind of board you are, I think these days you need somebody with an accounting background or a finance background. I think it's really important. Even if it's just your neighbour's kid who's studying accounting at school or an accountant up the road who's retired, try and get that really great finance skill in the board. Secondly, the problem was that they didn't have anybody who actually knew the product, and it was like the board had been put together by a bunch of people who said, "what do we need? We really need contacts, and we really need ins to potential investors or potential buyers or potential suppliers." So, they weren't actually setting up a board, they were setting up a sales department. Now, it sounds like the people they got had fantastic connections, but they were never going to be able to tick all the boxes of a skills matrix. And for a board, the skills matrix is do you have somebody who's got finance skills who can really question the accounts that they're seeing, is there somebody who's got deep industry experience who actually knows what the product is and can say, "show me the clinical trials, show me the results, show me the product." I mean, these guys had not even seen the product. You've got to have real passionate about the product, not just about selling the product. I think the third thing they went wrong is that every company, and this should be driven by the board, should really have a strong purpose and mission statement, and the kind of not-for-profits that TasCOSS deals with, I mean, they're light years ahead of this company because they actually have a purpose and a mission, and they know what that is. This board seems to have had a purpose statement, we're going to get contacts and make a lot of money and bring in a lot of clients. Nobody seems to have had a purpose about what is our actual product, and how is it going to do good for society, and how is it going to contribute to the health system, and whose life can it change, and let's see some of the science, or everyone is just like, "let's bring in investors., let's bring in contacts, let's sell it to the army, whatever." Shocking. Fourth thing they did wrong was they had no diversity. I mean, all over 80? I mean, I don't care if they were men or women or aliens, diversity is really important, and obviously, they just didn't have it because no one was going, "this seems nuts to me." And if there had been like a young person there or a person who was, I don't know, a former nurse or something, I mean, its people were all just the same and they were probably all connected. Now, I know it's really hard when you're trying to set up a board, and say, you don't have a lot of money to pay, it's very tempting just to screw up the skills matrix and say, "well, I'll just get friends of friends." The trouble is those can all be very similar people to each other, and I think that's what we had here. We had very similar people. And then fifth what went wrong, when APRA, which is the big bank and Superfund regulator, when they looked at what went wrong with Commonwealth Bank after CommBank had a number of really big scandals, they did this big report which I'd really recommend if anyone has insomnia just to go through this. Actually, it's actually a fantastic read. But basically, what they said was with a board, your mindset should be not tell me, tell me this, tell me that. It should be show me. And so, they said, "don't say to
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the executive team, tell me.” Say to them show me. So, when your CEO says to a board, "ah, everything's going really great. All the people in our aged care home are really happy, or all our clients are really impressed with our service, or we don't have any complaints," rather than going all, "oh, okay, that's fine, you've told me," you should actually go, "show me." So, show me in this case would be show me the product, show me how it works, but in a not-for-profit situation, it might be okay, let me come on a walk through our homes and let me chat to the residents and see how they're going. Let me go out with a group of kids and experience what they're experiencing and seeing how their lives are changed. So, you've got to ask your executive team to actually show you as opposed to tell you, and that's really important. That's important for banks, but it's also important for not-for-profits here in Tassie. Cameron Allen: So many great points you were able to unpack there. In many ways, the Theranos board was almost ornamental, wasn't it? They weren't able to, as you say, to intervene, had no real oversight of the organisation and didn't ask those pressing, pertinent questions. As you said, show rather than tell. In your experience, I guess, have you found that those skills-based boards deliver the best outcomes? Naomi Edwards: Yes. I think to be on a board, any board, you really want to have some accounting and finance through it. If you can get legal experience, in most cases, even for not-for-profits, that can actually be really handy because you're going to be doing little contracts with other parties. You're going to have to obey the law, whatever it is, whether it's regulations about running your charity and so on. That can be really handy. And sometimes, there are really friendly, good, ethical lawyers. They do exist who might be really happy to come on board. Somebody who's actually had experience in the industry because one of the things that's very lonely for a CEO is when you're trying to run your organisation and you know that your board literally has no idea what they're talking about, and they certainly don't know more than you know. So, if you have a chair or board members who can mentor the CEO, that's incredibly powerful. If not, the CEO can go and get a mentor and advisor, but I would highly recommend you get at least a couple of people from the industry. And then, if you're having to do a lot of sales or marketing or whatever, whatever skills are really helpful for that industry. Cameron Allen: Let's get a little bit further into the principle and take a bit of a deep dive in there. Put yourself in the shoes of perhaps a new director. How important is it that that person stepping into a role is wellprepared and briefed with regard to what their responsibilities are? Naomi Edwards: It's incredibly important because I suspect that a lot of people, in fact, I have some friends like this, they get asked onto a board and they're really thrilled and excited, and they say yes, which is the right response, but they actually have no idea of the legal responsibilities of a board. And the responsibilities are not that different, whether you're in a small not-for-profit down in Cygnet or Sheffield or whether you're on the board of CBA, and it's very clear. There's a lot on your shoulders, particularly if you are dealing with vulnerable people or children, that kind of thing. So, there's very high responsibility. You
