Magazine of the Institute of Directors in New Zealand

AUGUST/SEPTEMBER 2014 AUGUST/SEPTEMBER boardroom

UNLOCKING LEADERSHIP Governance Leadership Centre open for business HOW MUCH ARE DIRECTORS PAID? SIR MAARTEN WEVERS ON GOVERNANCE

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www.strategy.co.nz AUCKLAND | WELLINGTON | CHRISTCHURCH | SYDNEY HOW CAN I GET MY WORKING CAPITAL TO WORK HARDER?

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BUFFALO/HB5286 and Conditions can be obtained from www.heartland.co.nz or by calling us on 0800 85 20 20. BOARDROOM | 5 FROM THE EDITOR 10 Unlocking HOW CAN leadership Is leadership really all in the genes or is it a commodity bought by I GET MY The wearing of seat-belts for followers? Simon Arcus explores back-seat passengers did not leadership theories become compulsory in New Zealand until 1979; front-seat WORKING CAPITAL 10 Unlocking leadership passengers were required to wear 15 Changing the face of them from 1975. New Zealanders TO WORK Treasury who grew up before that time 17 IoD Directors’ Fees Survey will hold a collective memory HARDER? – the results are out of sliding unharnessed around 18 A new dawn in Adland the slippery back seats of their 22 At the cutting edge of A Heartland Business Call Account pays a market leading return and is simple – just parents’ cars. This may seem madly health and safety unsafe now but at the time there the way a call account for businesses and business executives should be. Funds are 26 In the eye of the storm was opposition to the new laws. held on-call, with easy access and unlimited transfers to one nominated bank account. 30 A pathway to experience There are no fees and you earn a great return on every dollar. Now, there is not only a legal 32 Keeping up with the play requirement for you to wear on continuous disclosure Maybe that’s why the Heartland Business Call Account a seat-belt but a cultural one 36 How to be an IPO rock star as well. Most of us slip on a 38 The changing landscape of is recognised as providing “outstanding value” by seat-belt unthinkingly as soon environmental liability independent financial products research company as we get into our cars. 40 How do you grow CPD points? Canstar who have awarded it five stars. Legislation can provide the 50 New people, new places, motivation for us to re-educate new ways Talk to us. We’re Heartland – New Zealand’s ourselves and develop new habits. Specialist Bank. Many believe that, once it is enacted, the Health and Safety INSIDE IoD Heartland Business Call Account Reform Bill will succeed in bringing 7  CEO Report about a new mindset regarding 8 Update health and safety in the workplace. 42  Director Development 45  Board Services Among the stories in this issue, you 46  Branch News will find examples of high-hazard 48 Branch Events 4.25 businesses where positive changes Interest paid monthly. Interest rate subject are already being made – well to change. Maximum balance $5m. ahead of legislative reform.

Katherine Robinson Editor, boardroom

Institute of Directors in New Zealand (Inc) Mezzanine Floor, 50 Customhouse Quay PO Box 25253, Wellington 6146 15 Changing the face 18 A new dawn in New Zealand tel: 04 499 0076 of Treasury Adland fax: 04 499 9488 Taking a fresh approach, Advertising is changing at the 0800 85 20 20 email: [email protected] the Treasury plans to work speed of light – can you keep www.heartland.co.nz www.iod.org.nz more closely with boards up? By Christopher Bray

A copy of Heartland Bank Limited’s Disclosure Statement and Account and Service General Terms

BUFFALO/HB5286 and Conditions can be obtained from www.heartland.co.nz or by calling us on 0800 85 20 20. 6 | BOARDROOM

Institute of Directors (IoD) boardroom is published six times SENIOR MANAGEMENT TEAM COUNCIL 2013/2014 a year by the Institute of Directors Chief Executive Officer Stuart McLauchlan, President; in New Zealand (IoD) and is free Dr William Whittaker Michael Stiassny, Vice President; to all members. Subscription for Liz Coutts, Auckland; Warren Dalzell, Manager, Membership, non-members is $155 per year. Auckland; Glenn Snelgrove, Bay of Plenty; Marketing and Communications Margaret Devlin, Waikato; Jim Donovan, boardroom is designed to Nikki Franklin Wellington; Dr Helen Anderson, inform and stimulate discussion Manager, Governance Leadership Centre Wellington; John McCliskie, Nelson in the director community Simon Arcus Marlborough; Ray Polson, Canterbury; but opinions expressed in this Geoff Thomas, Otago Southland magazine do not reflect IoD Corporate Services Manager policy unless explicitly stated. Chris Fox COMMERCIAL BOARD For all editorial enquiries: General Manager Commercial Ray Polson, Chairman, Jim Donovan, Editor, Katherine Robinson Tim Allen Margaret Devlin, Stuart McLauchlan, 027 5639 686 or email Brian Steele, Dr Alison Harrison, [email protected] Rangimarie Hunia For all advertising enquiries: The Institute of Directors has staff based at the National Office in Wellington, and Fran Page: 04 801 0450 eight branch managers operating from their localities. For National Office, telephone boardroom is designed by 04 499 0076. For branch managers’ contact details see Branch Events, page 49 Strategy Design & Advertising, www.strategy.co.nz boardroom is pleased to acknowledge the support of sponsors Institute of Directors in Marsh, Chapman Tripp and KPMG. New Zealand (Inc) Mezzanine Floor, 50 Customhouse Quay, PO Box 25253, Wellington 6146, chapmantripp.com, 04 499 5999 marsh.co.nz, 0800 627 744 New Zealand Tel: 04 499 0076, Fax: 04 499 9488 Email: [email protected] www.iod.org.nz kpmg.co.nz, 09 367 5800 BOARDROOM | 7

CEO REPORT

Creating a culture of responsibility New Zealand has a proud history as a nation of independent entrepreneurs and small businesses. An estimated 500,000 companies are registered at the Companies Office, and over 97 per cent of them are SMEs, many of those owned as family businesses.

Just as the Royal Commission of Inquiry raising awareness, representing directors’ everyone has a responsibility because it is into the Pike River Coal Mine Tragedy interests and effecting the culture change about creating and sustaining a culture of shocked the nation with its revelations needed to raise the country’s health accountability. Some work will be needed of shoddy health and safety practices, and safety ranking within the OECD. to demarcate and articulate responsibilities the conviction and sentencing of Gloria Currently, New Zealand is placed at 14th. more clearly, but major and complex Davis a couple of months ago could projects such as the Christchurch rebuild I have recently completed a national well have sent ripples of alarm to demonstrate that collective responsibility roadshow, The Contractor Initiative, jointly directors of those small businesses. is the key to minimising workplace injuries run by the IoD and Business Leaders’ Health The fishing vessel Easy Rider sank in and Safety Forum initiative. I was struck not Realistically, accidents happen. And Foveaux Strait when it was swamped only by the number of participants (over they happen in even the most safety- by a wave just after midnight on 550 over eight locations) but also by the conscious workplaces. It is impossible 15 March, 2012. Eight died in the depth of interest. to totally de-risk any enterprise but that does not mean that you should tragedy, including Gloria’s partner. In part, this interest is naturally generated not have a zero harm policy in place. The boat was registered to AZ1 Enterprises, by preparations for the changes in health of which Gloria was the sole director. In and safety legislation in 2015. The Health From what I have witnessed on the road the subsequent court case, she was and Safety Reform Bill will bring New with The Contractor Initiative, there found guilty of offences including failure Zealand into alignment with Australia by is a genuine desire for education that to take all practicable steps to ensure introducing a positive due diligence duty goes beyond compliance. The IoD has no contractors or subcontractors were on directors. Once enacted, directors already demonstrated that it is playing harmed while working on the Easy Rider. will be required to proactively manage a major role in this and will continue to workplace health and safety and ensure do so, since as the statistics indicate, Gloria may actually have had little to do that the organisation complies with this directors are responsible for a broad with the business or her husband’s boat, duty so far as is reasonably practicable. spectrum of the country’s business. and claimed in her defence that he had Significant penalties for a breach of In response to growing demand, the IoD assumed responsibility for health and duty are also being introduced. safety risk management. As a company has developed a range of health and safety director, she was held responsible for the The new legislation will require a person resources, the latest of which are the Online conducting a business or undertaking full range of directors’ duties, including the Health and Safety Module and a Boards (PCBU) to be responsible for the health in Action workshop for senior directors. wellbeing of employers as contractors. and safety of contractors and sub- There will be some who feel they have heard It was a brutal reminder that being a contractors. The concept of the PCBU enough and want to move on to the next director is a serious job with weighty and how contractor responsibilities challenge. However, the Health and Safety responsibilities and stiff penalties if are apportioned and managed has Reform Bill has not yet passed and Australia these are ignored. And this applies generated the most interest. is reviewing its health and safety legislation whether you sit on the board of a large It is not a case of sheeting back all – upon which ours is based – so there is corporate or are an owner operator. responsibility to directors or owners. clearly a long way to go. A business that There are heartening signs that there is a It is about proportionality. As IoD Vice- does health and safety well is most likely to growing awareness of health and safety President Michael Stiassny commented do everything else well. It is therefore not responsibilities. The IoD has committed to at the select committee presentation, only a necessity, but a business advantage. 8 | BOARDROOM

Update

RECENT APPOINTMENTS Chartered

We would like to congratulate the following members on their new board positions. Director –

Forrmer Mediaworks head Brent Impey is Steve Saunders is to be a director at progress report now chair of the New Zealand Rugby Board Landcare Research Transitioning of current members into the new membership structure is well underway, and the new categories will take Dame Jenny Shipley is chair of China Colleen Neville is to be a director at effect on 1 October. We would like to thank Construction Bank (New Zealand) New Zealand Forest Research and Scion all those who have updated details of their governance roles on our database. If you Kiwibank deputy chair Alison Gerry has John O’Hara joins the ESR board have not done so already, log on to been appointed to the Infratil board www.iod.org.nz and click on Update my details. Nick Main and Dr Gillian Lewis join the TSB deputy chair Bruce Richards has been NIWA board Applications to upgrade to Fellow closed named the new chair, with Murray Bain to on 18 July and for Chartered Member on succeed him as deputy chair 31 August. Jane Taylor has been appointed deputy chair of Landcare Research We will be constantly updating the Sarah Haydon is to be a director at information on our website as we GNS Science approach the 1 October launch date. For Marion Cowden is to be promoted an overview of Chartered Director, see to deputy chair of ESR the brochure Chartered Director – a guide Jim Donovan will be the new deputy chair of for current members. This is available REANNZ for download as a PDF on our website.

If you have any concerns or enquiries Sam Robinson has been reappointed chair regarding your membership, of AgResearch, new appointments are Jeff please contact Dr Lisa Docherty, Grant and Michelle Alexander Registrar, phone 04 470 2645 or email [email protected]

IOD BY NUMBERS* Queen’s Service

1 Medal Awarded years1 6594 130 3.5 50.9% The IoD warmly congratulates Karen members as at new members median length of members with one Sherry, who was awarded the 30 June 2014 in June 2014 a directorship or more unpaid Queen’s Service Medal (QSM) for directorships services to the electrical industry.

* Correct at time of publication, 1 According to The IoD Directors’ Fees Report 2014 BOARDROOM | 9

Aspiring Director Award Winners Maria Stockman and Peter Tinholt were Keeping up with new joint winners of the Bay of Plenty’s 2014 Aspiring Director Award. Noting the high accounting standards standard of applicants overall, Deryck Accounting standards are changing, environment, we think this will be welcome Shaw, one of the judging panel said “We affecting 95 per cent of New Zealand news to any company director looking to were not able to choose one winner, as businesses, reducing their compliance streamline processes and make efficiencies both were just as deserving as the other.” requirements and potentially where they can,” Mr Mitchell says. Clare Kearney won the Otago Southland saving them time and money. The XRB stresses that applying the proper branch’s 2014 Aspiring Director Award. Following changes to legislation, the accounting standards is a fundamental Otago Southland Branch Chair Geoff majority of New Zealand’s small and duty for company directors. Mr Mitchell Thomas was impressed with the effort Clare medium sized businesses will not have encourages all directors to ensure that put into developing herself for board roles. they understand what the changes mean to produce annual accounts which follow Clare currently serves as chair of Network for their business by talking to their accounting standards issued by the External Waitaki Ltd and deputy chair of Sport accountant or going to www.xrb.govt.nz Reporting Board (XRB) for any financial Otago, in addition to being on the board for more information. year that begins on or after 1 April 2014. of Waitaki Community Garden Trust.

“The new legislative arrangements and Reminder: applications close on accounting standards give businesses 19 September for Auckland branch’s a greater choice to do what’s best Emerging Director Study Award. The for them and for many this will help winner will receive $2,000 towards an IoD reduce time and compliance costs,” Save the date professional development course, mentoring says Graeme Mitchell, Chairman of the IoD Leadership Conference by a senior director, a year’s complimentary XRB, which has overall responsibility membership of the IoD, and a year’s free for setting accounting standards. 21-22 April 2015 attendance of Auckland branch events.

