 Good morning everyone and welcome to this webinar on Responsibilities, Risks and Rewards of Directorship. My name is Claire Braun. I'm the Executive Director and Founder of Women on Boards and we are delighted to be partnering with Redback Conferencing and Governance Institute of Australia in bringing you this morning's discussion. Before we start, I would like to acknowledge Country, the Gadigal people of the Eora Nation and in fact Elders past and present across this nation of ours who for many tens of thousands of years have demonstrated leadership and governance and really it's on those skills that we build today. We've got an excellent panel, all Women on Boards members and a number of them from Governance Institute and I'd like to turn to them now to introduce themselves to you. First of all, Leah Fricky. Thank you Claire. My name is Leah Fricky. I've been a non-executive director for around three years in the commercial space and for at least 15 years prior to that on not-for-profit boards. I was a lawyer and company secretary in my professional career. My final executive role was a GM role looking after a range of operational areas in financial services. I've been very fortunate to work on a number of Indigenous Corporation boards so I echo my acknowledgement of the Elders past and present across the nation and I currently work in a range of areas including medical, technology and financial services. Thank you very much Leah and to Janet Torney. Thanks Claire. I've been a non-executive director on a professional basis for about three years. The areas that I've covered are very much in the financial services not-for-profit and to some extent in the engineering area. I'm currently chairman of White Helm Capital which is a global infrastructure investment management business and an advisory business serving on a range of their committees and also chairing their investment committee. I've recently been appointed to a credit union board and I'm also on the board of Girl Guides Australia. Something right to my heart, I grew up through the guiding movement and that's one of the good things about boards that you actually come back to your roots very often. As well as that, I'm on a range of advisory boards like Australian Cycling Executives which is a professional networking group for senior executives, professional IT and investment areas also involved with ASFA which is the Association of Superannuation Funds of Australia. With a different hat on, I have executive director roles in two smaller consulting businesses one for professional services and one in the engineering and manufacturing sector. My experience in these professional roles has been built over the last 25 years in terms of directorships both in my executive career and not-for-profit community-based organisations, industry-based associations. So overall, it's with a joy that you move into the non-executive director space and that's something we're going to discuss later today. Thanks very much, Janet. It is indeed. Tricia. Good morning, Claire and good morning everyone. My name's Tricia Mock and I'm the current president and chair of Governance Institute of Australia. My journey with Governance Institute began when I was a student in 2004-2006 and did the graduate diploma of Applied Corporate Governance then joined the council and then became representative director on the board. I became vice president two years ago and was appointed president this year. As president, I'm the chair of the board. I recently chaired the board meeting on the 8th of May and the AGM as well in Adelaide and in terms of strategy, key focus for me is raising awareness of the name change from Chartered Secretaries Australia to Governance Institute. I'm also passionate about women in governance and events like today and women on boards is very important to me. Finally, I'd like to be known as the digital president. I'm trying to move Governance Institute into the digital age and like my co-panelist, Lea Fricky, I'm quite active on Twitter and if anybody's online at the moment, please feel free to tweet about the panel today. Thank you. Thank you very much. A great point and a number of you might be on the women on boards Twitter stream as well, which of course is women on boards. So please feel free to tweet because you'll be sharing all of the knowledge. In fact, there are 700 of you at last count. There could be more out there listening to this. So our thanks again for registering for today's conversation. Okay, we're going to kick off. You've all submitted some questions, some areas that you want the panel to discuss. A number of you are looking really at the first boards or looking at why you'd want to be a company director. So really are the risks that great? What are the rewards? And more importantly, what are the responsibilities? I'm going to ask Janet first off. What the role of a non-executive director is and are there any really key skill sets that you think that directors need? Claire, one of the key things as a non-executive director is to be part of a team. People may be not the first thing that people think about but as a non-executive director, you're sitting around a board or table. It is the board's responsibility to oversee the business, provide guidance, set strategy, make sure that you're complying with all the various risks and regulations. But importantly, you're part of that team. In an ideal world, you've actually got a skill set that combines with the others around that board to be able to provide the oversight. You then come to, you talked about core skill sets. There's probably two things that you absolutely have to have. You have to understand director's duties and responsibilities and you actually need to be understanding the financials of the business. There are things you can't come away from. I think we might have some discussion later. They've both been tested very interestingly in some legal cases. It is a collective as a board but you as individuals need to be able to take responsibility for those. The other key skill sets that you're looking for is understanding your business or understanding the company you're with and then probably having a specialist skill around that board so that you can then as a collective make sure that you can deliver in terms of the oversight of the business and I think we'll come to you later again in terms of exec versus board but making sure you're not doing the work of the business but you're providing that oversight, guidance