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need to understand what that is and what your responsibilities are, whether it's work health and safety or not trading insolvent, all of those things. Luckily, it's not that hard to know those things. So, you could go and do an $8,000 course with the AICD which is awesome but it's just totally out of the budget of most not-for-profits or you could read the AICD's not-for-profit guidelines which you guys are giving here through this totally awesome podcast. Those guidelines for not-for-profit directors, they're totally free. You can just read them. They're easy. Listen to these podcasts. Bang, you know your responsibilities. So, definitely do that. I would say it is the responsibility of the CEO and the chair when a new board member comes on board to sit them down and say, "what do you, and don't you actually know about doing this role? No shame at all. If you don't, we will teach you." So, as part of the induction, there's two sort of parts to the induction. One is here's all about our not-for-profit and our charity and what we do, but secondly, here's all about your responsibilities. So, here are the AICD not-for-profit governance guidelines. Read that. Come and have a chat with it. Here are the podcasts, whatever, listen to those, and you'll know a lot more after you listen to them. Cameron Allen: So, keeping that open dialogue is important, isn't it? Because I mean, down the track, obviously you want to be well-briefed when you come into a role, but it is that continuous learning, especially if you're new to a board and perhaps it's a little bit out of your comfort zone, which is equally as important. Naomi Edwards: And taking note of what the experienced directors do around the table and don't be embarrassed. I think it usually takes at least six months on a new board to kind of figure out what is the role and what's going on, what is the core issue here. So, give yourself time. Maybe don't jump in boots and all at your first meeting, like I've seen it happen, and it's like everyone's just groaning going, "Ah no, shut up." Just learn from the thing because it does take a little bit of while to get to know any organisational company. Cameron Allen: Yeah, don't go in too gung-ho then, hey. As a board director, what information do you need access to, or rather, you think it's important to have access to in order to make informed well-thought through decisions? Naomi Edwards: Well, it comes back to that whole thing of show me, don't tell me. So, you need to have a good line of sight, so whatever information is relevant. One of the things that I really push is that, as a director, you need to have access to the voice of customer. So, in other words, you need to know how are my customers thinking and feeling. Now, if it's a company selling a product, that's easy. Just go and buy the product, use the product. I would never be on a tobacco company board because I don't want to smoke cigarettes, and I don't see how you could be on that board and not smoke your own product. I think it's disgraceful that actually almost none of them are smokers. You really have to be prepared to suck up your own product. Cameron Allen: TMTYB S01E10 Board Effectiveness Transcript by Rev.com
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Quite literally. Naomi Edwards: Exactly. So, get into your own product. If it's where you're actually helping other people, if you're The Smith Family or the Salvos or whatever, go and go and walk in the shoes of the end clients. Now, you've got to be careful with that because you never ever want to overstep the boundary. You are not the CEO walking in. And so, when you're out with staff, you need to be very aware that you don't have the right to tell staff what to do just because in fact, because you're the chair and the board member, that is not your job, whatever. You don't have the job to criticise them, tell them off. You can praise them. That's nice, but it's definitely not your job to be telling you off. That all has to go back through the CEO. But you can really respectfully say, "look, I'd really like to have a tour of our home and check out," and a good CEO or chair will organise this for you, but constantly be saying, "how can the voice of the customer come into this board meeting to the decisions we were making?" And if you're like, "well, I haven't even met one of that customers, or I don't really know what our homes or our products or whatever look like," you're not being a good board member. You don't have all the information you need to understand. And of course, these days, there's social license as well. So, you need to know are we affecting the environment in a good way or a bad way, and are we affecting the broader community. So, it might not just be your clients, but it might be your clients' families or whatever, how are you affecting them. Cameron Allen: There might be a perception that people on boards are just out there in their ivory towers, but you need to go down and understand the nitty-gritty perhaps within the business a little bit without overstepping, of course. Naomi Edwards: Board members used to be like that, and they were just hopeless. They're dinosaurs, but these days, you have to totally roll your sleeves up and just know the customer and know the product. Cameron Allen: Is it for the chair, and you've obviously got experience in such a role, to set the standard of behavior for a board? Naomi Edwards: Totally. So, everybody is watching the chair all of the time, and it's not just the other directors who are watching the chair's behavior, but the staff watch the chair's behavior too. And so, even for me, if I go to someone's meeting and I have a cup of tea, I always try and wash my own cup afterwards which is not good because I'm really bad at stacking dishwashers. So, usually, it ends up worse for everyone then if I had just walked out and left it. But I mean, what are you signaling that you're superior to everybody else, which you're not. I mean, you're a team and you just happened to be the chair. And so, you have to totally model respect for everyone around you. You have to model that you are respectful of the CEO and not overstepping their job.