“While it is difficult to quantify the extent The Langham, Auckland For further details and to apply, visit the of the savings, in a competitive business Auckland branch section of www.iod.org.nz

directorRem Found the right director? Make sure you keep them. Are your fees right for attracting, motivating, and retaining top directors? Do you have the best people who can drive growth and performance for your organisation? With increasing demands being placed on directors to perform, it is important that the reward is appropriate for the risks and requirements of the role. We can help you set the right fees for your directors with our DirectorRem tailored benchmarking services. We offer a range of services suited to your needs and budget.

Call us to discuss on 04 499 0076 or email [email protected] iod.org.nz IOD14004/1 10 | BOARDROOM Unlocking leadership Whether it is nature, nuture or a commodity, leadership is a quality that sparks debate. Simon Arcus, Manager of the IoD’s newly established Governance Leadership Centre, looks at what defines leadership and asks whether there is a role for a senior independent director on New Zealand boards BOARDROOM | 11

Did you know scientists at University from my headmaster, Ian McKinnon in order to determine the leadership the College London claimed to identify FInstD, and never found a better or business requires. This includes taking a leadership gene in their research? more succinct definition. Moral courage time to develop profiles of executive The study is the first to identify a DNA includes being able to conceive a vision excellence, institute succession- sequence associated with the tendency and inspire others by it as well as the planning processes and consider long- for individuals to occupy a leadership persistence and resolve to implement it. term needs. Bloomberg Businessweek position. (It’s gene rs4950 for those recently suggested this is a weak spot interested). Maybe it’s time to pack up and LEADERSHIP IN GOVERNANCE for some boards in the United States: go home if this business called leadership The governance world calls for specific “When many of the present-day members is as simple as gene sequencing… types of leadership which can evolve of boards were rising in their careers to suit specific circumstances and I suspect the gene revelation merely adds they weren’t exposed to good structures needs. Changes of leadership on the to the debate about whether leaders and processes for senior-level executive board can lead to significant cultural are born or made. Tomes abound on change. Different types of leadership assessment. So while directors may feel the characteristics and determinants on the board can also be identified. they are on familiar ground when, for of leadership. Research even runs example, they’re engaged with financials, to study of primate behaviour. The board is a system which will function they may be unfamiliar with best best when there is effective leadership from One of the recent contributions to practices in senior-level assessment.” the chair. The chair is typically a first among leadership thinking is outlined in the May equals in the boardroom and the leadership Increasingly, boards are involved in 2014 Harvard Business Review. Authors W style this calls for may be quite different establishing a solid foundation for an Chan Kim and Renée Mauborgne essentially from the pattern of a CEO. Through skilled incumbent CEO. The first 90 days has characterise leadership as a product. It leadership a chair creates an environment long been regarded as a golden period can be thought of as a service that people in which the board functions at its best. in tenure and some boards now spend in an organisation ‘buy’ or ‘don’t buy’ and He or she manages a complex set of significant time working with a new CEO can be understood as having customers: relationships to create consensus between to prepare definitive plans for that period. “[There are] the bosses to whom the directors and take the business forward. We have seen a trend of management leader must deliver performance, and In a sense the chair is a servant leader, consultants beginning to offer specific the followers who need the leader’s drawing out the views of others and landing services to help with this task. guidance and support to achieve. When the board discussion at the right place. people value your leadership practices, The leadership of the board calls for savvy A NEW PARADIGM: THE SENIOR they in effect buy your leadership… behavioural intelligence and relationship INDEPENDENT DIRECTOR But when employees don’t buy your management: a specific kind of leadership. We should be open to ideas that add value leadership, they disengage, becoming to leadership on boards. One new concept The board is the strategic leadership group non-customers of your leadership.” introduced overseas is the role of the of the business. This requires the courage senior independent director (SID). The SID Conceptually, there’s some merit in to look over the strategic horizon, envision is an emergent feature of publicly listed the metaphor. But I can’t help thinking the future, hold management to account companies on both sides of the Atlantic. that the flavour of the definition goes and help chart the direction of the business. The notion of the SID was introduced by a little too far towards commodifying The board is a group of thought leaders. the UK Cadbury report in 1992 and the leadership as customer service. Critically, the board has the vital task subsequent Higgs report endorsed the So what do I think? My own notion of of making the choice of leader for the concept. While many UK companies had leadership is simple. It is the moral courage whole organisation: the CEO. The board a SID-like director before the reports, to make decisions and take responsibility should be putting significant time into it was suggested that the position be thereafter. I heard this many years ago understanding what leadership looks like codified as part of good governance 12 | BOARDROOM

practice. The SID role is intended to provide The SID role calls for moral courage to the chairman, chief executive or finance boards extra muscle by giving him or her take decisions or give guidance that is director or who may have concerns about a number of key responsibilities. The at odds with the chair at times. This the performance of these individuals.” objective is for the SID, as an experienced makes it a sophisticated position on One of the most important arguments for a director, to contribute specifically to the the board and calls for experience and SID is to provide a balancing effect on the overall health of the board. A SID has skill. It requires an honest broker who role of the CEO and chair. A combination a number of key duties on the board: can take the non-executive director of a weak chair and a dominant CEO will • provide an alternative route of view to the board in times of difficulty. create problems for the board just as a communication for major shareholders, dominant chair and weak CEO might. A particularly where the concerns are not INITIAL RESISTANCE STRONG combination of a chair and CEO marching in resolved through normal channels of Resistance to the notion of a SID from step can also have upsides and downsides. communication. senior directors was powerful. Criticism The SID role in providing feedback to the • key involvement in the appointment of was heaped on the idea by a number of chair may add an important safeguard. a new chair by chairing the nomination senior and distinguished British directors. At its most basic the push back was along committee A NEW ZEALAND CASE FOR A SID ROLE? • lead the annual appraisal of the chair three broad lines. First, a perception of unnecessary complexity for boards. The SID role is not a significant feature • provide a reference point for other Secondly, opponents alleged the SID role on New Zealand boards nor provided non-executive directors where dis- introduced ambiguity into shareholder for in regulation or guidelines. Is it time satisfaction or other issues arise relations. To whom was the shareholder we consider the SID (or similar) on our with the performance of the chairman. to go as first point of contact? Third, the publicly listed companies? Many New • ensure that the chair is co-ordinating role of a SID would actually create a Zealand boards may already have a de the views of the shareholders and that counterweight to the chair and unbalance facto SID where a skilled and experienced concerns are conveyed to all directors or undermine the power dynamics and director is instrumental in the effective • ensure that appropriate succession- clear authority lines of the board. operation of the board. A formal role on planning procedures are in place for the board for a savvy independent director the board. According to the IoD UK, the initial may provide an excellent support for the scepticism about the SID role appears The UK Corporate Governance Code chair, particularly where the stakeholder to have largely vanished and its value is and investor environment is complex. in June 2010 recognised the unique now recognised. role of the SID in Article A.4.1: Would a SID role be so different from “The post caused some controversy when “The board should appoint one of practice today? The role of a deputy chair it was first proposed, with claims that may already have some of the features the independent non-executive it made governance more cumbersome of a SID but equally may merely be a directors to be the senior independent and weakened the role of the chairman… designated stand-in position for the chair. director to provide a sounding As time has moved on, the role has board for the chairman and to serve become generally accepted. When the One area where a SID may add value is in as an intermediary for the other board is undergoing a period of stress, the capital markets. Kiwisaver and other directors when necessary. The senior the senior independent director’s role mutual funds are beginning to change the independent director should be becomes vitally important. He or she is shape of the New Zealand markets and available to shareholders if they have expected to work with the chairman and their influence can only grow. This may concerns which contact through the the other directors, and/or shareholders, mean re-examining whether the existing normal channels of chairman, chief to resolve major issues. For example, corporate governance settings are correct executive or other executive directors they can act as an alternative point of or whether innovations such as the SID are has failed to resolve or for which contact for investors who may have called for. Funds will become significant such contact is inappropriate.” made little headway in discussions with long-term investors with specific views BOARDROOM | 13

Governance Leadership Centre launches The IoD has established a new research, policy and thought leadership hub, the Governance Leadership Centre (GLC). and influences on the companies to which The GLC’s mission is to foster a dialogue with the IoD membership, through articles they are linked. The need to manage such as this one. As part of its mandate to keep IoD members informed, the GLC relationships will deepen. This may also also issues Practice Notes on how legislative changes may affect directors and also bring with it debate on the need for a directorsbriefs on topical issues. To date, the GLC has issued directorsbriefs on principles based code for institutional the Health and Safety Reform Bill and more recently on technology governance. investors akin to the UK Stewardship Code. The GLC is also responsible for developing a range of resources on the IoD website aimed The original notion of the SID was intended at connecting members with current best practice information. In the Governance for publicly listed corporate boards. It isn’t Resources section, you will find a range of resources that help to define what good difficult to see how the role might be useful governance practice is and what the roles and responsibilities of the director are. in other arenas or adapted to suit. Boards, which deal with complex stakeholder MEET THE TEAM environments such as charitable or Simon Arcus, Manager, Governance Leadership Centre sports organisations, may benefit or Simon is a member of the leadership team at the IoD, including co-operatives could be attracted to periods as acting Chief Executive. He was Managing Editor of the the leadership role of the SID. The SID second edition of the IoD’s foundation guide to governance, The could strengthen the board’s capacity to Four Pillars of Governance Best Practice. Simon is a solicitor with communicate with stakeholders. Other an LLB/BA from the University of Otago and Postgraduate Diploma boards with a strong commitment to in Business from Massey University. He is a Senior Associate evaluation and continuous improvement ANZIIF and a member of Chartered Secretaries New Zealand. may see value in the SID’s role in feeding back to the chair on performance. Felicity Caird, Governance Leadership Centre Executive The leadership role of the board is Felicity joined the IoD in March 2014. She came from the subject to evolution and leadership may Office of the Auditor-General where she was a Sector Manager, include innovations or opportunities reporting to Parliament and working with management that add value to corporate governance. and boards of a range of public sector entities, including A SID is about appointing a director to SOEs, DHBs and Crown entities. Prior to that she worked at a leadership role even if that role is, at the State Services Commission on governance in the wider times, out of step with the chair. The state sector. Felicity has an MA in history from the University SID is an idea whose time may not have of Canterbury and a DipLib from Victoria University. arrived, but if we are serious about adding value in the future a strong senior board Pete Hodkinson, Governance Leadership member role may be worth considering. Centre Team Administrator Pete is a past President of the Unitec Students’ We would be interested in hearing Association, President of the New Zealand Union of your views on the subject as part of the Students’ Associations, Member of the Unitec Institute discussions on the IoD’s LinkedIn group. of Technology Council and has sat on a number of other governance boards in the student and education sector. 14 | BOARDROOM BOARDROOM | 15

Changing the face of Treasury Charged with overseeing the Treasury’s commercial, financial and corporate operations, Deputy Chief Executive Vicky Robertson says that the department plans to work more closely with directors of boards of SOEs and Crown entities

“Treasury’s organisational vision comes “New Zealand Post’s traditional business down to achieving higher living standards is in decline, Solid Energy is operating in “We believe the for New Zealanders. We’ve deliberately a depressed international coal market, Government and boards framed this vision to mean more than and KiwiRail is unlikely to become a economic growth. A range of factors financially self-sustainable business at need to have a clearer influence people’s quality of life. This least for the foreseeable future,” she says. shared understanding includes their physical environment, “Our goal is to manage the Government’s health, education and skills, social of what good balance sheet in a way that delivers better institutions and conventions, and natural outcomes more efficiently and we know performance looks resources such as quality water, a stable governance is one of the keys to this.” climate and biodiversity,” says Vicky. like, especially from the A lawyer, the mother of two teenage As well as being the government of the shareholder’s perspective” sons, and a former Black Sticks hockey day’s lead adviser on economic, financial representative, Vicky has had a 14-year and regulatory issues, the Treasury career with the Treasury. She was the oversees 49 government-owned enterprises first woman to lead the Treasury’s tax unit with practical solutions that will allow New that have either full or partial commercial and in 2010, was seconded to the United Zealand to play to its strengths,” she says. objectives. These enterprises employ over Nations Development Programme in New 40,000 people and, as at 30 June 2013, In wanting to take a more active role in York, where her brief was to contribute to held assets of around $125 billion. This managing the Government’s investment, a structural review of its business model. includes investment funds, commercially she says Treasury’s approach is no focused companies – some listed on The Treasury’s pivotal role in government different to shareholders around the the NZX – and policy-focused assets. attracted her to the department and world who stepped forward to take a holds her interest to this day. more active interest in their investments Some of these entities perform well, says after the global financial crisis. Vicky, especially the financial assets like “Treasury has a unique role because you the New Zealand Superannuation Fund, can see across a breadth of issues and “Treasury is acting on behalf of its which has prospered from the global you can see their interconnectedness. It investor which is the government of the recovery in equity markets. But she means that you are well placed to make day. We have to be on the front foot if acknowledges that others, such as New a difference to New Zealand. You can see we’re going to achieve the return New Zealand Post, Solid Energy and KiwiRail the opportunities as well as the challenges. Zealanders can reasonably expect for have been operating in challenging sectors. My challenge has always been to come up their considerable investment,” she says. 16 | BOARDROOM

She says that the SOE model that a number “Together with the company, we are And to answer the question of who will of New Zealand’s commercial entities have standing back and taking a systematic, be monitoring the monitor, Vicky says been operating under was not set up with segment-by-segment look at the business. that the Treasury is well aware that it long-term government ownership in mind. It’s a genuine partnership, with joint needs to keep challenging its own point governance and a Treasury secondee to the of view. It has recently established “It was an arm’s length structure intended project. And it might be that we come out of Commercial Operations Advisory Board to instil a high level of independence and the project with different views on the way to provide an external perspective. impose market disciplines on an entity forward, but we will have the same deep, in preparation for divestment. This has shared understanding of the company’s Experienced directors Anne Blackburn, meant that while we’ve always sought performance drivers and prospects. Marko Bogoievski, Roger France, to monitor entities, and have at times Cathy Quinn and Mark Verbiest were challenged decisions, we’ve deliberately “We need to work recently appointed to the board. been careful not to get too close to boards. more closely with the “They bring bring with them exceptional “And to be clear, the boards of commercial skills and experience, and have a high entities owned by the Crown will companies we own to standing in the commercial community,” always be responsible for a company’s get on the same page says Vicky. “It will keep our commercial performance, and we will always be advice tightly connected to markets and responsible for holding them to account. about what good best practice investment management But we believe the Government and the performance looks like in New Zealand and internationally. And Crown boards need to have a clearer it will provide advice on the diversity shared understanding of what good and how the company of corporate boards, whether wholly performance looks like, especially is going to achieve it” or partially controlled by the Crown.” from the shareholder’s perspective.”