and sounding board. Leah, would you echo those? Yeah, I think Janet's covered off the key ones and I think that collaboration is a really important piece. I think there are the skill sets of finance strategy but once you're in the room your capacity to collaborate with others is really important and there are a couple of things I'll add. I think that the relationship with your CEO and your capacity to engage and encourage and monitor and nurture that relationship is important and I think the final thing which I usually say is the most important skill of a director is actually courage and I think it's that capacity to have courage to do the right thing to understand when to speak when not to speak but ultimately understand that really everything stops with you and if you have the courage to do the right thing it makes an enormous difference within the organization. Tricia, because Governance Institute of course practices very strongly here and does a lot of work and a lot of program what do you think are the key skills? Well, like our namesake Governance Institute I would say one of the key skills is an understanding of Governance is absolutely fundamental and would echo Janet's comments regarding the I think absolutely basic requirement is a strong understanding of finance and of the strategy and business of the organization. I'd also add that it's very important for directors to add value that's why you're there is to try and add value in whatever shape or form in terms of your learnings to be questioning of management and hopefully to also assist them with whatever projects they're working on. At Governance Institute we have a number of courses in relation to foundations of Governance or certificate of Governance practice or in a not-for-profit Governance certificate as well which might be helpful for those of you who are interested in learning more about Governance. Which brings us to the next question because the skill sets that you talked about there were not just technical we had courage, we had team players, we had all of those things that in fact play more to the attributes. The difference between executive and management roles, particularly on boards which don't have large numbers of staff so we're not talking major ASX listed companies here you can muddle an upper bit in your over enthusiasm sometimes. Is that something that you guys see at the Governance Institute? From time to time yes that perhaps Board might get too involved in certain activities like when we were preparing a new certificate when we changed our name and we shouldn't have Board members drafting certificates or doing marketing it should leave that to management. But having said that on the other hand recently we started discussing revitalising our digitisation strategy and as I'm quite a champion of digital I was one of the first key stakeholders interviewed there will be a number of other directors interviewed and I think the director of marketing found our input in valuables where the management is actually seeking our input and trying to get guidance from us as to what outside third parties are experiencing and customers expect or members expect from a digital perspective. We're also working on an IT transformation project and I was called in last week to meet with our IT consultant just to get a better understanding of the project and also work closely with the CFO so that we can draft the Board paper in a manner that hopefully will lead to approval of the project so again they're seeking guidance from us we obviously its management's remit to run the project and to draft the paper but seeking guidance from us as to what information did the Board need to make an informed decision. Talking of guidance how does it work for an organisation like Girlguides which of course is naturally smaller. I imagine a very large volunteer group though. A huge challenge and it's really interesting Claire that we've actually changed over the last two years of putting in a new governance framework. One of the most difficult things often with not for profits and with a large volunteer base is everyone's one wants to be involved from the ground up. What we did two years ago is turned around so it truly is a top down board with the board and committees that provide oversight that can then delegate as you would for any commercial organisation to the management to do the role. One of the important things though with a not for profit is it doesn't matter whether you've got volunteer or staff paid staff it's still getting around the governance framework and actually what is the best way to run the business and what we've done in that organisation and I think it applies for any organisation is make sure that the board in the oversight and that the doing comes from the management but the board's responsibility on that is to be very clear about roles and responsibilities very clear about key performance indicators or what you're expecting from the executive the management teams on a deliverable basis and keeping people to those commitments. The other thing that I think is crucial in an organisation like this is use of committees what you actually find I think one of the most effective things from a board is a board does need to be thinking strategy, big picture overviewing the key decisions. You need a work of a board as well and that's where effective use of board delegation of responsibilities they still can't get into the detail but they can take hands on responsibility for a range of projects and that framework whether it's a not for profit whether it's a commercial board I think is really and it's very dangerous when you actually turn around and get everyone getting their hands dirty at every step because you lose sight of the big picture and therefore you're not attending to your directors duties and responsibilities. Committees it's there's an increasing use of them it leads to the next question too about in building your skill sets to become a better in a day or non executive director really you need to be thinking out how you can serve on at least two or possibly even three committees for each board is that something that you've seen grow in your time. Yeah I'm a huge supporter of the concept of committees because I think they give the capacity for boards to manage their workload and to give individuals on the board and others the opportunity to use specialist skills that they don't necessarily have the opportunity to at a board level that I've worked on I've always