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So, basically, your job as a board is to hire and fire the CEO, but not to do their job. So, I think of it as scaffolding. You set the scaffolding, the parameters around which the organisation needs to operate, but then you go away and let them build the building. And so, if you are very respectful of the CEO or head of the organisation's role or the executive’s role, then other board members will be too. You have to really set the tone around ethical conduct, particularly around conflicts of interest. Conflicts of interest are incredibly tricky things to deal with and they're very prominent in Tasmania. So, that is kind of a problem in Tasmania that we are such a small population that, inevitably, when you are contracting out, sometimes very large contracts, that you will have relationships or your family has relationships, and as a chair, you just have to be whiter than white in calling out every single possible perceived conflict that could exist with you, with your family members, with your remote auntie, whatever, then the rest of the board can decide that is or isn't within our conflicts policy. And normally you'd say, "oh, well, we're this organisation. Do we need stuff like conflicts of interest policy?" In Tasmania, particularly if you're a larger not-for-profit, you actually have tendrils of networks everywhere, and the company you keep matters. And so, having a conflict of interest policy can actually be quite powerful in actually protecting your organisation from accusations of issues and stuff. So, totally, as a chair, everyone's watching you all the time, whether it's whether you check in with your QR code when you come into the building, or go to the ladies or go to kitchen and leave it a mess, but mainly at the meeting, it's about how respectful are you of the executive, and how strongly do you adhere to ethical conduct. Cameron Allen: Because a board in their own right is a team, I guess, isn't it? You want to be able to have those robust and transparent conversations and indeed around important things like conflict of interest, don't you? Naomi Edwards: You do, and it's really important that you do have robust conversations. And I suspect with the example that we discussed earlier, that there probably were not a lot of robust conversations happening at that board. Cameron Allen: Perhaps too much group think, do you think? Naomi Edwards: Well, probably they were all friends, and so they liked each other too much, and they didn't want toCameron Allen: Stir the apple cart. Naomi Edwards: They didn't want to break up a friendship with their mate. And so, I think that you have to be prepared to say to someone, "I've heard what you said, but respectfully, I actually have a completely opposite view, and I think that ABCD," and then it's up to the chair to go, "oh, okay. You know, Susan, well, Mary TMTYB S01E10 Board Effectiveness Transcript by Rev.com
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said that she actually has the total opposite view. What does everyone think about that? What do we all hear about that?" Now, that's actually quite hard to say, but you need to normalise that in a board meeting, and I noticed a lot of not-for-profits because they're kind of unpaid, people are sometimes alike, "man, I shouldn't have to put up with this shit. I came here, I do this for free. I don't want to be arguing or anything." Well, it's not an argument. I mean, a good chair will totally keep bringing it back and say, "look, we need to tease out. We actually don't all agree." And sometimes someone can go, "well, blah, blah, blah, blah, blah," the chair needs to say, ”well, does everyone else actually really agree? Do we agree with that?" And then just give space and silence, and someone will say, "actually, I feel a little bit uncomfortable with that, or I'm not so sure," because otherwise the risk is that the loudest, most talkative person just constantly dominates. Cameron Allen: And is it the role of the chair do you think to elicit those kinds of responses out of perhaps, as you said, some of the quieter board members, so that the boardroom isn't dominated by those couple of very loud voices? Naomi Edwards: Yeah, that's the key role of the chair is to actually make sure that everybody at the meeting is contributing, even quiet people. It should be okay to be a quiet person. In fact, somebody said to me about quiet people on boards, they said, "there's nothing wrong with having nothing to say at a particular board meeting, unless you insist on saying it." Quite clever because some people, we do love to hear the sound of their own voices at meetings too, and so part of the chair's role is just to stop those people talking too much and invite other people to speak and go, "Mary, you've been quiet. What are you think about what John just said?" Cameron Allen: Drawing on some of your time on boards, what are the signs of an effective board? I imagine we've covered off on a lot of these here, but could you simplify it or distill it down a little bit into what an effective board looks like? Naomi Edwards: They reach good decisions quite quickly, and they reach them as a team, not as an individual dominating proceedings. So, you have to believe in a board because some people don't believe in boards and they think it would be better if just a really smart person made the decision, and sometimes it is. I mean, I'm sure that a smart person is better than a dysfunctional board. If you believe in boards, you believe that in sort of group decision-making or behavioral theory that a group can come up with a better decision than an individual. And so, how do you get that kind of thing where you do get a better decision than if the smartest person in the room had just made there? Well, basically, it's because you're bringing in diversity around the table and people will listen to each other, but they'll have a structured discussion. So, they'll actually be influenced by each other and realise that they didn't have all of the information or all of the perspectives just because of their life situation. I'm old. You're young. You might have an insight into a situation that I just don't have. So, you TMTYB S01E10 Board Effectiveness Transcript by Rev.com