In practice, Treasury’s plans to lean in “For purely commercial assets our ambition Vicky Robertson has overall responsibility as an investor will mean not only looking for better performance might involve for the Treasury’s commercial, financial and at the decisions boards make on specific setting targets. Where things become more corporate operations. She has spent her issues, but at the overall company strategy. difficult is where an entity has multiple 14-year career at the Treasury in a variety of objectives, some of which are social policy areas, with roles ranging from policy Historically, boards have focused on rather than commercial. How do you put development on Kiwi Saver legislation to developing their strategy in the best a value on non-commercial objectives so heading an interdepartmental group on interests of the entity. This is consistent that you can effectively set priorities and the 2005 review of New Zealand’s climate with the philosophy of the SOE model measure overall success? This might be change policies. She led the Treasury’s but, says Vicky, it’s not always consistent an area where we take a cue from thinking tax unit and was seconded to the United with the broader aims of the Crown. around public private partnerships – for Nations Development Programme in New “On the other hand, we realise that example, under the PPP for Wiri Prison, York in 2010, where she led a strategic we employ directors for a reason. We the operator will be incentivised to and structural review of the organisation. really value directors and the role that reduce reoffending. Conversely, payments can be cut if specified targets for the Before joining the Treasury, Vicky worked they play. We want to have a deeper effectiveness of rehabilitation and for the Ministry of Commerce, focusing understanding of their perspectives too, reintegration programmes are not achieved. on regulatory and competition policy. so that we can provide better advice where the shareholder needs to make Once a strategy has been set, Treasury will Vicky is a mother to two teenage boys, and important decisions that might help to focus on ensuring that board appointments has a law degree from Victoria University strengthen and grow the business. are consistent with that strategy. of Wellington. She is a former Black Sticks hockey representative and is an avid “So we need to work more closely with the “We’ll be aiming for a careful balance mountain biker, competing at national level. companies we own to get on the same between the need for deep, specialist, page about what good performance institutional knowledge, and fresh, looks like and how the company is challenging perspectives,” she says. going to achieve it,” she says. “We are really interested in how boards For instance, Treasury is currently are thinking about best practice, working with KiwiRail to develop particularly relating to how diversity long-term sustainability. can affect board performance.” BOARDROOM | 17 IoD Directors’ Fees Survey – the results are out The IoD Directors’ Fees Report 2014, a key source of information on director remuneration trends and work practices in the New Zealand market, is now available

This year’s survey, carried out in conjunction MEDIAN NON-EXECUTIVE DIRECTOR FEE – FEMALE / MALE with dsd Consulting, is the result of a record number of participants, representing 1,262 organisations and 1,883 directorships. 2013 2013 The results reflect a more confident economy $25,000 $38,500 with a spike in non-executive director fees after years of remaining relatively static. The median 2014 2014 fee for a non-executive director increased from $35,583 $36,000 to $40,000. The greatest rises by $41,333 industry were in property and real estate services (27.8%), retail (21.9%) and construction (21.3%). MEDIAN NON-EXECUTIVE DIRECTOR FEES FOR MĀORI ENTITIES This year, 23.9% of the respondents were women, compared to 19.9% in 2013. Not only did more $18,000 women take part in the survey, but those surveyed $12,500 also recorded a $10,500 rise in their median fee.

The yawning disparity in fees between New Zealand-owned and overseas-owned companies continues to widen. The median for directors on the boards of locally owned 2013 2014 firms is $36,000, compared to $85,000 for overseas-owned companies. MEDIAN NON-EXECUTIVE DIRECTOR FEE FOR The survey also offers a window into directors’ NZ-OWNED / OVERSEAS-OWNED ORGANISATIONS working practices – for each hour that a board formally meets, for instance, board members spend at least one hour in preparation. The median of hours spent in other engagements, for example, meetings, phone calls and discussions outside the boardroom, have risen to 24 per annum. And directors are frequently on the move, with 20 hours per year devoted to traveling to board meetings. $36,000 $85,000 The survey will be available to participants at $350, members who did not participate: $550, and non-members: $650. It can be purchased from dsd Consulting – [email protected] FEE MOVEMENT BY ROLE $60,000

NON-EXECUTIVE CHAIRMAN $50,000

NON-EXECUTIVE $40,000 DIRECTOR

$30,000 2010 2011 2012 2013 2014 18 | BOARDROOM

A new dawn in Adland The internet and digital media have reshaped the communications landscape, with new technology allowing for pin-sharp targeting of customers and clients. Balloons and barbeques or data and analytics: which side of the digital divide is your business on? By Christopher Bray BOARDROOM | 19

Kevin Blight is one of New Zealand’s most experienced advertising media planners “Are we still running and buyers. On his website is just one a shop, welcoming sentence: “The way we communicate customers when has changed more in the last five years than in the last 500 years combined.” His they ring the bell bookends are the printed book (1450) or are we engaging and Facebook (2004), but have recent changes really been so profound? forward, offering

Well, consider this: in the last five years, value, establishing newspapers’ share of advertising industry and maintaining turnover in New Zealand has dropped from 33 per cent to 21 per cent1 – in real relationships?” terms, a 40 per cent decline in their advertising revenue in just five years. Rob Mills, Melbourne-based director Over the same period, interactive media and CEO of sports and entertainment experienced a 220 per cent growth rate in consultancy Gemba, shares a case study real terms. Given the trends, there will be of a sporting organisation with a target more money spent on online advertising of $6 million of ticket sales for an event. than on newspaper advertising this After spending $400,000 on traditional year, and within a couple of years, more advertising and promotion, they achieved money spent online than on television. sales of $5.8 million. So, they changed their approach. They built a database. The media landscape – the ways in which 600,000 names: people interested people are communicating with customers in their sport. And they used digital and prospects – has already changed. In marketing techniques to better understand a recent column, New Zealand Herald those people and to communicate media writer John Drinnan quoted PwC with them directly…personally. As a partner and digital specialist Paul Brabin. result, they sold $8 million in tickets, “For years, he says, people talked about for a media spend of just $50,000. the ‘journey to a digital future’. We have now arrived and it is “digital now’”. “Just one of the things their data and analytics enabled them to do,” says Okay, hear that. But why? Why is traditional Mills, “was to identify the fans willing media declining and what’s so attractive to pay more to attend the event – to about digital media? “Fragmentation,” buy a premium offer. As a result, not says Blight. “Once upon a time, television only did they sell more tickets, but was a family viewing event. Everybody the average ticket price went up.” watched one channel. Now, homes have two or three television sets and people “There’s the old saying,” says Andrew Fraser, Director of Marketing for Tourism are watching individually, not together, or New Zealand, “that half my advertising is they’re watching or reading content online.” wasted, but I don’t know which half. Well, With more TV channels, more radio now we do know which half is wasted stations and more magazines, traditional and we can do something about it. The media is harder to buy and mass digital tools give us a clear line of sight audiences are harder to reach. to conversion. We can watch people’s

1 2008-2103. Data from Advertising Standards Authority. 20 | BOARDROOM

Pause. There is more than one story here, door. The new marketers are not waiting so let’s consider what we’re observing. until you step inside; they’re out in the The long story – the overarching story – is market square, offering tastings, having the dramatic, disruptive, ongoing impact conversations, discovering what people of the Internet on our world: its effects are looking for. Providing information rolling and unfolding everywhere we look, that’s relevant. Inviting them to take a like ever-changing patterns in clouds. closer look. It’s not so much that they’ve taken down the sign (although they have The second story is how traditional media put away the loud hailer); it’s more that is responding. In 1960, Theodore Levitt they’re not standing behind the counter, wrote his now-classic Harvard Business hoping the sign will do the trick. Review article, ‘Marketing Myopia’, in which he argued that businesses fail Engaging forward exploits and explores when they define themselves by what they the new technology and the new platforms, do, rather than by what their customers but, really, it is a different paradigm. It’s need. Newspapers have discovered that making future customers as visible and people didn’t want classified advertising as real as existing customers – identifying after all; they wanted to find a job, buy them, out there, trying to figure out a house, or sell a secondhand car. What what they want – and connecting with television and radio stations are now asking them: helping them, drawing them themselves is “are we broadcasters, or closer. Traditionally, customers have are we in the news and entertainment been strangers until they cross the business: platform or content?” threshold. Under this model, by the time behaviour, learn and respond. We know they arrive, they are already friends. that if we can drive people to the ‘100% And so the question for directors to Pure’ website, when they visit New Zealand “The more you consider, when next the marketing activity they will stay longer, spend more, and is being discussed, is this, “Are we still go to more places around the country.” understand about data running a shop, welcoming customers Tourism New Zealand spends $50 million and analytics, the less when they ring the bell – delighted they a year promoting New Zealand overseas, you need research.” saw our sign – or are we engaging forward, and today 70 per cent of that is spent on offering value, establishing and maintaining interactive digital media. The 30 per cent relationships and learning from those it spends on traditional media is mostly But the third story is what this article is relationships what people are looking in countries slower to adopt new media. about: how advertisers – marketers – are for and what they might buy? Which side responding (or should be). Because what’s of the digital divide are we on: balloons Fraser makes a distinction between interesting is that ‘data and analytics’, to and barbeques, or data and analytics?” what he calls ‘traditional digital’ such as use Mills’ term, are not new: Don Peppers banner advertising – “off-line techniques Which brings us back to our opening and Martha Rogers wrote The One To One being used online” – and Tourism New question: has the way we communicate Future back in 1993, and the world’s been Zealand’s approach. “What digital changed more in the past five years than awash in loyalty programmes and CRM technology allows us to do,” he says, “is in the last 500 years combined? You might systems ever since. to understand what drives people and to debate the dates. You might ask, “what do provide content that’s highly relevant.” But what is new is that the focus of all of you mean, ‘the way we communicate’?” But that relationship marketing over the past you surely can’t deny the sentiment. The Fraser agrees with Rob Mills, who 20 years has been on building stronger Internet is changing the world as profoundly says, “The more you understand about engagement with existing customers. The as did the printing press. We are at the data and analytics, the less you need reliance on traditional media advertising end of the era of exposure – of mass media research.” He points to other marketing for customer acquisition has continued. advertising – and at the dawning of the paradigms that are changing, such as the But now, leading marketers are using age of engagement. Let the sun shine in. interaction with media organisations. “We digital technology to build stronger are working with owned space, earned Christopher Bray is a corporate engagement with potential customers. space and paid space and creating and storyteller and independent chairman leveraging content accordingly.” And, he The future – the now – that Rob Mills of Equestrian Sports New Zealand. says, “Because of the strength of the and Andrew Fraser are describing Previously he was Managing Director New Zealand brand, we’ve been able to is one involving engaging forward: Australia/New Zealand for relationship partner directly with Facebook and Google building relationships before there is a marketing agency Carlson Marketing – they’re keen to work with organisations relationship (in the sense of being a paying Group (now Aimia). like us who are pushing the boundaries.” customer). There is no shop; there is no BOARDROOM | 21

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HEALTH & SAFETY

By the middle of next year, reforms of the country’s health and safety system will have come into force. As part of a series of boardroom features on this important topic, Amy Williams examines how some businesses in high-hazard industries have taken the lead in promoting a positive health and safety culture

To many, the overhaul can’t come soon He says that a culture change is already enough. It took the tragic events of the taking place in many companies in high Pike River Coal mining accident in 2010, hazard industries. These industries are in which 29 men lost their lives, to put those that have the most on-the-job health and safety firmly on the agenda. fatalities, such as the petroleum, forestry, construction, and extractives (mining, That year, a coalition of business and tunnelling and quarrying) sectors. government leaders called the Business Leaders’ Health and Safety Forum was “We have a young gun risk- set up to improve the performance Julian Hughes of workplace health and safety in this taking culture in our people. country. The forum’s ultimate aim is to achieve zero harm workplaces by working The more you can involve with chief executives, and it has 185 such and talk to and empower business leaders on its membership. the workers, the better” The forum’s executive director, Julian Hughes, spends much of his time educating business GETTING OUT OF THE BOARDROOM leaders about how to create a health and When boardroom spoke to Sjoerd Post, he safety culture, ensuring that the vision for had just come back from a safety walk around zero harm is a shared one. This included the the Marsden Point oil refinery, talking to Sjoerd Post recent national roadshow, The Contractor workers about how safe they feel, what the Initiative, run in partnership with the IoD. risks are and whether there is anything more the company can do to help keep them safe. He has more than a decade’s experience Refining NZ’s chief executive is a familiar working as a health and safety manager, face on site, and he likes to make sure the and says leadership and change in this area people know safety comes before profit. needs to be supported at the board table. Post has stopped workers in their tracks “I think in a few years directors will be much when he has seen someone taking on too more involved in this conversation. If it [the much risk, to make sure they rethink how new law] goes well, it will become a part and Graham Darlow they are doing a job and complete it safely. parcel of being a director.” Because of the nature of the work, the Hughes says directors should approach refinery has a lot of rules and processes. health and safety with the same mindset He says his management team has regardless of the industry they’re in. spent time ensuring that workers feel They need to drive a culture that takes comfortable reporting accidents and people’s health and safety seriously. near misses and talking about the issues. “From a director level, it is really important Although the company’s injury rate has they understand the concepts because dropped dramatically since 2007, it has they are the ones who are going to inched up recently and Post says the David Jackson ask the questions of management.” safety message is a constant journey. Board evaluation done better Best practice boards commit to evaluation for continuous improvement.