made sure that I'm on committees where my skill set has the capacity for leadership so I've chaired committees but also on committees that might have been areas where I need to do some additional work myself so that in the committee context I have the opportunity to get into a bit more detail and to develop my skill set and I think that's more appropriate than developing your skill set at a board level and I think it's a really helpful way to broaden the work that you've done and the issues that you've dealt with. Claire I would say as well that one of the things as a director is you're forever learning. The notion that you don't have any more to learn in any part of life but I think as a director because the issues are changing. Digital being a classic which we've already mentioned you know there's probably a lot of people sitting around the table who may not have come up with a life skill set or experience on the digital but it's something we all need to get our mind around and I referred to a comment from David Gonski a year ago. He talked of reverse mentoring. He recognised that he actually didn't have the skill set there so where he was mentoring a young woman within ANZ Bank he got her to mentor in reverse so that he could come up the learning curve. So things will change. The other thing I think one of the most valuable things in learning skill set is looking around the table at the people around you. One of the things with entrepreneurship is experiential learning. You can do all the courses and they're essential but it is you are working as a team and one of the things to always be looking at as well as contributing is observing how people are doing things and thinking if that's relevant to your skill set to the way you become a director around the table and thinking about changing and developing. Which speaks to excuse me a question we've got from Elizabeth Valentine thank you The levels of capability that you think are evident within boards in general in terms of providing oversight for strategy, risk, compliance and value and the digital factor. There's been a bit of a question lately that in fact a lot of boards are not scrambling a bit on that new economy area and how well do you think boards are equipped in general to oversight those areas particularly the latter one? I think as Janet has said the reverse mentoring is an excellent suggestion and that digitisation skills is something and digital skills is something that all boards and directors are going to need to do some more work on. I think we've seen that recently in terms of managing the reputation risk with just on the weekend with Woolworths and I'm not sure if you're aware there was a data breach where they sent an email to a number of people think about a thousand who had gift cards and it also included the passwords for those gift cards and people's email addresses so we've got a privacy breach we've got data protection breach we've got reputation issues and Woolworths also had the reputation issue not that long ago on Anzac Day which was not really a social issue but became a social media issue because it was discussed and there were a number of people quite passionate about it on Twitter and that it wasn't the appropriate approach. What have you done because that issue really ran and once it started it just really took off so as a director how do you get in and think about we've got to shut this down, we've got to stop this how do you get in touch with management what do you do in that context where you can see your reputation streaming out there how do you think about that? We have a PR agency that are available to us and I would hope have a crisis management plan for such thing in a social media plan we also have a director of marketing so I guess I would as president I would call a meeting pretty quickly be it teleconference or otherwise if I couldn't get face to face to meet with the CEO the head of marketing and our PR agency and come up with the plan and a strategy of how we're going to address it and how necessary you get the CEO to come out and speak to it and try and shut it down you have to address that and sometimes if you don't and you just let it snowball that can be what happens. Leah because it can happen everywhere, it can happen in a small financial services company it doesn't have to be a major listed organisation how do you think about that in terms of risk? Well I think there are a range of things that can go wrong and I think digital is an aspect where it accelerates and increases the exposure so it's not that it's necessarily a new exposure but suddenly something that five people might know and be annoyed about, five million people can know about in under five seconds so there's an acceleration there and I think as a board you need to actually plan in advance for how you deal with issues and how your processes work to support the outcome of the organisation and you need to make sure that you have access to the right skills not just in your board but the kind of people who you can get into the room when you need them and in your executive team. So I think a lot of this is if you are caught by surprise by an event and you don't have a crisis management plan you don't have a risk plan you don't have a strategy you don't have every other director's number on your mobile phone saved that's when you cause yourself greater stress over something better managed. Any issue that arises can be managed. The question is how do you have a system in place to do that well? That's an interesting one because it speaks to the risk register at the beginning of meetings, all of those kind of things that sometimes organisations in the haste to move to the business of things overlook some of that sometimes boring process stuff. They do clear and I mean that you need to have that framework and that structure there and I would say that you ideally don't want to be having to deal with those matters at the beginning of a board meeting but you need to know that they're there so you can apply them. I mean I would hope the first part of a board meeting is typically about your higher level strategy and risks but the one other point I would make in terms of crisis management is leadership and it really comes to the chairman of the board. I think that this is where you very much are looking for that leadership that's developed. It is up to the chairman to guide both the board as their leader and also to guide the management where they're providing the oversight so