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actually reach a better decision than the smartest person in the room would have reached by themselves because of that alchemy of different views. So, if you're just going round and round in your board and not reaching a decision and taking action, then you're not an effective board. And if there's just one person who drives and dominates everything, you're not an effective board. Cameron Allen: We touched on this a little bit before, but to come back to a little clarity because this gets asked a lot in terms of the delineation between roles and the relationships that are really central to the running of an organisation we've got between the chair and the CEO. But then as you touched a little bit earlier in the podcast, you don't want to overstep, and at times as we know, when things break down, that's what happens. Can you explain a little bit in terms of those separation of roles, but also the relationship in and why they are so important? Naomi Edwards: Yeah. I mean, it's actually a strange situation to be a CEO reporting to a board because you live the job every other day. It's your full-time job. You probably know more about the role than anyone around the table, but what you say is I will defer to this process and that you guys give me input about my strategy and we'll drive it together. But again, there has to come a point at which you say, "and then, board, you just leave me alone to get on with the job." And I think often when you're not, particularly if you're not paying people to be on your board, then the board member kind of feels well, where's the quid pro quo, what do I get from this, do I get to sort of boss the CEO around with my particular bandwagon or the thing I'm interested in or do I get to say, "well, I really think we should go and do this on the west coast because I'm from the west coast or whatever," do I get to influence it a lot. And you have to realise as a board member, you actually only get to influence within the board meeting, within the confines of the discussion and the question that's being asked, but no, you are not running the thing. I think the reason why it's hard in a not-for-profit situation is often board members are brought on, not just because of their skills, but also because of their connections or contacts or their ability to help raise funds or organise sponsorships or whatever. So, people think, "oh, well, this person is a wealthy philanthropist or a benefactor role, I'll bring them on." And so then, it's kind of like, "well, we actually would quite like you to help us." Now, you can totally do that as a board member, but it needs to be kind of formalised and agreed, and you almost need to separate those two roles. So, first of all, you need to be really clear that the CEO and the board is comfortable that you're actually now going to kind of take off your board hat, and you're going to roll your sleeves up and do some volunteering work or whatever, get some sponsors on board. And it needs to be agreed what are the confines of that, and it needs to be kind of recorded that that's the context in which you're doing it. So, maybe as a chair, I can make an introduction for the CEO or have them meet some people who might support or sponsor our organisation. But I don't think I should be actually signing up the sponsorship documents and agreeing to what will happen around those because that's really the CEO's role. So, you have to know where the limits are, and the limits have to be agreed with the CEO and the rest of the board. So, it's not that as a board member you can never help or volunteer, but you need really strong guardrails around that and agreement with it, and then stick within the guardrails. Cameron Allen:
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Because you're both accountable to one another, aren't you, in a relationship like that, but also you don't want to encroach to the point where the CEO, although ultimately as you said you're responsible for hiring and firing, you don't want them to feel uncomfortable or though that you're trying to steal their thunder so to speak. Naomi Edwards: No, you can't do that. And the worst thing is that I see board members sometimes doing is bossing around and instructing staff who work for the CEO. There is no reporting line from any staff member directly to any board member or there shouldn't be. You are not their boss. Their boss is their boss. And the trouble is that you have a lot of influence or power. You have a lot of power. So, if you see someone and they know are you're a board member, and you wonder over and go, "oh, I think this room is