BetterBoards is an online evaluation tool that helps boards identify their strengths and weaknesses, assess their performance, and determine opportunities to become better at what they do.

It is simple to set-up, easy to use, and accessible across mobile web platforms. The evaluation reports are comprehensive, easy to follow, and accompanied by an overview to assist the chair in leading post-evaluation discussions.

Additionally, boards can choose to have an IoD facilitated discussion to explore the board’s current situation and determine future direction.

BetterBoards is the only board evaluation tool that shows how your board is performing against the IoD’s comprehensive reference guide for directors, the Four Pillars of Governance Best Practice.

Contact us at [email protected] or phone us on 04 499 0076 to talk about your board evaluation needs.

simple set-up accessible comprehensive

For further information www.iod.org.nz IOD13713 BOARDROOM | 25

Board evaluation Chairman David Jackson says it is also different to other parts of the company, HEALTH AND SAFETY CHECKLIST important for him and the board to go on and that being a high hazard industry Health and safety is an important these safety walks, to talk to the workers was no excuse for a higher injury rate. part of governance and directors and get a feel for the risks in the business. will have a personal obligation of Until then, Darlow says management due diligence in this area when law done better “Any culture emanates from the viewed the construction business as reforms come into effect next year. top, you won’t make change unless inherently more risky – therefore an excuse Best practice boards commit to evaluation your CEO and board are in sync in for having a higher rate of injuries. He Here are some steps directors need to take: for continuous improvement. terms of thinking and focus.” says the board’s challenge helped change • be proactive his mindset, and the board has held • understand where the health and safety He is also on the boards of Fonterra management accountable ever since. risks are and Nuplex, and is a former director • be informed and ensure the company of Pumpkin Patch. But when it comes Darlow says his reports to the board BetterBoards is an online evaluation meets its obligations, for example do to building a health and safety culture, cover both employee and contractor site visits and really get to know the tool that helps boards identify their Jackson says it is irrelevant what the safety, and his performance is judged business strengths and weaknesses, assess industry is and that safety should on the safety record of both groups. • ensure that there are risk management their performance, and determine be top of mind in every business. and worker participation practices in BRING OUT THE AWARDS opportunities to become better at “Every board I’m on now is focused on place Forestry services company PF Olsen what they do. safety, but it wasn’t like that five years ago.” • be more involved with health and safety makes sure it rewards good health and risks, trends, audits, investigations and He says directors should insist on safety practice among its forestry crews. It is simple to set-up, easy to use, cultural information. managers creating a culture where The company’s injury rate is half that and accessible across mobile web workers feel comfortable reporting near of the national average, although chief WHAT DO YOU KNOW ABOUT platforms. The evaluation reports misses, because that is how they will executive Peter Clark says that is nothing HEALTH AND SAFETY? are comprehensive, easy to follow, be able to prevent further accidents. to brag about compared to considerably The IoD has developed a range of and accompanied by an overview lower international benchmarks. resources to help directors bring about ACCIDENTS WAITING TO HAPPEN a positive health and safety culture to assist the chair in leading He says it has been challenging building That’s an area Fletcher Construction in the workplace. These include: post-evaluation discussions. a health and safety culture among crews has been working on – to get workers, • the interactive Health and Safety Online that contract for the company, given the including contractors, to tell their manager Module detailing the changing health Additionally, boards can choose to workforce has a high turnover. The company when something nearly went wrong. and safety governance landscape and have an IoD facilitated discussion to has up to 1,500 contractors and employees recent case studies. To register, visit Chief executive Graham Darlow says the of contractors working on its sites. explore the board’s current situation www.iod.org.nz business’s injury rate has dropped by 90 per and determine future direction. “In New Zealand we have a young gun • The Good Governance Practices Guideline cent in the past six years, in direct relation risk-taking culture in our people. The for Managing Health and Safety to the increase in near-miss reporting. BetterBoards is the only board more you can involve and talk to and Risks produced in partnership with evaluation tool that shows how Considering the business is involved empower the workers, the better…it the Ministry of Business, Innovation your board is performing against in repairing 80,000 earthquake- really is about a management style.” and Employment (MBIE). There is an damaged Christchurch homes and executive summary version, Managing the IoD’s comprehensive reference He says PF Olsen sets very clear has engaged about 8,000 sub- health and safety risks, and guidelines guide for directors, the Four Pillars expectations and rules with its contractors, that is no mean feat. for SMEs, The Health and Safety contractors and actively supports of Governance Best Practice. Leadership Guide “Near-miss reporting has been a really them to train their employees in best • for an overview of the changing big part of our improvement. We practice in health and safety. legislation and the implications for Contact us at make sure we investigate near-hits The company holds events to reward directors, see the directorsbrief on [email protected] as seriously as we would if somebody forestry crews that uphold the safety health and safety produced by the IoD’s or phone us on 04 499 0076 had been hurt,” says Darlow. standards. Governance Leadership Centre. to talk about your board He says management has had to work • discussion of the Health and Safety He says directors need to determine evaluation needs. hard to overcome workers’ fears that Reform Bill has featured in the past two whether management is proactive reporting near-misses would result in editions of boardroom. or not, and take appropriate action retribution of some kind, whether it was to ensure safety comes first. All information is available to from their boss or losing face with co- members on www.iod.org.nz simple set-up accessible comprehensive workers. The business instigated a series “Boards need to get on the shop floor and of initiatives that included workers in see and talk to the workers themselves. the change, and rewarded reporting. Ask questions about health and safety.”

The first hint of change came from the board when they said the business’s For further information injury rate and approach should be no www.iod.org.nz IOD13713 26 | BOARDROOM

IN FOCUS

In the eye of the storm Sir Maarten Wevers talks to boardroom about a career that has never been too far away from the heart of political action. By Katherine Robinson

When Sir Maarten started work as private It has been a challenging year, and secretary for David Lange in 1985, he one in which he has had to publicly “Having a sense of was told by a long-serving aide that, acknowledge mistakes made by the confidence and purpose “The job of the staff who are closest to commission in handling the aftermath is really important as is the Prime Minister is to create ‘a pool of New Zealand’s most devastating of tranquillity’ around him because no natural disaster. While he says that a willingness to always minister can make decisions if there there is still room for improvement, search for something is arguing and staff are in a flap.” he points to the extraordinary pressures the commission has been better. Accepting the Calmness in a crisis is something that Sir working under since February 2011. Maarten has reputedly perfected in his status quo is not really long career as a diplomat and a senior “It is an organisation that has experienced the space that any public servant. A cool head and an ability enormous growth under tremendous to bring people and agencies together are pressure. There were 22 staff before chair should be in” qualities that have led him into some of the quakes – at its peak EQC had over “With over 120,000 homes damaged in the public sector’s most demanding roles. 1600 staff. The scale of the damage from the quakes has meant that we the Canterbury quakes, it was properly This included the position of Chief have undertaken a whole range of agreed that cash settlements alone were Executive of the Department of the Prime functions that were never envisaged not going to work in Christchurch. The EQC Minister and Cabinet (DPMC), where he in our legislation.” put its hand up and said it could take on worked first for Helen Clark and then John the role of co-ordinating the repairs. More Up until the Canterbury earthquakes, Key. After eight years in the role, he left in than 70,000 went into the Canterbury the EQC operated as a cash settlement 2012, vowing to play more golf. Instead, he Home Repair Programme, run by EQC, and organisation. was rapidly enlisted to head the inquiry managed on our behalf by Fletchers. into the Department of Education’s faulty “If there had been a flood or other natural “It was a role that had never been Novopay payroll system before taking events, its role was to assess damage envisaged or properly prepared for, up the role of chair of the Earthquake and write a cheque, but it would be your bringing with it the challenge of dealing Commission (EQC) in August 2013. job to fix it. with customers and contractors.” BOARDROOM | 27 28 | BOARDROOM

Nevertheless, he says that the commission “You may have a good and the Government as New Zealand’s has co-ordinated repairs on 60,000 elected representatives,” he says. homes in Canterbury to date. department, fabulous “The standards that you set yourself and A former New Zealand ambassador to staff or the latest your staff have to be the highest. And you Japan, Sir Maarten made a poignant visit technology but if the are working with an enormously wide to Sendai, the city near the coast laid canvas because every issue that comes waste by the 2011 earthquake and tsunami. governance is not well onto the Prime Minister’s plate is something He reported that “people over there were designed or it does that you are expected to foresee, manage very impressed at how comprehensive and provide advice on. I would often say to and universal the EQC coverage was. They not have the right staff that there is no rule that says you only have nobody doing the repair programme balance between have one issue at a time or that they will in Japan. Everybody is left to his or her come neatly packaged. It is a 24/7 role.” own devices because it’s a cash settlement strategy, oversight And a role in which Sir Maarten stresses process. There’s no other option. So it’s and risk management, there is no room for political bias. He going to take a long, long time to fix there. then the organisation has worked for three very different “Thanks to the build-up of the National Prime Ministers – David Lange, Helen Disaster Fund to $6.5billion, and the will not flourish.” Clark and John Key – and served them re-insurance we procured, the EQC’s with a public servant’s impartiality. direction but still be able to draw on insurance liabilities for residential the talents of board members. “Your job is to get the best policy advice customers arising from Canterbury, to the Prime Minister or ministers in the of about $12bn, will be met without “One of the things that I learned from DPMC best way you can and in a free, frank, direct impact on the Crown balance was that if you are in a leadership position, and fearless manner. It is not your job sheet. That is probably unique the level of expectation towards you is to make the decision or to second- globally for a disaster of this scale. The quite different. You have to fulfil that sense guess ministers. If you don’t understand system has prevented a really big of expectation and be the leader of that that right down to every sinew in your additional fiscal shock to the nation. group by leading in a way that allows others body, then you are in the wrong job.” to follow. Having a sense of confidence “Having the EQC is much better than and purpose is really important, as is a This impartiality, he says, is a precious not having the EQC. Can the EQC be willingness to always search for something commodity, because without it you will improved? Of course. We have taken lots better. Accepting the status quo is not erode public trust in an elected government. of learnings from both Christchurch and really the space that any chair should be in.” from the Cook Strait quakes on how we “It’s also vital to the success of the private can ensure that we are better placed to And what does he think makes a good board? sector. It would be very difficult to find deal with another large scale event.” successful private sector firms based in “It is really important to have a diverse set of countries that do not have good respect skills and an open supportive environment CHANGING GEARS for the law or where there are capricious that allows you to you search to get the best In his long career, Sir Maarten was chair decisions by bureaucrats,” he says. decision. I think a board should be able of the APEC Senior Officials’ Meeting and to cope with a bit of dissonance without Instances where public servants have General Manager, Government Business, compromising the respect of the directors. brought their political views to work are New Zealand Post. His appointment You should always be able to ask awkward rare in New Zealand, but any taint of as chair of the EQC is his first major questions and if you don’t get the right partiality brings media scrutiny. Does he governance role after years as a chief answers then you should ask them again.” think that the fish bowl existence of a senior executive. How does he find the shift public servant calls for different qualities from management to governance? Governance is one of his passions, an in its leaders to private sector leaders? interest triggered from student days and a “I take pains to not think and act like a chief degree in economics, and honed by years “A lot of those leadership qualities are very executive. I did the IoD’s Chairing the Board working so close to Cabinet (which he likens transportable between sectors. There is a course recently, which was very valuable. to the board of New Zealand) in the DPMC. different emphasis in the public sector and The legal and behavioural expectations of a different challenges. Public sector leaders chair are quite clear and specific. The EQC WORKING ON A WIDE CANVAS don’t usually have share prices to worry has been through a very large, ongoing “The DPMC is a very small agency but about but as a public sector leader, you challenge so you need to know the basis things have to be really well managed. If need to demonstrate really strong personal that you are expected to operate as a chair.” something goes wrong, the implications qualities around integrity, professionalism, A good chair, he says, is someone are potentially very serious because it is and an understanding of your place in who can exercise leadership and all about support for the Prime Minister our democratic system of government. BOARDROOM | 29

“It would be very difficult “There is a governance aspect to Sir Maarten Wevers was Private Secretary to everything that we do and I support Prime Minister, the Right Hon David Lange, to find successful private the IoD’s mission to raise governance High Commissioner to Papua New Guinea, sector firms based in standards. I find it difficult to imagine a and Ambassador to Japan. Sir Maarten company or a government department was also the Chair of the APEC Senior countries that do not or a country that would be successful Officials’ Meeting, and General Manager, have good respect for in the absence of good governance. Government Business, New Zealand Post. He served most recently as Chief Executive “You may have a good department, the law or where there of the Department of the Prime Minister fabulous staff or the latest technology and Cabinet from 2004 to 2012. In 2012 are capricious decisions but if the governance is not well designed he was appointed Knight Companion or it does not have the right balance by bureaucrats” of the New Zealand Order of Merit. between strategy, oversight and risk “A lot of the work in the public sector management, then the organisation will is about delivery of a service to the not flourish. It is a critical component public. You need to be resilient, to take of institutional success, commercial a tough call when you need to and be success and public policy success. able to deal with pressures that arise “You can see the impact of good in public domains. And you should not governance very clearly.” respond to those pressures publicly because that is the role of ministers.”

