Henri Eliot: Perspectives on being a professional director

Independent director Abby Foote

Opinion

Abby Foote is an experienced director of both publicly listed and Crown companies. Based in Christchurch, she has worked in a range of corporate, treasury and legal roles over the last 20 years. Abby holds a number of directorships, including Transpower New Zealand, Z Energy and BNZ Life Insurance. Her corporate governance career started by accident, when she was approached at age 32 to serve as a director - then eventually chair of Mike Pero Mortgages.

Abby Foote talks to Henri Eliot about her perspectives on corporate governance.

What is the role of a board from your perspective?

I see the board's role as driving value by ensuring that the company has clear goals (both short and long term), that the structure and processes of the company are appropriate to enable achievement of those goals, by monitoring performance against the goals and by ensuring that the company manages risk and compliance obligations appropriately.

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

I expect that we will see increasingly diverse boards which, in some cases, may lead to more challenge and debate around the board table. It will be important for board members to be open to this challenge and to work as a team to look for the best outcome for the company. I also believe that boards will need to work harder to avoid becoming compliance focussed, looking for ways to manage compliance whilst ensuring equal or greater attention on the other aspects of their role to ensure they continue to add value to the company.

How should we best prepare the next generation board member for the future?

Some of the most important skills that a director can have are an enquiring mind, the courage to question and an ability to analyse information quickly to identify possible issues. These are the skills that we need to be encouraging in workplaces and educational institutions if we are to give future directors the best grounding for the role. I suspect that we will also need to encourage future directors not to be scared off by the sense of increasing liability around the role of a director.

Should shareholders be more pro-active in New Zealand?

As with challenge around the board table, challenge of the board itself can be an important way of ensuring robust decision making. Groups like the Shareholders' Association and analysts play an important role in encouraging effective governance. However, boards also spend a large amount of time on compliance reporting which is designed for shareholders' benefit but which, I suspect, many shareholders don't use - either because they don't see the need to take an active interest in their investment or because they are relying on others to do that work for them.

How are we tracking around improving "diversity" in the boardroom?

The idea of diversity of skill-set in the board room is pretty much unchallenged now. However, there has definitely been a lot of focus recently on other aspects of diversity - particularly in relation to gender. I think there's been some good progress as a result of this diversity focus but there is still a way to go and there remain many who resist it.

It is important that we don't see representation by particular groups as an end in itself - the aim is to ensure a diversity of perspectives on issues that come before the board. It's also important that merit and skill remain foremost in any appointment decision to avoid any charge of tokenism.

Turning back the clock, would you do anything different in your career?

There's no point in wishing you'd done things differently. I believe that it's better to work out the gaps in your skill set and then work to fill them. It's also important to identify your strengths and look for ways to use them to your advantage.

Henri Eliot is CEO of Board Dynamics