that you actually can have an effective strategy to know whether this is an issue that you need to deal with immediately or is it white noise and I think that's one of the most difficult things in scenarios. Now coming back to social media, the pace has picked up so much and you know that is one thing whereas I think boards really are learning. I don't think this is an area where you can say yes we've ticked the box whereas people might say on strategy we've got a range of plans but I think it comes to the leadership and whoever the leadership of that matter that the boards are going to assign and just because it's leadership by the chairman often they won't necessarily be the front person speaking on it but it needs to be again I come back to that team to that governance, to that leadership. So the three key attributes of a good chair, you've been a chair I'm pretty sure you're a good one one of the three key attributes number one I would say trust I think it is important that you have the trust of everyone, all your stakeholders the second one is to be a strategic listener so I think listening is really important working out what is white noise or not and for a chairman probably being the last voice at the table although sometimes knowing that's not the right time when to lead it and the third one is being a good business manager because effective boards are boards that run well you know the basics of board papers meetings, knowing when issues are so being able not as a very explicit but the smooth running of the board happens because the chairman has got it under control so trust listening business management skills or being a good business manager understanding intrinsically the operation of the organization Trisha sort of in that same theme I'd say being a first among equals because not dominating but doing the active listening and you're leading but you really are, you need to be collegiate and you're working with your peers I think integrity is very important and we're seeing that come up more to the fore with some recent crises and the like and I think emotional intelligence might be another one that we need to have A bit of VI, Leah, what do you think? Okay, well I have a couple of things that I think are important characteristics for chairs and I think I mentioned courage previously and someone the other day said that directorship is one of the forms of pure leadership you're really doing but you're actually leading and I think for a chair it's that leadership aspect of it that has combinations of integrity and courage I also think as a chair you have a role in the curation of information so an enormous amount of information is created about an organization, the market and as the chair you need to be able to personally be able to curate all of that and have it make sense to you and be able to make sense of it for others and I think the final thing that I think is important is relationships and as a chair you have a really broad range of relationships including the relationship that you have with all of your staff which has to have certain characteristics to it the relationship with your peers around the table and your relationship with your CEO so excuse me, I would say they're the three that I would select Interesting ones, we've actually just had a question which I'm going to take as well from Alyssa, thank you and Alyssa asks, certain skill sets are more valued for boards or they appear to be I think it's changing but I'll ask the panel, accounting and law but I think we're seeing a shift to strategic marketing strategic HR, there's been a big talk about understanding of digital here and ICT which naturally comes with a younger set of people so what are the more unusual but still valuable skills and background that you think are valuable for board roles Well I think definitely the marketing and the digital one where I think about a director recently pointed to the Qantas board, his name escapes me but he's on the television Tom, thank you, doing all sorts of crazy things and clearly he said he wasn't looking for a directorship but I think because of his different way of looking at the world and background in advertising that they've seen that's helpful for a Qantas board to understand that being a consumer business I think risk is, whilst risk has always been there it's certainly been increasingly seen as an important skill to have and for directors to need to have an understanding that particularly those in the listed space having to comply with ASX or governance principles principle number seven but I think any board and any companies if we're going to be working towards best practice in governance should be trying to comply with those principles in any event Because risk is not just about legal risk is about reputation risk is about all those kind of things too isn't it I would agree it's a core skill set and the way I look at it though is that rather than risk being just it I think as a director you need to look at everything through a risk management lens there is nothing in business that you shouldn't be viewing from a risk perspective and that's a one of the things as a director as opposed to maybe in executive roles is a different way of looking at things and risk that risk management lens is one of the key ones one other thing I would say though about the skills that there's no doubt on a board you'd need people with your financial expertise and with the legal expertise I mean we've got to be very careful here that we don't think it's all into the new age or different ways of doing it I mean they are absolutely essential you know especially on financials I mean you can go to the Centro case I mean every individual director must understand the financials but the one other area I would say as well as digital sort of big data is international skill set the ability to have that skill set around the board businesses are now global and I think we are part of a world but people of that had that international experience I think is a really important combination so I suppose at the heart of this skill set question comes to diversity and I actually think one of the things we haven't chatted about so far is the fact that boards really do need to be diverse and diversity is not just gender diversity is geography it is experience it is industry and a collective board is one that brings that variety of diversity together and as I say I think if you look over the next decade gender is really important don't get me wrong