Acute awareness of the need for good governance led Sir Maarten to join the IoD’s Wellington branch committee this year.

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OPINION

A pathway to experience The primary sector has long had a history of co-operatives or supplier ownership and control, and logically so. Ownership and control is exercised by supplying shareholders through democratic election. Directors are often elected by supporting a cause or movement, or by having a particular philosophy, rather than for their skillsets or experience in governance. Eoin Garden asks whether good governance is being compromised by this process and how it can be improved

Farmers –and, I’m sure, shareholders in having acquired knowledge and • our primary sector must continually most co-operatives – strongly defend understanding of how one should strive for better governance models the elective model and argue that exercise judgment in fulfilling the • on its own, the co-operative newly elected (albeit inexperienced) responsibilities of being a good director. democratic election process does not directors will quickly become effective, deliver the skillsets and balance, let Wisdom, an attribute that we afford those because at least they understand and alone experience, needed for great who show good leadership and have can represent their fellow shareholders governance the ability to consistently make sound well. Most directors, whether in the • the 70-20-10 rule, rating experience as judgments, has its roots in experience. corporate or co-operative sector, would the single most important contributor to In simple terms, it is the rationalising of claim to be part of good governance great governance, was accepted experiences from the past – both good • we need to generate engagement and models - but what does good look like? and bad – and applying the lessons to discussion about good governance the present and the future. Borrowed Matt Stanley of Propero Consulting among co-operative shareholders on a experiences from leaders we respect says development of governance pan-industry basis. Cross-fertilisation can also contribute to our own wisdom. expertise needs to follow the 70-20-10 will raise the bar further than single But whatever the source, experience rule. As a rule of thumb, 70 per cent comes company initiatives continually reveals itself as being the major through real-life governance and business • there is a real need to collectively create component of successful governance. experience, 20 per cent from learning a pool of experienced directors across through relationships (mentoring, the sector from which shareholders can FROM GOOD TO GREAT coaching, and learning from others elect good governors To be internationally competitive, our primary within a board culture of trust and • engagement with and participation from sector enterprises need to continually integrity), and 10 per cent through other co-operatives needs to be sought. strive to improve. The co-operatives targeted training programmes. • there is a wide range of leadership are the benchmark by which public and development and governance training For co-operatives, that is a sobering private businesses measure their own providers, and that a proliferation of conclusion. Indeed, any board depends performances, and this is one of the main such programmes is not warranted on the electoral cycle and democratic intrinsic values all producers benefit from unless a specific need is identified. process to deliver good governance is in a truly competitive environment where at a huge disadvantage. Nowadays, our co-operatives operate. It is all the more PART OF THE CHALLENGE co-operative boards are full of directors important that co-operative governance We cannot escape the challenge of having who have degrees in commerce, marketing, shifts from good to great. That shift has inexperienced directors coming to the science and the like, but very few have the to begin at the top – at governance level. board table. In the past it was accepted most important competency of all – At a recently convened meeting of as the board’s responsibility to invest governance experience. chairmen and representatives of five of in their training, and by the end of the For the purpose of this discussion, the major primary sector co-operatives, first term of office, with the benefit of experience could be defined as the following conclusions were tabled: three years, participation, a recently BOARDROOM | 31

elected director would be contributing this model by offering appointments to fully. There are problems with that view. promising potential directors across a range of participating boards. They could First, in the second electoral cycle, serve a one-year term on each board, the director may not be successful and the investment will have been of little including time on non-cooperative boards. value. In some cases, new and inexperienced The pathway to experience over a directors could make up one third of the three-year timeframe should include a elected directors at the table. The board commitment by individuals to participate simply cannot function as a great board with in a range of the very good leadership so much inexperience around the table. development and targeted training

programmes which already exist. Mentoring Eoin Garden PART OF THE SOLUTION by senior directors would be provided. Experience will deliver the greatest Eoin Garden was on the board outcome so maybe we should kick In the final analysis, however, the electorate of Silver Fern Farms for 14 years, some of the existing prejudices to is going to decide who sits around the including six years as chair. touch – mine included. We should think table. But what we need to achieve is a During that time he oversaw the in terms of ‘a pathway to experience’. range of experienced candidates who are transition from a representational confident in fronting up to the electors, Co-operatives in the sector need to to a skills-based model. with the conviction that when they are proactively engage with, individuals to first elected, they can truly make a He had established a range plan for the future and begin to invest in of farming businesses in the themselves. In return, they should be positive difference to their co-operative. livestock and forestry sectors, supported along that pathway with financial The corporate sector might simply consider and represented farmers and support and opportunities that make them this the ongoing challenge for the the rural sectors at provincial attractive to many more companies as future co-operative model, and one which could and national levels before directors. Within the rural sector, many young be avoided to a large degree with greater taking up governance roles. businessmen and women decide to get their control over the boardroom appointment own businesses in order before considering process. However, while the problem governance roles. If they were to be supported is peculiar to co-operatives, the wider on a pathway with fewer responsibilities challenge for great governance in the and less commitment, we would be able primary sector is not. to develop that pool of experience. As Director Development facilitator Richard The IoD has already developed programmes Westlake of Westlake Consulting points in this area. The Emerging (or Aspiring) out, the sector is of such importance Director Awards have a long history of to the wider economy that we now see developing new directors and mentoring any of these awards include an apprentice a growing equity investment platform or observer role on a board. Mentoring developing in the primary sector. “This will by senior directors is often provided. require more experienced governors – but where are they going to come from?” The IoD has also provided support for the Future Directors programme. In this There is a strong case for initiatives initiative, talented potential directors such as the Aspiring Director Awards apply to sit on a board for a year. They and Future Directors programme to are encouraged to take part in board be an integral part of New Zealand discussions but are not able to vote. I corporate and co-operative governance would suggest that co-operatives adapt to develop a Pathway to Experience. 32 | BOARDROOM Keeping up with the play on continuous disclosure The continuous disclosure regime is a mainstay of our securities markets law, so it is important that directors and management keep up with the game and avoid the referee’s whistle. By Josh Blakemore BOARDROOM | 33

The central requirement of the NZX Listing disclosure (and to periodic disclosure – for Rules and the Securities Markets Act example, annual reports) with a view to the 1988 remains unchanged – once a listed possibility of a capital raising at some stage. company becomes aware of any material For example, some issuers may wish information or misinformation concerning to update the market on key notes and it or its securities, it must immediately drivers in their annual reports more inform the market through a statement explicitly than they currently do – not to the NZX, unless an exception applies. because they are required to, but so that But a series of developments either potential future investors under a same Josh Blackmore already in play or on the immediate class offer can have ready access to an horizon make it a good time to revisit how up-to-date overview of those matters. ASIC has just released a note on its market disclosure works. These are: assessment of market practice around • the new Financial Markets Conduct Act THE NZX NEW MARKET the handling of sensitive information 2013 (FMCA) In recognition of the high compliance costs in the context of analyst and investor • the NZX New Market proposal for early associated with continuous disclosure, briefings prior to corporate transactions. stage companies, and the NZX is proposing a “continuous Risk areas identified by ASIC include: • guidance from the Australian Securities disclosure-lite” option for small and • the smaller, less structured and more and Investments Commission (ASIC) on medium-sized companies that choose interactive briefing investor briefings and market soundings. to list on the NZX’s mooted New Market. • analysts with a poor understanding of the boundaries seeking to elicit market FMCA CHANGES At the time of writing, the necessary sensitive information, and The key change in the FMCA is a shift in exemption from the Securities Markets • issuers not being careful to ensure that regulatory focus from one-off or point Act had been granted, subject to the the staff who front briefings have a clear of sale disclosure to ongoing disclosure. Financial Markets Authority (FMA) being understanding of the relevant issues and The most significant development in this satisfied with the design of the regime. of the limits on what should and should regard for listed issuers is the ‘same class The NZX is recommending that not be disclosed. offers’ exemption, which has been in force disclosure be limited to: since 1 April this year. Where companies • interim updates required on the ASIC has also expressed some concern at choose to take advantage of this facility, occurrence of specified events, and an over-reliance on advisers to manage directors will not automatically be deemed • an obligation to correct market risks (rather than the issuer having its liable if there is defective disclosure. information that is misleading and own policies) in relation to the informal market soundings that sometimes occur The exemption allows a listed issuer to credibly sourced. prior to a transaction being announced offer equity or debt securities of the We think the triggers for issuing interim or a trading halt being sought. same class as those already available updates are appropriate and, for the in the market with limited supporting most part, will be events issuers ASIC recommends that issuers: documentation. Instead a ‘cleansing would need to disclose to manage • prepare in advance for leaks by drawing notice’ must be sent to the NZX confirming transactions in the ordinary course. up draft requests for trading halts and that the issuer is in compliance with draft exchange announcements its financial reporting and continuous Our experience suggests that issuers • discuss frankly with advisers if and when disclosure requirements, as the main are willing compliers with continuous soundings should be conducted about a precondition to use the new mechanism. disclosure obligations, but that compliance capital raising (and how many investors often requires a number of difficult may need to be sounded), and In effect, any issuer wanting to use it will judgement calls which chew up the • consider using trading halts to need to have due diligence processes time and energy of management and manage the risks associated with in place which give them a high level of directors, and can give rise to significant soundings (presumably where these assurance in the quality of their ongoing external advisor costs. Any relief from cannot be completed between market disclosures. Issuers will not want these, within appropriate parameters to market close and open). to make a flurry of disclosures immediately protect the investor, is to be welcomed. prior to launching a same class offer It seems unlikely that trading halts prior as this would be an indication that the to informal soundings will be particularly ASIC GUIDANCE ON INVESTOR issuer lacked confidence in its ongoing attractive as, in the event that the offer BRIEFINGS AND MARKET SOUNDINGS compliance with the disclosure rules. doesn’t proceed, the issuer will have some An aspect of market disclosure that has potentially awkward explanations to make. Of course, issuers will want to ensure attracted some regulatory attention that they are in compliance with their in Australia is the management of Josh Blackmore is a partner at Chapman continuous disclosure obligations in any interactions between an issuer and Tripp specialising in commercial event. However, they may also want to particular classes of market participants transactions and securities law. review their approach to continuous (as opposed to the market generally). The Maverick Settee by Kovacs Photographed at Beauty at the Tannery; model dressed by Redhouse Boutique; The Tannery, 3 Garlands Road, Woolston The Maverick Settee by Kovacs Photographed at Beauty at the Tannery; model dressed by Redhouse Boutique; The Tannery, 3 Garlands Road, Woolston 36 | BOARDROOM

How to be an IPO rock star With the dark days of the late-Noughties behind us, New Zealand is clearly revelling in its rock star economy label, says Ian Thursfield

In the years after the global Analysts and investors are now financial crisis, the aggregate used to the look and feel of PFI market capitalisation of delistings and there are numerous examples exceeded that of IPOs. But times of what should be included in the have changed – over $4.0 billion was financial information. PFI has in a invested in seven IPO companies sense become a “boiler plate”. Given in 2013 and a further eight or so this base, pro forma, non-GAAP IPOs have either been completed financial measures and sensitivity or are expected in 2014. analysis are increasingly being used to help inform potential investors Recent IPOs have exhibited a variety and analysts about the business. of – sometimes novel – facets: • the timing of the bookbuild is now WHAT IS PFI AND IS fluid – front end (Metroglass), back end (Z Energy), or middle IT STILL USEFUL? (Gentrack) The use of PFI in prospectuses, • compliance listings – GeoOp had although not mandatory, is well a capital raising followed by a established. There have been compliance listing (without PFI, questions raised in relation to the but more on that later), a process usefulness of PFI in a start-up or fast- that Pushpay is rumoured to be growing environment. Specifically, following in a world where valuation has • the separation of the investment become detached from PE multiples statement and the prospectus and dividend yields, does PFI help of Genesis becoming the “new explain and sell the company? normal”; and I believe that even in this situation, • the emergence of a number of PFI is helpful. Preparing and early stage IPOs, for example, presenting PFI means the company Xero and ikeGPS, as well as offers has to explain and rationalise the of mature businesses (Z Energy; base case to investors, and gives Meridian; Genesis). them an understanding of the various These trends are interesting but there drivers of performance. As important, have also been changes in the content including PFI shows that the of offer documents driven by the governance of the company is in good need for clear marketing messages hands; PFI is driven off budgeting and the impact these can have on processes and is reported against the launch of an IPO. This is where in future periods. Good budgeting the use of some modern prospective protocols are more important for financial information (PFI), non-GAAP cash-hungry, fast-growing tech and pro forma reporting comes in. businesses than they are for mature BOARDROOM | 37