really messy and it gives a bad look. I really think that we need to put some better posters up there and clean this up," of course, the staff member is going to be like, "oh my god, I just got told off or given an instruction by a board member. I'd better see to that." That's not your job. You go to the CEO and go, "oh, I noticed that that room's messy," or whatever, and then the CEO figures out what they want to do with it or not. Cameron Allen: Looking a little bit deeper into the policy side of things, what steps should a board take or should a board be taking to improve its performance? We did touch on a little bit earlier around it's important to have that record-keeping, that note-keeping through the policies, procedures, agendas and the like. But is there a way, I guess perhaps when something doesn't go as well as it should be, as we saw in the case study, if you have things like evaluations and reviews in place, will that hold you in good stead, and do you think that they're a good thing to do as an organisation? Naomi Edwards: Yes, but they don't need to be too fancy or too over the top. I mean, the level of your board review should be commensurate with the size of your board. So, I would say at the minimum, once a year, at a board meeting and just have this scheduled into your calendar meetings, the minimum is once a year discuss how do we think we're going as a board. Now, if you're not even open enough to have that discussion, then you've probably got some problems, but hopefully, you are able to have a sort of mature conversation how do we think we're going as a board. If everyone is like, "ooh, I have issues, but I'm too scared to say them," then right away, okay, we do actually have a problem. So, hopefully, you can have a discussion where you go, "well, I think this is going well, or the board meetings are going too long or the papers are great or the papers are terrible, or we don't get told information early enough." If there's something and then the chair should be offering to the directors if there's something you really want to say, then come and say it to me privately or whatever. So, that's the minimum. At the sort of maximum, you can actually hire people. There's billions of consultants who, for differing amounts of money, will come in and do a board review of you. I mean, you can get a board review for one or two grand or they go up to 40 or 50 grand depending on the size of the company. So, you can get someone to do that, or you could just have a little survey that you write down and you will answer the survey which just you could do it on Doodle polls or something which just has questions, like how effectively do we think the chair is running the meeting, whatever, or how good are the papers or the TMTYB S01E10 Board Effectiveness Transcript by Rev.com
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notes that the CEO gives us, are we dealing with strategic questions well. Just have a page of notes and all answer that anonymously and then discuss the results together. Cameron Allen: Is there a happy medium have you found in your experience? You said you have both ends of the spectrum, the more informal review to right at the other end of the spectrum where you hire an external consultant, or does it depend on the board really? Is that the simple answer? Naomi Edwards: Well, hire an external consultant if you're a really, really huge company because you should be doing that. So, for example, on Spirit Super, I mean, the law requires us because we're such a large company managing so many fields with retirement funds. The law requires us at least every three years so we have a full external review. You're getting industrial psychologists and people in to really understand how your board works. But then I'm on another smaller board where there's only five of us. It's highfunctioning and just having a discussion once a year works fine. So, I think it's literally related to the size of the organisation and the responsibilities. If your board doesn't seem to be going that well, or it's dysfunctional, it is definitely then a discussion is probably not going to be enough, and it's definitely worthwhile seeing if there's somebody who is willing, and some people will even do this pro bono, to come in and sit in on one or two meetings and then give you a really great piece of honest feedback about what's going wrong with your board. Cameron Allen: And how should that information, if done well, funnel through in terms of the feedback you're getting, albeit from a consultant or just round a round table, through Doodle poll. How should that information then be funneled back to board members? Should it go through the CEO first? Because it really shouldn't be a sledgehammer to whack someone over the head with it in the first instance. It should be a tool used to actually improve the governance of your organisation. Naomi Edwards: Yeah, and the best way is actually for the whole board together to go through the outcomes, after somebody, probably the chair will go through and check that there's nothing defamatory or destructive in there, but as long as it's all constructive and open and stuff, then I think the chair just needs to facilitate an open discussion with the CEO present about what are we doing well and where do we need to change, and come up with ideas for doing things differently. Cameron Allen: Fantastic. Thanks, Naomi. Look, it's been great to get your insights into this principle and just across the board drawing on your wealth of experience from a number of different boards, especially in a not-forprofit sense which is most important to our listeners. Finally, as we ask everyone on this podcast who comes on, and you're a great person to speak about this, are there any tips or tricks you'd like to share with aspiring board members or perhaps those who are starting out? Naomi Edwards:
