I recently met with Abby Foote and Susan Peterson to discuss their perspectives around the next generation in the boardroom. Both women from the North and South Island are just a small example of the next generation of female professional directors being appointed to boards of large corporates in New Zealand. As the baby boomer generation slowly retires, our boards are being refreshed with the next generation of directors.
Our Q&A interview focused on three areas covering: "board dynamics in five years", "the next generation of directors" and "diversity in the boardroom".
How will the board dynamics change over the next five years?
Abby Foote expects that we will see increasingly diverse boards which, in some cases, may lead to more challenge and debate around the board table. She feels that "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." She also believes 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."
Susan Peterson feels certain that the market dynamics will change moving forward which will require Boards to correspondingly change. She says that "It is fair to assume that technology innovation will continue to increase the pace of globalisation. This provides exciting opportunities for New Zealand companies to more readily access much bigger markets." However, she adds that "Boards will need to regularly review their composition to ensure that they have the international expertise and understanding of the risks associated with globalisation and increased competition if they are to succeed."
How best can we prepare the next generation of directors?
Abby Foote feels that "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."
Susan concluded that one thing is likely to remain unchanged. "It will continue to be an individual's own personal network that will heavily influence the professional opportunities that come their way." For example, executives who aspire to directorships," need to not only be able to demonstrate successful growth and enhanced productivity in their executive role but they also need to work hard to build and nurture their professional network so that they will be recommended."
How are we tracking around improving "diversity" in the boardroom?
Abby Foote felt that "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."
Susan Peterson added that "diversity is critical around any successful Board table." She thought "that being the case, the next generation of Board members will come from an increasingly wide variety of backgrounds. The future generation Board is likely to be increasingly multi-national (as New Zealand companies look to grow off-show and is likely to be culturally diverse. Susan summed it up by saying "with this in mind that it is going to be especially important to be open minded to adjusting traditional processes, systems and risk management tools to accommodate different ways of doing business successfully in different cultures."
Susan Peterson based in Auckland, is an Independent Director at Wynyard Group, The New Zealand Merino Company and Vista Entertainment.
Abby Foote based in Christchurch, is an independent director at Transpower New Zealand, Z Energy and BNZ Life Insurance.
Henri Eliot is CEO of Board Dynamics