Ian Thursfield cash-positive ones. Fundamentally, should are largely additional subtotal lines in within the business, but perhaps more you invest in a company whose budget is the financial statements and are easily importantly, they need to understand considered by directors to be potentially recognisable by the investor community. how best to illustrate this without giving misleading and hence, not profitable? However what is new on the scene and has away commercially sensitive information. recently been given additional prominence WHAT ARE PRO FORMA ADJUSTMENTS (although not “undue prominence”, as CONCLUSION AND HOW SHOULD THEY BE APPLIED? this will put you on the wrong side of The role of a director is perhaps at its most Pro forma adjustments are made to the the FMA) are alternative non-GAAP and visible when a company plans to list on statutory historical information and/or non-financial measures, for instance, a stock exchange. With over $60 million the PFI, and reset the capital structure annualised recurring revenue, customer a week in contributions into Kiwisaver in of the company to both reflect the post- numbers, EBIT before non-operating 2014 and strong economic growth, New IPO structure, for example, share capital costs, and revenue per employee. Zealand may be entering a sustained repaying bank debt, and remove the impact period of IPO activity. A director’s job at These alternative measures can be used of historical capital transactions, such as this time is to present information that to guide an analyst or potential investor purchase of a business. For instance, for gives potential shareholders adequate to metrics that are used internally by the Gentrack IPO, Gentrack re-presented information to make an educated decision the business and best represent the the historical financial information as if the as to whether to invest while also allowing operations and value drivers of the IPO and capital raising had occurred one the marketing messages appropriate company. These must not be misleading day before the start of the historical period. space. Among the questions directors and should be both measurable should ask are: do we really need pro Pro forma adjustments should not be (think verification) and reportable. formas? Are we using the correct non- used to remove bad news stories from GAAP measures? Are our sensitivities historical trading or show an unbalanced SENSITIVITIES AND THEIR USE specific enough to show likely volatility? view (taking out costs but leaving in Sensitivities have become commonplace revenues). The FMA takes a dim view of to allow investors sufficient information Hopefully with these questions companies that try to hide items such to assess the importance of certain running through directors’ minds, as redundancy costs within pro forma assumptions underlying the PFI. In the investing public can be helped adjustments. While pro forma adjustments general, sensitivities are confined to to make sensible decisions. have become the norm, in fact a director revenue-based changes (some variant of Ian Thursfield – KPMG Partner in Charge should be questioning whether pro forma price or volume) and movements in FX. of Transactions & Restructuring information is really required – it is cleaner Recently, sensitivities over input pricing Ian heads the Transaction Services and simpler to show statutory performance. have become a minor trend with Meridian, team in New Zealand and has advised Genesis and Z Energy all including this on numerous due diligence assignments NON-GAAP MEASURES as a key sensitivity. Sensitivities can help both in New Zealand and internationally In the world of non-GAAP financial explain post-IPO performance relative to across all market segments. He has 15 information, there are measures PFI published in the offer document, which years’ experience in due diligence and that fall into two broad categories: can be comforting to directors if actual independent appraisals. traditional and alternative. results undershoot the prospectus. In The traditional non-GAAP measures, for selecting sensitivities, directors need example, EBITDA, EBITDAF and NPATA, to determine the key drivers of volatility 38 | BOARDROOM

The changing landscape of environmental liability According to Marsh’s latest Directors’ Risk Survey, directors rate environmental risk as number five of the top ten emerging risks facing directors. Interestingly, climate change follows at number seven. By Karin Scholz

The last few years has seen the tightening accountants and risk managers increasingly years, or have occurred under previous of legislation, increased efforts to enforce have to factor into their models to mitigate regimes where regulatory standards were the local Resource Management Act (RMA) or avoid large scale irreversible disasters. lower and reckless lending was common. and, patterned after the United States, very Consequently, pollution is commonly an broad environmental laws being passed UNDERSTANDING YOUR RISK unknown quantity for decision makers. in Europe, Asia and Australia. Companies One can be forgiven for thinking that This is in the context of both avoiding and their directors and officers are at a director’s exposure to pollution risk pollution altogether and avoiding increasing risk of facing criminal allegations, is low if company activities are not exacerbation of any known pollution. with serious financial penalties for not mining, manufacturing or the handling Basic proactive risk management properly addressing environmental issues. of toxic waste. Unfortunately it is not so protocol would consist of the following: straightforward, with the reality being • identify pollution and the potential for WHAT KIND OF ENVIRONMENTAL that even indirect association with pollution RISK IS THERE? pollution can attract considerable negative • develop solutions for the removal or Risk can loosely be placed into five main attention. Some examples of this follow: mitigation of pollution conditions categories relating to an entity or individual: • environmental impairment of property • implement an environmental • Contractual (entity): contracts will have can destroy a financial institution’s management system indemnity and insurance clauses that do primary and secondary source of • establish a process that keeps not overtly address pollution risk, but repayment. Even worse, it may attach the organisation up-to-date on all the inherent obligation exists. directly to the financial institution if it developments in environmental • Third party/civil (entity): an affected becomes associated with the secured regulations and laws party outside of contract. real estate interest as either title holder • conduct periodic environmental • Regulatory (entity): compliance with or manager of the property compliance audits legislation, both locally and globally. • all aspects of construction and • ensure that environment-related record- • First party (entity): onsite pollution is development and manufacturing are keeping and documentation is easily usually considered intangible damage at risk in the course of demolishing retrievable and not scattered throughout and does not trigger a material damage/ toxic buildings or exposing legacy soil the organisation business interruption policy. and water • coordinate and effectively communicate • Directors risk (individual): • investment in properties; either directly environmental activities throughout the responsibility for the action, or lack by way of subsidiaries or indirectly by organisation, since environmental risk is of action, taken in respect of pollution way of joint ventures or alliances. Real estate and certain activities on owned or rarely controlled by one department. when in a position of authority on leased real estate can be viewed as both a board. Unless a concerted effort is made to identify an asset and a latent liability contamination in the first instance, risk Any one of the above can bring a business • professional services provided, such management and due diligence processes to a standstill and can significantly as design or conveyancing, can cannot be considered robust or adequate. influence an organisation’s financial lead to pollution or the purchase of performance, reputation and brand, contaminated property OFFSHORE RISK FOCUS cash flow and shareholder value. • merger and acquisition decision-making Never assume New Zealand law applies needs to incorporate due consideration Given the potential for interdependent offshore. The implications of compulsory of the implications of pollution. The cost biological systems to be impacted by insurance requirements in foreign of remediation can be a deal breaker. natural disasters and climate change, jurisdictions are ever-increasing. So too is an understanding of environmental The insidious nature of pollution is such the complexity and risk as regulators drive systemic risk is something governments, that it can take place unnoticed for many to enforce the provisions within the law BOARDROOM | 39

Karin Scholz

that allow them to more directly recover remediation costs from individuals. In some territories, the commercial environment is such that it is foolhardy to trade without the protection of robust insurance in force as allegations of pollution can be hefty tools.

Recent case law in Canada (Northstar Areospace) raises another concern in that it is conceivable that any director could be held personally responsible for clean-up costs. Multinational businesses need to cast a critical eye on their multinational insurance programmes. CASE HISTORIES

DIRECTORS AND OFFICERS MUST • On October 28, 2013, 12 former directors and officers of bankrupt Northstar PROTECT THEMSELVES Aerospace agreed to pay a total of CAN $4.75 million to the Ontario Directors and officers need to be duly environmental regulator for costs to clean up the company’s manufacturing site. diligent and ensure that they: • On February 2, 2014 a broken stormwater pipe beneath a coal ash pond at Dan • identify and understand the significant River Steam Station in the United States allowed 39,000 tons of coal ash and 27 corporate environmental liabilities million gallons of contaminated water to spill into the Dan River. On May 21, 2014, • identify and understand any potential two shareholders filed a derivative lawsuit against the company’s CEO, COO, and personal environmental liabilities 14 of the company’s current directors. • establish processes to ensure liabilities • The Chinese Government has punished 33 multinational corporations over the are addressed and monitored past three years for violating the nation’s environmental laws and regulations, • understand how environmental according to the Worldwatch Institute. liabilities will be funded, reserved and • The Australian Government secured a legally enforceable AU $305,000 pledge financially assured from plantation timber company Hancock Victorian Plantations Pty Ltd to repair • keep diligent records of the board of damage done to a critically endangered grassland in southwestern Victoria and directors’ oversight. to better protect what remains. It is also critical for directors and officers to understand the insurance programmes Natural disasters and the exacerbation of liability of the organisations they serve, including Environmental damage can be caused by a natural disaster. Fires, floods and any coverage gaps and additional coverage earthquakes can have a disastrous impact on infrastructure, water tables and soil available in the market. They should quality, e.g. discharge from treatment plants or landfill, leaching of toxic materials from also obtain appropriate legal advice. industry or agribusiness, or mould infestation from prolonged exposure to moisture. To find out more about environmental Notably, pollution from these sources can migrate onto neighboring sites. The risks contact Karin Scholz on obligation to clean up still exists regardless of remedies for recourse available. 09 928 3102 or [email protected]. 40 | BOARDROOM How do you grow CPD points? CASE STUDIES Satisfying the Chartered Director programme’s continuing professional development (CPD) requirement for the core membership categories NORAH BARLOW AARON RINK Eligible under transition for: Eligible under transition for: can be achieved through both Chartered Member Chartered Member formal and informal learning. Five IoD members share their Summerset Group Holdings director A plumber by trade, CF Reese Group Norah Barlow believes currency of director Aaron Rink enlisted the help of a recent history of professional knowledge is crucial to performing board to grow his company. He is now part development to illustrate how effectively, “particularly for me, being of the IoD’s FirstBoards group and shared points will be accumulated new at being a director in multiple his experience in moving to a full board at under the new system. companies with different business models the recent Undressing Governance seminar. and different norms for the board.” Aaron has completed the CDC, Chairing By Breanna Cullen Norah completed the Company Directors’ the Board and Boards in Action, and has A commitment by members to CPD is an Course (CDC) in 2011, attends branch this year undertaken Strategy Essentials. important part of the professionalisation functions, has spoken at branch events, “I find the courses are a great way to of the IoD. To be included in one of the and reads boardroom regularly. She is gain targeted governance learning core membership categories (Member, also a member of Chartered Accountants and also a way of re-energising myself Chartered Member and Chartered Australia and New Zealand (formerly and reconnecting with best practice Fellow), you will need to maintain 60 CPD the New Zealand Institute of Chartered in the governance sector,” he says. points over a rolling three-year period. Accountants), enabling her to cross-credit accountancy courses such as Audit and Aaron is a frequent face at branch events “CPD is already routine practice for many Risk Committees. Norah does not set a in Waikato, and made the trip to Auckland of our members, both as part of making budget aside for professional development, for the 2014 IoD Leadership Conference sure they are effective directors and as a but consults course calendars when in April. He reads boardroom and a requirement of other professional bodies planning her development for the year. host of governance articles, as well as to which they belong,” says Lisa Docherty, keeping tabs on the IoD’s LinkedIn group. Registrar. “For most of our members, CPD Points* meeting the CPD requirement will simply Two of the boards Aaron now serves on be an acknowledgement of their long- Reading: 10 have a dedicated budget for professional standing commitment to the profession.” development, and he plans his according 10 to which skills he will need each year. You can gain CPD points through formal Presentations: channels such as Director Development or 4 CPD Points* relevant courses offered by other providers. Branch events: But since professional development is Reading: 10 Chartered Accountants 4 not restricted to formal training, points ANZ course may also be allocated to informal learning. Presentations: 10 Reading governance-related material, for Total: 28 instance, will earn up to ten points every FirstBoards: 5 year, and attending branch events will accrue two to four points per event. CPD Strategy Essentials: 8 points are also awarded for governance- related presentations or mentoring. Conference: 12 For a full list of how CPD points 10 will be allocated after 1 October, Branch events: visit www.iod.org.nz. Total: 55 BOARDROOM | 41

CASE STUDIES

SAM ROBINSON TIM FULTON JOHN PALMER Eligible under transition for: Eligible under transition for: Eligible under transition for: Chartered Fellow Member Chartered Fellow

AgResearch chairman Sam Robinson values Experienced in running his own companies, As an experienced chair and non- branch events as opportunities to learn Tim Fulton is stepping into the realm of executive director, John Palmer speaks from other directors. He regularly attends the professional director. Tim says that on governance at a range of events and those held in Hawke’s Bay and checks he needed to build a formal knowledge says he finds facilitating the IoD’s Chairing the IoD events calendar when travelling base in governance and undertook the the Board course a great way to stay to Wellington. Sam is a mentor in the CDC and Finance Essentials last year. current. John is involved in mentoring IoD’s Mentoring for Diversity programme through the IoD, and a number of “I found it hugely beneficial in structuring and also speaks at a variety of events. aspiring directors have benefited from governance principles that I now use He reads on governance matters in his experience. He attends two or three more and more in a practical sense, newspapers, online, and in boardroom. seminars a year across both Australia as I gain experience as a director.” and New Zealand, with specific interests Sam selects courses and branch events Tim attends branch events, reads in governance and remuneration. John according to whether they fit his needs. boardroom, and takes formal courses. He does not have a budget set aside for CPD, Through his position on the board of a budgets $2500 - $5000 for professional but accepts opportunities as they arise. Crown Research Institute, Sam is also able development each year, and plans his to undertake courses run by Treasury’s development according to what the year CPD Points* Commercial Operations (formerly COMU). ahead has in store for him. He is currently 15 undertaking a six-week programme Mentoring: CPD Points* that offers mentoring from an online Reading: 10 Mentoring: 15 international business development team.