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I think if you would like to get on a board, think about an area that you're really passionate about and that you burn up at night thinking about stuff and then look for a board where you can add value. So, think about what skills you have and what really lights your fire, and you can go and hunt down whoever that is. Work out what are the companies you'd like to be on the boards or the charities and not-forprofits. Go and track down the chair. You'd be amazed, I mean, usually they'd be like, "wow, you want to join my board? That's awesome. Go for it." And these days, all boards are looking for diversity. So, we're looking for young people. We're looking for tech skills, we're looking for a whole range of, of different perspectives. So, I think you'd be kind of met with open arms if you had that, and then when you join the board, don't be embarrassed to sit quietly for the first couple of sessions or to ask really dumb questions. Everyone's been there. But yeah, make sure you educate yourself once you're on the board about what are your responsibilities. Your podcasts, AICD materials, brilliant for that, and then enjoy it and have fun. It's really a wonderful role to be on. So, yeah, go for it. Cameron Allen: Don't be daunted by it. Naomi Edwards: No. Cameron Allen: Unless you're a non-smoker on a smoking board. Naomi Edwards: Yeah, that's not good. Cameron Allen: We might have to cut that bit out. Who knows? Thanks so much for coming on the podcast, Naomi. We really appreciate your time, and of course, your fantastic insights. Naomi Edwards: Thank you so much. I really enjoyed it. Thanks, Cameron. Cameron Allen: Thank you. Bridget Delaney: Thank you, Naomi, for your input on this principle. I've got so many things written down, and I just love how absolutely enthusiastic you are about being on a board. I think some of the key points for me come down to some really simple ideas that can be really useful when stepping into a board role. That idea around the board being the scaffolding for the organisation, but letting the CEO and the staff do the TMTYB S01E10 Board Effectiveness Transcript by Rev.com
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building, I think that provides a really clear picture to certainly myself about where those boundaries are for a board and the organisational staff. I think as well it's comforting to know that if you are beginning on a board, that it takes time to understand organisations and board culture, that you don't have to necessarily worry about having the expertise on your first go. Don't be gung-ho. Don't jump in. You can sit and you can listen, and you can ask those questions that may sometimes feel a little bit stupid. Being endlessly curious can only be a good thing, and then taking your time to sort of move into that space of providing advice, providing guidance, and exploring your role as a board member. Ensuring that you're aware of the voice of the customer when you're in on the board level, and I think Naomi said it quite clearly. Know the customer, know the product. If you're not going to smoke a cigarette, then maybe don't be on the board of tobacco is probably a resounding example that's not going to leave me. Industry knowledge being really important and potentially something that's a little understated. Knowing the industry with which you're operating in and which the organisation is operating in is valuable and can certainly do a lot towards risk mitigation for an organisation. I'm going to finish off with two final thoughts. Show me, don't tell me is such a good guiding principle. If you are being told that everything is fine and everything is going well, just ask to be shown. It's not a confronting thing to do. It's not overstepping. It's just understanding what it is you're responsible for and wanting a little bit of evidence of that. So, fundamentally, if you believe in boards, you believe in a group decision being better than one being made by one person. So, from the very outset of wanting to be on a board, you're fundamentally saying you believe in the collective power of a diverse group of people, and that in itself is super powerful. Let's finish with a point from AICD. They have drawn on Dr. Seuss to really nail this home. The more things you read, the more things you will know. The more that you learn, the more places you'll go. This feels so appropriate. The more you understand, and the more you take in, the more you can lead and support the organisation of which you are on the board of. Thank you for joining us today. We look forward to the next time you take us to your board. Take Me to Your Board is produced by Ikin Media for the Tasmanian Council of Social Service. It's presented by Bridget Delaney and Cameron Allen, music from Tide Electric, with special thanks to our guest, Naomi Edwards. Thanks for listening to Take Me to Your Board. Please subscribe or follow wherever you get your podcasts, and remember to tell a friend.
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