New Zealand companies need to be shown how crucial it is to turn your board of directors international-and how few companies have done so.
For a company with global aspirations, a strong effective board plays a key role in developing an international strategy.
To meet the requirement to expand into overseas markets, a company's board needs to recruit directors with international experience. A growing number of New Zealand companies are looking to recruit directors who are based overseas in their target market or who recently returned to New Zealand with global experience.
Today when recruiting, boards are looking beyond legal and financial skill sets by ensuring some directors have worked offshore. Time spent in Asia is a key area of interest for many New Zealand companies selling into China for example. Boards seem to want a mix of overseas experience and domestic governance expertise.
Boards should also consider the benefits of recruiting Asian directors, something very few have done so far.
Boards should also consider the benefits of recruiting Asian directors, something very few have done so far. As expansion into Asia requires a strategic long term view backed by a commensurate investment, the board needs to be well prepared with local knowledge to make this decision.
For example, The Wynyard Group has two international directors on its Technology Committee (as a formal committee of the Board) that is accountable for driving innovation in their technological product offerings.
According to Susan Peterson, a non-executive director at Wynyard Group and Vista Entertainment Solutions, "It's about seeing your board as strategic enablers around the business". Great directors (international or domestic) bring to the company both a broad network of relationships and deep experience or specialist knowledge not otherwise held around the board table that is key for driving growth. If the target markets are offshore then international experience and relationships are hugely valuable."
They provide a global and aspirational perspective on our go-to-market strategy, provide a link to leading edge technology, and ear to the ground in our target markets, and the cultural diversity to ensure we make balanced and the right decisions.
In creating their board at Wynyard, they looked at 5 areas: proven governance experience, relevant industry knowledge, deep functional expertise in high growth companies, diversity and board dynamics.
According to Craig Richardson, chief executive of Wynyard, "The only way we felt we could meet these objectives was to secure directors based in our target technology, vertical and geographic markets. They provide a global and aspirational perspective on our go-to-market strategy, provide a link to leading edge technology, and ear to the ground in our target markets, and the cultural diversity to ensure we make balanced and the right decisions."
Susan Peterson also sees a board as being able "to help the business grow through well networked directors" such as Kirk Senior, chairman of Vista Entertainment Solutions, a supplier of software to the global cinema and film industry. Founded and headquartered in Auckland, Vista operates in over 60 countries and has offices in London, Shanghai and the home of Hollywood, Los Angeles.
In his role as chairman, Kirk Senior is "constantly on the go, waving the Vista flag. If I'm going to get on a plane and leave my family behind, it must only be to do great things with great people. Vista affords me that opportunity."
"We have a global business but we're really only just starting. We are now seeing significant opportunities in the broader film software industry and are poised for some very exciting times. We have a great suite of products, a master plan and have recently bumped up our human resource capacity and capability."
Kirk further explains the boards role "We operate in a global marketplace and having international expertise at board level is critical. International networks and relationships are essential if we are to successfully compete on the global stage. Personal relationships provide credibility and trust and make our business feel local for our international customers".
Nothing in life or business stays static. All businesses and organisations need to constantly change and evolve to stay relevant. I do not see Boards as any different...
Chris Liddell, a US based, former New Zealand executive recently joined the board of Xero as Chairman. He provides a strong US network and high profile that should be very useful to Xero as part of its strategy to further grow its customer base in the US.
Both Xero and Wynyard share prices are going from strength to strength - is a major factor in their success having international board members and very charismatic CEO's?
As Cathy Quinn, chairwoman at Minter Ellison says "Nothing in life or business stays static. All businesses and organisations need to constantly change and evolve to stay relevant. I do not see Boards as any different - so yes I think the Board dynamic will change. Exactly how is harder to predict. As China becomes more critical to New Zealand's success, I expect we will see some Board's include in their composition people with experience of working successfully with Chinese enterprises."
"The best directors in my view are those that have been through the ups and downs of business - they have experience from being involved in business - in both success and failure. They have run businesses or been involved in managing businesses at a senior level."
Craig Richardson, sums it up very well: "We are a hi-tech international operation with global growth aspirations. If a board is to play more than a governance role and truly contribute to the company's success, it needs to have international directors with deep industry, technology and target market experience. Wynyard has a board that ticks all those boxes."
Henri Eliot is CEO of Board Dynamics