Presentations: 10 Reading: 10 CPD Points*

Reading: 10 Events: 4 Presentations: 10

Branch events: 6 Total: 39 COMU course: 8

Third party course: 5 Branch events: 8 Total: 21 Total: 51

The CPD points above are estimates, All Director Development courses based on each member’s activity over undertaken in 2014 will count *PLEASE NOTE: the previous year, and indicate how for CPD points. After October 1, many points each member is likely branch events will be allocated to accumulate should the pattern between two and four points. of their participation continue. 42 | BOARDROOM

Director Development – plan your course

Professional development is key to keeping up in a MoU recognised with special fast-changing world. It offers the chance not only to gather rate for Governance Essentials new information, but also The IoD is pleased to offer members of Chartered of our membership also belong to Chartered to take time out and see Accountants Australia and New Zealand a special Accountants Australia and New Zealand, so it the world from a different discounted rate for the one-day Governance makes sense to work together for the benefit of perspective. Sharing the Essentials course. Undertaking this course both professions. Given the IoD’s expertise in learning experience with will also earn points under their continuing governance, it is logical that we assist members others not only deepens professional development programme. of Chartered Accountants Australia and New the learning process but Zealand to develop their governance skills.” widens networks. This offer is part of the memorandum of understanding signed between the IoD and Governance Essentials is designed to equip The IoD offers a portfolio the Chartered Accountants Australia and New senior executives and new or aspiring directors of courses designed to suit Zealand aimed at fostering a closer relationship with an understanding of the role and directors at all stages of and benefits for members of both organisations. responsibilities of a board and its directors. their careers. For more The one-day course covers board composition, details and to register, “We share a number of common interests, competencies and protocols, and examines visit www.iod.org.nz including financial reporting, financial a board’s relationship with management and literacy, corporate governance and financial its role in providing strategic guidance. management, and these offer fertile ground for collaboration,” says IoD CEO Dr William Whittaker. The partnership is ongoing, with further initiatives in the wings. “Financial acumen is a critical skill in governance and a large proportion of New Zealand directors For more information on Governance bring a background in chartered accounting Essentials, visit www.iod.org.nz to the board table. Approximately one quarter

Giving generously We are proud of the fact that over 50 per cent of IoD members sit on the board of one or more not-for-profits. This includes senior directors who want to give something back to the community as well as emerging directors who are learning the fundamentals of governance.

There are notable differences in the not-for-profit (NFP) sector which impact on the governance of these organisations. If you are new to governance, we recommend that you look at doing the one-day course, Not-for-Profit Governance Essentials. It offers an overview of the fundamentals of governance, while pinpointing those areas you need to know on a not-for-profit.

Wellington: 2 October Hamilton: 11 November BOARDROOM | 43

Company Directors’ Course The Company Directors’ Course is a week-long residential course that has been the bedrock of governance training for New Zealand directors for some years. It covers governance best practice, strategy, understanding finance, risk, a director’s legal obligations and board dynamics. One of the hallmarks of the course is its relevance to governance today Boards in Action as it draws on the talent and experience of facilitators who are – Advanced Health currently practising directors. and Safety We proudly show graduates of recent courses.

With the Health and Safety Reform Bill scheduled to be enacted in 2015, health and safety is currently very much in the minds of directors. This one-day workshop focusing on the emerging due diligence duties contained in the bill offers a rare chance for senior directors to sit down together, and explore the issues, in an atmosphere of trust. Discussions are expected to be lively, insightful and informative.

As with all Director Development courses, the Chatham House Rule applies.

Warren Larsen, chairman of CentrePort Ltd, and Mike Cosman, one of New Zealand’s most experienced health Wellington, June 2014 and safety practitioners, will be FRONT ROW: (Left to right) Anne Scragg, Zheng Li, Eileen Basher, jointly facilitating the Advanced George Tatham, David Rae, Robin Gunston, Kate Wareham SECOND ROW: Charles Duke, Martin Kirk, Donna Cooper, Brian Moriarty, Health and Safety workshop. Stephen Nicholas Wellington: 12 November THIRD ROW: Dean Spicer, Andrew Clayton, Andrew Morrison, Warren Larsen Zane Fulljames BACK ROW: Jamie Fitzgerald, Greg O’Byrne, Dean Galt, Chris Herlihy

Health and Safety Module – now online Eighty people have already registered for the online training module focusing on health and safety. Designed to familiarise directors and senior executives with best practice in this crucial area, the interactive module allows you to absorb information at your own pace.

Areas covered include the importance of health and Christchurch, July 2014 safety governance, changing legislation, duties FRONT ROW: (Left to right) Reuben Tucker, David Penrose, and due diligence, liabilities and penalties, and the Catherine Torrance, Fiona Kingsford, Richard Braae, role of the director in establishing and monitoring Steph O'Sullivan, Dave Braddock, Leigh Harris best practice. To register, visit www.iod.org.nz BACK ROW: Stephen Ambler, Paul Durdin, Richard Moore, John Benn, Nathan Clarke, David Benham, Scott Thomson 44 | BOARDROOM

Board Services

A breath of fresh air Improving the respiratory health of New Zealanders is the mission of Asthma Foundation, a charity that takes a professional approach to achieving this goal

“Since the global financial crisis, like other the world. And it can be fatal – around 50 charities, the greatest challenge has New Zealanders die of the disease every

Angela Francis been achieving long-term sustainable year. As respiratory diseases are more funding,” says Angela Francis, Chief likely to strike both the very young and Executive of the Asthma Foundation. the very old we are almost expecting a further rise in the numbers of people with “We don’t receive government funding of chronic obstructive pulmonary disease for our work so it is challenging in ten years when the largest cohort to determine an accurate budget of baby boomers turn 65,” she says. from year to year,” she says.

Despite this, the foundation, which New Zealanders may be among the celebrated its 50th anniversary this most generous in the world but year, offers a wide-range of services funds are spread thinly between 25,000 charitable organisations. Ian Town through their partner societies and trusts, for asthma sufferers and their “We are competing for every charity dollar families. This includes research, advocacy and more is expected of us, because as and education on best practice. a charity there has to be a high level of “We have a strong mandate from accountability and transparency regarding the community and the trust of how donations are spent,” she says. health professionals around New Over recent years, the Asthma Foundation Zealand,” says Chairman of the Asthma has become more professional and Foundation, Professor Ian Town. strategic in its approach, and aligned its “It’s very much a partnership. The policies with national public health policies. community appreciates the level of Angela, who has an extensive background expertise that we provide and we very in public health, has been chief executive much appreciate the support that we for nearly four years. In that time, she get from the community because if it counts raising the organisation’s profile, means that one less child is admitted reaching fundraising targets, improving to hospital with an asthma attack, then engagement with Maori, and forming we have done our job,” says Angela. an Expert Advisory Group that will “People may not be aware that New Zealand develop a national respiratory strategy has the second highest rate of asthma in among the foundation’s successes. BOARDROOM | 45

She puts the foundation’s success last year. Regularly evaluating boards BOARD EVALUATIONS down to the backing of a committed ensures that the board is performing BetterBoards board evaluations are board as well as a hardworking to the best of its capabilities, much available as an online tool to assist in the and efficient team in the office. in the same way as performance development of directors and the CEO. appraisals of management or staff. An evaluation helps boards identify their The ten-person board is drawn from around strengths and weaknesses, assess their the country and includes directors with a “The board appreciated the structured performance and determine opportunities diverse range of skills and backgrounds. process and responded constructively for becoming better at what they do. The to the areas identified for further work “They give tirelessly of their time and resulting reports are comprehensive, easy to improve the quality of governance energy and I see it as my role and the to follow, and can enable real change. provided,” says Professor Town. team’s role to make their job easier. We are For more information visit committed to governance best practice One of the positive outcomes of the www.iod.org.nz and take a timely, no-surprises approach evaluation was a refreshed strategic to reporting to the board,” says Angela, plan, aimed at achieving the foundation’s who attended Director Development’s goal of a 25 per cent reduction in Governance Essentials programme. respiratory admissions by 2025.

With the aim of ensuring optimum board For more on the work of the performance, the Asthma Foundation Asthma Foundation, visit undertook a BetterBoards board evaluation www.asthmafoundation.org.nz

New DirectorSearch Appointments The IoD maintains New Zealand’s largest database of independent directors. We can help you recruit the best people by searching this database and matching individuals’ skills and experience with just Veronica Aris Graeme Boyd what you’re looking for

Veronica Aris and Graeme Boyd have health products. Veronica brings to the in Tauranga and has been involved with recently been appointed to the board board a wide range of skills developed exporting and international marketing in of BLIS Technologies Ltd. Based in through her career in creating and Western and Asian cultures, primarily in Dunedin, BLIS Technologies is listed on implementing dynamic marketing and the manufacturing and natural remedy the New Zealand Stock Exchange and is sales strategies across Australasia. sectors. For more information on BLIS an award-winning producer of probiotic Graeme is an experienced director based Technologies Ltd, visit www.blis.co.nz 46 | BOARDROOM

branchnews

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AUCKLAND 7 ANZ CEO David Hisco, “an Australian who has fallen in love with New Zealand”, spoke at a lunch function on 9 July, telling Auckland branch members that if Australia is the Lucky Country, then New Zealand is the ‘Plucky Country’. He spoke on what Australia can learn from New Zealand, discussed how governments can foster innovation, 8 and called for an even closer trans- 9 Tasman relationship in the next 50 years.

Xero CEO and 2013 Entrepreneur of the Year Rod Drury addressed a breakfast on 25 July, calling for a chief technology officer for New Zealand. He told attendees that as a small nation, we are well-positioned to transform our place in the world through technology.

Industry leaders heard Dr William Whittaker, WAIKATO Don Stock and Julian Hughes at the Grant Thornton consultant Trevor New Zealand and the challenges and Contractor Initiative in Whangarei on July 28. Thornton discussed the power of statutory opportunities his government faces. management at a lunch event in Waikato, New directors attended a Next Generation Hamilton members heard from risk including issues faced as statutory Directors evening workshop on 29 July, with management experts Souella Cumming manager for the failed Aorangi Finance. Sir Ron Carter, Sir Selwyn Cushing and Sir and Erica Miles on how to improve health John Wells offering advice on how to get your British diplomat Patrick Reilly and safety governance and performance. first break. discussed the UK’s historic ties with

TARANAKI NELSON MARLBOROUGH Directors from across the region attended The Contractor Initiative arrived in Nelson on 24 June, presenting local businesses with the Contractor Initiative, which was the challenge of leadership on health and safety. held in conjunction with the Business Leaders’ Health and Safety Forum and Productivity Commission chair Murray Sherwin addressed Nelson members on 13 August, aimed at reducing workplace deaths and discussing New Zealand’s productivity conundrum and what can be done about it. This injuries among New Zealand contractors. event was held in conjunction with Chartered Accountants ANZ. BOARDROOM | 47

1 | Brent Impey, Liz Coutts (Auckland) 9 | Patrick Reilly, Tim Heeley and Mark Hanlon 2 | Rod Drury breakfast (Auckland) (Waikato) 15 | Dorenda Britten, Richard Christie, Philip 3 | Trevor Thornton, Simon Lockwood (Waikato) 10 | Maria Stockman, Peter Tinholt (Bay of Plenty) Redmond, Geordie Hooft, Peter Young, Sue Wood 4 | Gary Osborn, Bruce Sheridan and Jason Cowan 11 | Kevin Atkinson, Maria Stockman, Peter Tinholt (Canterbury) (Waikato) and Glen Williams (Bay of Plenty) 16 | Clare Kearney (Otago Southland) 5 | Bill McLeod, Tania Simpson, Margaret Devlin (Waikato) 12 | Tamati Coffey (Bay of Plenty) 17 | Paul Moodie and Geoff Thomas (Otago Southland) 6 | Paul Bennett, Peter Anderson (Waikato) 13 | David Sandeman, James Beale, Reg Montgomery 18 | Chris Hopkins receives his Fellow certificate from 7 | Charlotte Isaac, Brian Squair (Waikato) (Bay of Plenty) Geoff Thomas (Otago Southland) 8 | Senga Allen, Di Halifax, Trisha Benge, Jeannine 14 | Christine Johnston, Liz Hirst, Dennis Parker, Bill 19 | David Shaw, Norcombe Barker and Martin Dippie Walsh (Waikato) Lee, Peter Harris, Melanie Coker (Canterbury) (Otago Southland)

10 11 BAY OF PLENTY The Bay of Plenty Aspiring Director Award was announced at a cocktail function in Tauranga, with television personality Tamati Coffey as guest speaker. Congratulations to the winners, Maria Stockman and Peter Tinholt, and to our finalists Kevin Atkinson and Glen Williams.