but I think it is that complete diversity on a board that is going to be part of that skill set and I think that's one of the differences we can't just do things the way that you think we've done them before and hope for a different outcome it's a truism we all know it really applies around the board table interesting and I'm going to follow it up and ask Leah because Elizabeth Valentine has followed up and said is the current board process of governance by exception where the board essentially relies on the board papers for their information adding risk because of course board papers can be 400 pages, 500 pages, 600 pages do we need a combination of traditional mechanisms and others that are more agile to cope with the speed of disruptive change and risk so back to your thing about things moving are we going to see a shift in the way we think about the board structure and those board kind of processes well I will get to that because I think that's an interesting issue I want to just loop back to the skill set for directors and what people are recruiting for at the moment because just to add into what Trisha and Janet have said my experience in the market in the recruitment process with boards at the moment is I think there's an assumption particularly for commercial boards that your finance governance skills are expected so people don't talk to me about my legal skills, my finance skills my governance skills in spite of the fact that a governance is probably the area that I have the strongest skill set in the areas that people are interested in talking about are the work I've done in digital and technology the work I've done overseas in the indigenous communities so the multicultural aspect and increasingly for me the transactional stuff so having shown leadership in larger transactions, mergers acquisitions of other businesses so I think we need to recognize that the basic skill set of legal and finance and even risk to some extent in certain roles it's expected that you have all of that so they are not skill sets you bring to the table everyone at the table has that skill set and you are bringing something in addition to that so I think there's that slide adjustment in what the basics of being a director might be about on to the question about how boards inform themselves I think there are a range of challenges around the board paper process that we use at the moment and most people who are involved in board papers could spend their entire career searching for how do we present the perfect information and I have this view which I talk to people about all the time is the one page that tells me everything I know so that I know what I then need to focus on and I think there are fantastic opportunities with our capacity with technology to provide contemporaneous relevant helpful information to boards that can assist them in their decision making I think the days of a printed 100 page hard copy being couriered to all of your directors which was my experience as a company secretary for many years have well and truly gone and I think each company and particularly for company secretaries and chairs who are curating and managing information for boards they need to work out the best way to get the information that's relevant for their board to give their board enough time but also to make the information as up to date as possible with board portals with digital access and I think each company needs to work out what works best for them we are on some of the boards others were not it is a continuum one of the important things I think though is it comes back to actually understanding and knowing the business that you're in so that you can know what you don't know and also know the times as to when you actually need to make the deep dive so it's very easy for boards to get set into a regular meeting pattern committees it all sort of goes like clockwork if you've missed the big picture of understanding what issues are let's take an example when regulatory or government change comes through what's the responsibility the responsibility of the board is to actually understand the matter not to necessarily execute it but so you need to be able to say what do I need to know and then have the framework get up as we talked about at the beginning of the conversation about knowing what matters do I think management haven't got right and that I need to do the deep dive into so it's that emotional intelligence you're talking in terms of understanding as well as the IQ in terms of knowing what do I not know but you need to have that often informed base and that's where sometimes the boards need to say we want the education as we want to get the knowledge as well as actually just dealing with the mechanics of actually a board meeting or the specific matters at hand and directors part of the job is you need to take personal responsibility for being up to date in your area in your market it's not all about I've received the board pack and that's everything it's absolutely your responsibility to curate information on your own to understand the industry to understand what's going on and to ask those questions of your management team that brought things to your attention not just the boardroom and the board pack so another question came in and I'm going to defer that so please I will get them all answered I'm interested in that topic because it's really interesting because people think that boards are just the oversight and it's the strategy you do need to have that big broad market knowledge you need to be really quite an expert in some areas and it's your responsibility to be keeping yourself up to date and then people just say well directors exercise governance well governance is a pretty big term what do you understand by the term governance which is bandied around a whole lot these days I guess from a personal perspective Claire I think it's about what would right thinking people of the community see as appropriate stewardship in this particular situation so I guess that's what is right at Governance Institute we look at the processes, regulations around authority which is exercise and controlled in a particular organisation and we also have what we call our four foundations or pillars of governance which are transparency, accountability integrity and stewardship so that's what you see as governance indeed and I suppose if I put another sort of layer to that I think it is the framework as the setup that enables the business to run or the organisation that has that starts with the values and the integrity as you talked about it then goes to the policies and the principles and it then goes to the processes so you know it's not just a one simple box to tick but once you've got that overarching framework that a business or organisation can run then you can have an ability to deal with any particular matters on that basis so it is the personal, it's the policy, it's the processes but it's putting it and it's integrating all of those into one package that is relevant for your business because the other thing is governance it's not a one-stop it actually needs to be applied to each individual organisation and it will be different with each organisation and I think of governance I guess broadly as a tool and I do an analogy to when I was younger and fitter and competed in triathlon governance for companies is like I wasn't good I wasn't fast but I completed governance for me is like breathing when you're exercising it's an essential requirement but depending on whether you're swimming or riding a bike or running the way you breathe is different and governance needs to be like that for an organisation it's like an organisation in taking oxygen and exhaling carbon dioxide and you need to work out the most effective way to do that so the organisation achieves its objectives governance is not an objective and by itself it's a tool for the organisation's objectives I like the analogy I like it we've had a couple of questions around how you come from for example the skill set as a marketing communications professional based in regional Queensland a very fine place to be based I have to point out and how do you break into a board role or into a committee or board role Queens I think that that could apply generally for people living in regional areas and of course government boards are quite often ones that people first look to because they have to have a proportion of people from those areas and that leads me to the second area where someone was talking about how if you're on a government board how do you sit on a commercial board can you sit on a commercial board and if you're on a commercial board how do you sit on a government board so there's quite a lot of questions around how you move and where you sit does geography come into play is it harder to get known as a marketing professional living in Emerald or someone like that Well it's interesting Claire the new premier Anna can't say her last name Thank you in Queensland just announced last week I believe that she wants 50% of women on government boards sorry 50% of members of boards to be women a substantial increase from the current so perhaps being in regional Queensland is the right time right now to start your board journey and regional I guess I'll probably defer to Leah to talk about whether there are opportunities particularly in indigenous boards and you've been on a rural GP board too I am currently on a rural GP board yes indeed I mean I've always had a I guess a rural and regional focus in the work that I do because I grow up in the country and I think there are particular attributes of people who've grown up on a property and I think there are some real strengths in that that you can bring to a board go you country girls and I also think that there are a range of opportunities in regional Australia in a whole raft of areas there's state government, there's federal government there's local government there are a range of local tourism associations, industry associations I could think of probably 10 different opportunities if you're regionally based and also there are opportunities beyond that where your location is not the most important thing I've travelled to a large number of places for board roles that I've been on and the key aspect is not where you are but the value that you can bring and the match that you have in the recruitment process there are some aspects around hard skills that we've talked about but there are also aspects around experience and what you bring to the room and having a regional rural remote experience brings a different characterisation to what you can add in the room it's part of the diversity it is and I think one of the key things there is that you'll end up on boards where you've got the heart where you've got a genuine interest so talking about this transition from a rural or not for profit to government to commercial there's no easy path and it's not as though one is going to lead to the other and there's a bit of this notion I think that if you do a regional or rural somehow we're all going to emerge on ISX100 boards the reality is that's not going there's not enough spaces that's not going to happen you know number one make sure as to what your objective is going to be but the other thing is there is a need to do time and get involved there's notion that the world is right for as many people want to become new directors it's hard yards let's you know not delude ourselves to think that it's an easy path people need to be patient you need to do your time and build your skill set and that's where getting something whether it's in a rural area whether if it's not for profit or whatever of the government it will take time build and learn that will create the opportunities that will get you known in a variety of different areas but I would sit back on this and say what do you really want as a director directorships come in a huge variety of different sizes shapes and objectives I think it's most important that whatever you do you're doing it from the heart you've got to be able to make the contribution it isn't a one an easy path to go you will create that yourself but be prepared to put in it is no different to an executive career it's like making a career jump in an executive world making a career jump from exec to non-exec also and Janet and I have talked about this before if you take the view that you're going to be on some regional and remote board and you know I slog it out for a couple of years and then make it to ASX100 you could end up doing more damage than good because if that's your intention your capacity to assist that board might be limited and particularly with indigenous organisations if you think sitting on an indigenous organisation board for a couple of years is going to lead to career opportunities you actually will be doing yourself in the community an enormous disservice and so I think people need to be honest with themselves about their career objectives but if you're planning to