New Zealand Superannuation Fund CEO Adrian Orr 12 13 gave an engaging talk on leadership, telling Taupo members that a company's ability to articulate its values, vision and purpose is critical to its success.

Experienced PR practitioner Fiona Fenwick, an expert on reputation and personal brand, spoke on the importance of corporate reputation at the Tauranga Club.

WELLINGTON CANTERBURY 14 Treasury deputy CEO Vicky Robertson Corporate governance adviser Richard Westlake spoke at a breakfast function presented the latest Directors’ Dilemma on 24 June, telling Wellington workshop using material from his recent members that Treasury intends to studies at the London Business School. Working walk alongside boards in future. through realistic board scenarios, attendees left with enhanced networks and a greater Executive search specialist Lilias understanding of grey areas in governance. Bell offered her advice on writing an effective governance CV, emphasising Farmlands CEO Brent Esler shared his 15 the need for clarity in a cover letter. governance experience at an event in Ashburton, with particular emphasis on health Former Wellington mayor Kerry and safety and the importance of ensuring Prendergast spoke on dealing with a balance between work, life and risk. conflict in the boardroom, telling East Coast members that regular Brisbane-based director Grant Murdoch communication between the offered his views on the governance scene in chair and directors is an essential Australia and the challenges for New Zealand ingredient in unifying strategic firms moving into the Australian market. direction and galvanising the board. OTAGO SOUTHLAND 16 17 A brown bag luncheon was held Mitre 10 chairman on 30 July, with facilitator Jackie Martin Dippie spoke at Lloyd leading the discussion the Otago Southland on technology governance. Aspiring Director WorkSafe NZ chair Professor Award on 23 July. Gregor Coster spoke on the new We congratulate agency’s priorities, and discussed winner Clare Kearney, the implications of health and who was overseas 18 19 safety reform for directors. at the time of the announcement, and Lawyer Alastair Hall and experienced runner-up Paul Moodie. director Dave Frow helped Palmerston North members prepare for health and safety reforms at a lunch function on 13 August. 48 | BOARDROOM branchevents A preview of branch events to be held over the next two months. For a full update check the branch section of www.iod.org.nz

AUCKLAND WAIKATO

Election 2014: Permutations, Creating and adding New members’ lunch predictions and post- value as a director 12.00pm - 2.00pm, 1 October, election negotiations Members and non-members are invited Gallagher Lounge, Waikato Stadium Political journalist Colin James to a lunch function with guest speaker offers his analysis of the election Dallas Fisher. Warren Larsen campaign and takes your questions. 12:00pm - 2:00pm, 20 August, 7.00am - 9.00am, 15 October, Radio 7:30am - 9:00am, 25 August, Waikato Stadium, Gate 5, 128 Seddon Sport Lounge, Waikato Stadium The Northern Club, 19 Princes Road, Whitiora, Hamilton Street, Auckland

WELLINGTON

Governance at the World Bank John Whitehead, a former executive Colin James director at the World Bank, will offer lessons learnt working under the bank’s Next Generation Directors unusual governance arrangements. An evening workshop focused on 7:15am - 9:00am, 19 August, The building your governance capability. Wellington Club, Level 5, 88 The 4:30pm - 7:30pm, 16 September, John Whitehead Terrace, Wellington BNZ Partners Business Centre, Deloitte Centre, Level 7, 80 ASPIRING DIRECTOR DINNER SERIES Queen Street, Auckland This four-part programme kicked off on 14 August with a dinner covering the Welcome cocktails for new members basics of governance. The remainder of the series will be held as follows: Meet the branch committee, local Dinner Two: What have I got to offer? A call to arms directors, and other new members at Recognising and developing competencies, Financial Markets Authority CEO Rob a cocktail evening on 29 September. and individual pathways to governance. Everett on new growth initiatives, 5:30pm - 7:30pm, 29 September, 6:15pm - 9:00pm, 28 August, The opportunities in light of the new The Northern Club, 19 Princes Wellington Club, Level 6, 88 Financial Markets Conduct Act, and Street, Auckland The Terrace, Wellington how directors can contribute to lifting confidence in financial markets. Dinner Three: How can I get there? 7:15am - 9:00am, 4 September, Guest speakers discuss online marketing, BAY OF PLENTY The Wellington Club, Level 5, 88 networking and your curriculum vitae. The Terrace, Wellington What’s your corporate style? 6:15pm - 9:00pm, 10 September, Revive, refresh and recharge at The Wellington Club, Level 6, 88 Director Dinner a cocktail function with Bayfair The Terrace, Wellington Guest speaker Rob Cameron discusses stylist Angela Beatson and health the governance demands and The Director’s Den expert Dr Anna Rolleston. the role of independent directors An after-work event to cap off the series. 5:30pm - 7:30pm, 27 August, in high growth companies. 5:30pm - 7:00pm, 18 September, Elizabeth Café, 247 Cameron 6:15pm - 9:00pm, 25 September, The Wellington Club, Level 6, 88 Road, Tauranga The Wellington Club, Level 6, 88 The Terrace, Wellington The Terrace, Wellington Not-for-Profit Workshop 5:30pm - 7:30pm, 9 September, Tauranga Club, Level 5, Devonport Towers, Tauranga BOARDROOM | 49

NELSON MARLBOROUGH

AUCKLAND Shirley Hastings ph: 021 324 340 fax: 04 499 9488 Melissa Clark-Reynolds Deb Shepherd email: When perseverance is not a virtue Lunch function with Deb Shepherd auckland.branch@ Melissa Clark-Reynolds presents 12:30pm - 1:30pm, 30 October, Quench iod.org.nz the Winners’ Guide to Quitting at a Restaurant, Chateau Marlborough, corner BAY OF PLENTY lunch function on 3 September. High and Henry Streets, Blenheim Jo Perry 12:00pm - 1:30pm, 3 September, ph: 021 557 116 Trailways Hotel, 66 Trafalgar Street, Nelson email: [email protected] CANTERBURY CANTERBURY Sharynn Johnson ph: 03 355 6650 New members’ lunch fax: 03 355 6850 A quarterly informal lunch hosted by email: our branch committee to welcome canterbury.branch@ the branch’s newest members. iod.org.nz 12:00pm - 2:00pm, 5 September, 50 Park Terrace, The George, Christchurch NELSON MARLBOROUGH Jane Peterson After-work event Adrian Orr ph: 021 270 2200 with Andy Borland email: Scales Corporation Christchurch function [email protected] managing director Andy Adrian Orr, CEO of the New Zealand Borland discusses the Superannuation Fund, speaks on investing OTAGO SOUTHLAND path to a public listing. with careful hands and the role of the New Vivienne Seaton 5.45pm - 7:45pm, Zealand Superannuation Fund in meeting ph: 03 481 1308 Andy Borland 22 September, 50 future commitments, followed by a dinner fax: 04 499 9488 Park Terrace, The George, Christchurch for Fellows and Distinguished Fellows. email: otago.branch@ 5:45pm - 7:45pm, 20 October, 50 Park iod.org.nz Timaru function Terrace, The George, Christchurch Sara Lunam, Corporate Services Manager TARANAKI at the Port of Tauranga, will speak on how Julie Beck good boards add value for management. ph: 021 632 709 5:30pm - 7:30pm, 13 October, The email: Grosvenor, 26 Cains Terrace, Timaru [email protected]

WAIKATO Megan Beveridge OTAGO SOUTHLAND ph: 021 358 772 fax: 07 854 7429 email: Governance Wisdom Breakfast Luncheon with Tina Symmans [email protected] Simon Arcus, manager of the IoD’s 12:00pm - 2:00pm, 24 September, Governance Leadership Centre, will join The Dunedin Club, 33 Melville Street, Dunedin WELLINGTON senior directors to offer new or aspiring Jeanette Wogan directors their experience and advice. ph: 021 545 013 Cocktail function with Peter Wardell 7:00am - 8:30am, 20 August, The Dunedin fax: 04 499 9488 5.30pm - 7:30pm, 3 October, Queenstown Club, 33 Melville Street, Dunedin email: Resort College, 7 Coronation Drive, Queenstown wellington.branch@ iod.org.nz B AU_NZ Director-Ad-edit.pdf 1 6/9/14 10:25 AM

50 | BOARDROOM New people, new places, new ways

Through LinkedIn, I get approached by people Dr. Lee Mathias from all over the world regarding my work, or the Chairman at the Unitec Institute of Technology New Zealand health sector, or governance and healthcare services – my doctoral topic. 500+ connections Older people aren’t the most active on Twitter, but when we do tweet, it’s usually something Dr. Lee Mathias, Chair of Unitec and Counties interesting or profound. Not about the hot topic Manukau District Health Board, says that of today, more about strategic change. Social social media has changed how she discovers Research suggests media is about the sharing of new ideas. By email, information and contributes: the more one uses the networking would be much slower. I would have internet and social media, “On LinkedIn, I’m pretty active in the Boards & to email contacts to ask about their new research the more diverse one’s Advisors group led by Richard Leblanc. This but with social media, I see what they post.” network is. New Zealand group is made up of academics who talk directors are making new about research. We have been known to connections and finding drive pre-research ideas. new ideas through their own online networks. chief executives are doing. I report to a board A typical person has Wayne McNee and sometimes there are posts that come from hundreds of ties in their Chief Executive, Livestock Improvement Corporation (LIC) a governance perspective. I read the Harvard C overall network. Users of Business Review (HBR) each month, but when M technology such as social 500+ an HBR article is flagged on LinkedIn, that Y media have even larger connections gives me a reason to give it a closer look.” networks. But not only is the Wayne McNee, CEO of Livestock Improvement CM

internet increasing the size Corporation and a director, also uses LinkedIn I also use Twitter a bit, although not as MY

of one’s social network, it’s and Twitter. much as LinkedIn, about two to three times CY also increasing its diversity. a week. AgChat [a weekly moderated Twitter “From being a member of LinkedIn groups, I see CMY ‘conversation’] is on every week…there’s a Facebook’s own posts from other members. Often interesting K Kiwi version and an international version. examination of network business or leadership articles are posted diversity found that a large that I wouldn’t otherwise be aware of. I follow key people like ministers to see what proportion of the content a they’re up to. I follow a few companies as well.” Mostly I’m looking for things relating to Facebook user sees comes leadership – things that other businesses and from their weak ties. And “these distant contacts are more likely to share novel I don’t use Facebook for business. I avoid information, demonstrating Andy Fenton anyone I have worked with, or for, on Facebook. that social networks can Managing Director at Desktop Imaging Ltd and NZ There’s that quote – ‘Facebook is the people act as a powerful medium Micrographic Services Ltd you went to school with; Twitter is the for sharing new ideas”. 500+ connections people you wish you went to school with’. NEW ZEALAND Andy Fenton, who served on the I think those that surf or trawl only get a small DIRECTORS SHARE National Digital Forum board from 2006 portion of the benefit that those who actively The IoD reached out to to 2013, primarily uses LinkedIn. interact do. directors on our LinkedIn “I get a weekly digest from about 20 LinkedIn Sharing ideas on social media is a way to connect group to ask if they had groups – I can contribute or I can pass with others. On Twitter and LinkedIn, I can see been introduced to new threads on to those that might be interested. what someone posts, get into their frame of mind, people or new ideas As a member of the IoD’s LinkedIn group, I then put some valuable content in front of them. through social media. push governance articles around too. On Twitter, when I find something interesting, I flick it to someone I’m following. Having them Twitter is big for me because of the area that I’m find me interesting may lead to doing business in – digitisation. Through Twitter, I can access a with them, regardless, we all learn something!” Australia new band of contacts, people in their twenties Level 4, Plaza Building +61 2 8249 8233 through to their forties. Once you get proficient Australia Square at following, you get brave enough to participate. 95 Pitt Street, Sydney NSW 2000 +61 2 8079 2998 B AU_NZ Director-Ad-edit.pdf 1 6/9/14 10:25 AM

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Australia Level 4, Plaza Building +61 2 8249 8233 Australia Square 95 Pitt Street, Sydney NSW 2000 +61 2 8079 2998 Level One, Huddart Parker Building, 1 Post Office Square Wellington 6011, New Zealand +64 (0)4 894 1856 [email protected]

client ComplyWith

contact David Shanks

project IoD Ad Campaign

execution Single Page Back Cover June

artwork size 210mm (w) x 297mm (h)

scale 100%

output size 210mm (w) x 297mm (h)

language English

date 05 June 2014

studio Carlos

notes Full colour CMYK

CW0039 IOD Ad SP A4 FA3.indd 1 5/06/14 10:22 am