be on a not-for-profit board a regional remote board an indigenous board you need to be doing that because you've got a heart for it and you want to make a difference my indigenous community boards I wanted to make a difference I was there because I wanted to close the gap improve indigenous health and I wasn't there thinking if I do this I'll end up on an ASX100 board and people can tell what your true motivation is so separate the heart and the commerce if you need to and don't think about your career as using not-for-profits to get a financial outcome in the end and of course we've always got the teleconferencing option don't we you don't have to rush off to board meetings all over the country with the not-for-profits I think also that there are a number of very large not-for-profits and I think we talked about this at a women on boards event that there is almost this label that if you get the not-for-profit board first then you can use that as a stepping stone well there may well be the not-for-profit board like a world vision or something is so large that actually that might be the destination for some time and as you say you don't want to you want to contribute as much as you can and not have this using it as a stepping stone approach but I think that's an interesting point because a lot of people ask that and there is sometimes people saying you shouldn't do a not-for-profit board because it will somehow damage you well get labeled as not-for-profit there's a lot of quality not-for-profits out there there's a large number of health funds a large number of organizations a lot of the university sector there's in fact some enormous organizations that come under the banner of not-for-profit David Gonski is particularly passionate about them many ASX directors in fact all have a good have a not-for-profit I guess the difference is people often think about it as community boards versus the larger not-for-profit sector where they're often running housing associations and those sorts of things and the interesting thing there is to think of maybe as a step is not-for-profit profit for members and that's you know the home mutual sector and that's where the situation funds where the credit unions permanent building societies I mean there's a range of insurance companies and again it's there is a need to actually make a profit in those business but it's is it the same as a commercial level so each of these are valid strategies just the quit what I would say is question yourself where are you wanting to position yourself for a period of time it's more about the skill set and experience rather than necessarily thinking there is a pathway or a journey it's you've got to work out what your outcome is because industry bodies fit into that area and yet a very large have significant turnovers and manage quite complex businesses yes we have over 7000 members you know we have a significant revenue with serious business of three streams of education membership and training and professional development where Australia-wide we've got offices in each state so you know it's not a straightforward business and we try to run it like an ASX listed business you would hope that the governance institute has good governance and we publish an annual report every year which some not-for-profits don't they might do a shorter review or just an information statement so I would say that if you it is definitely an opportunity in not-for-profits but to go back to Janet's point about having a pathway and having a strategy I think for old aspirational directors or anyone in a director journey it's very important to sit back and have a strategy and say well what is my desire in my directorship journey where would I like to go what areas interest me what companies do I think I can contribute to or what regions or what types of areas like Leah mentioned rather than just oh I just got to get on a board and it kind of seems to be quite fashionable at the moment oh I want to be a director and I think that goes to really understand what the potential liabilities are or risks as well as the rewards it can be extremely rewarding but you need to be remembering about joint and several liability and the like. Which brings me to the next question because we now have the magnificent Australian charities and not-for-profits commission which the government has retained and women on boards is a very strong supporter of the ACNC it has found that clarity around good governance is not really permeating the sector and more importantly that some of these issues a quarter of the concerns raised were in fact by charities that have revenues of more than one million dollars and so sometimes there can be some questions around compliance and around governance in the not-for-profit sector why do you think that is I think one of the interesting points about the complaints in the ACNC report is that while there were high percentage that relate to organisations that were larger if we think about the data on the touch points of larger not-for-profits I think that may explain some of that so for example Mission Australia interacts with an enormous number of Australians it's a very well known name so therefore people notice it and are more like that a comment on the work that it does in a charity out of my home where I just collected money and bought myself fabulous clothes it may not interact with many people and I may get fewer complaints but what I'm doing is actually appalling I'm not really doing that obviously it's an example but I think the situation that we have in the not-for-profit space is it's evolving and we have people who are on not-for-profit boards who are often in environments where they're very resource constrained they're doing the best they can and they need some guidance and some help and I think the environment will improve significantly I think we're on a pathway and I think if we look back at listed companies in the early 90s I think we're on a similar pathway would you agree? I would in that if you think about when the ASX Corporate Governance Principles were introduced back in 2003 and you look at how far we've come went out to the third edition and I think the level of governance and the level of quality of reporting and the quality of ASX listed companies and what is expected by the community has risen exponentially and I think the ACNC is wonderful in that it's kind of starting that journey now with not-for-profits by introducing these seven governance standards having them report against them having the first report come out it's really as Leah has said it's the beginning of the journey and whilst it is a bit concerning what's come out of the report I wasn't that surprised about it in that you're a number of not-for-profits directors they're not remunerated they're doing it because they're passionate about the mission of the organisation or the cause and they might not have a background where they've ever had any governance or even an understanding of administrative functions risk or finance or legal so they're I guess they're eager amateurs if you like and perhaps part of the great work that ACNC does is that it has illuminated these issues but also gives them direction in terms of well perhaps you could do some training in this regard or gives them guidance we also offer guidance in terms of good governance guidance which are freely available on our website and there's lots of tools and I guess it's about the education process and this is why it's important that the ACNC is retained You're a chair of a not-for-profit and does it take as much time as being on White Home Capital for example does it take as much time? It does I'm treasurer there and chair the finance committee not chairman of the board it does take the time it probably takes more time from the heart part of it is also taking it on the journey and I think one of the challenges that has come out of the most recent ACNC report and circling back to comments earlier about working with volunteers and paid staff is I think there's a realisation a lot of not-for-profits that not everyone is going to have the right role by sitting on the board one of the things that we're seeing as you alluded to there's a learning journey and an education but it's not for everyone and I think one of the most difficult challenges you're going to find for a number of not-for-profits is actually working out how do we best harness the opportunities of the volunteers how do we maybe work with some people who aren't understanding director skills maybe you don't get that to say there are a variety of different ways that we can use those skillset and volunteers because it is not everyone can come up that learning curve because a lot of people have come to the table because of what they've done in the organisation as opposed to actually understanding those directors responsibilities financial responsibilities those things still sit there whether you're a director of a not-for-profit whether it's a government board whether you're a commercial board that's I think a bit of a light bulb that probably a number of not-for-profits a number of organisations the organisations may have but whether it's come down to all the people sitting around the table I'm not sure and I think that's one of the biggest challenges for not-for-profits probably over the next year or so and I think that goes back to the point about a chair having quiet words to certain individuals and also succession planning and board composition generally which we haven't really had a chance to talk that much about but you're smiling clear I was just asking how do you get rid of a non-profit it's a diplomatic way of saying it it's a 10 step process so yes, how do you get rid of the non-performing board member, panel well I think you probably have a quiet word to help them aside a five side trash or something like that might be a nice way to start but it is sometimes challenging if somebody doesn't want to leave and they've got the right to stay what do we do, you know and that can be very hard on not-for-profits and I found it in things as well and look I think that again comes to your governance framework at the beginning it talks about setting quite clearly what the bar is what are the expectations of directors what's the requirement there is no reason why not-for-profits are any different from doing performance reviews I mean the needs to be that framework of continual review assessment it may be if things have changed finding other opportunities or roles but it does coming to have the honest conversation you know and in that sense it's no different to a range of other roles if people are there by virtue of though of an election process or a nomination process then you may be constrained but that's to then I would say the chair finding the right role for that person so that they can contribute in the way they think and not be a constraint on the overall board performance which speaks to terms for directors which in fact was raised in the last revision of the corporate governance principles and recommendations and quite often a lot of boards don't have any terms and you suddenly turn around and find someone who's identified with that organisation and they've been there 20 and 25 years so what are your thoughts on terms I think we need to be flexible around the issue on term limits I think there are some extreme examples I was asked if I would assist an organisation and the chair had been chair of that organisation longer than I've been alive so I felt that was a long term appointment and you know there are some challenges that go with that and I think when we talk about underperforming directors I like to think about when you're starting the journey you need to talk with the end in mind so in appointing directors we need to talk about what is the time frame we expect you to be on this board it is not forever that there is a board that anyone should be on forever and have honest conversations about we'd like you to contribute for between 5 to 9 years and then we would like you to open up the opportunity for others to contribute and I think that conversation in ongoing way is important I think on term limits you need to balance out the requirement for retaining some knowledge around the organisation and the history in the room but also getting fresh eyes and fresh thoughts and that balance is just about a good succession planning model you may lose directors that you weren't planning to lose and you need to be flexible around how you have the right skill set, the right history there is no formula that is perfect my view is if you have been on a board for 6 years you should probably be thinking about your exit strategy and how you will ensure that the board and the organisation will be well served by someone who can replace on one of my boards I've bought someone on who will be a replacement for me in 2 years time and I'm hoping 2 years will be an apprenticeship period that will allow them to then show leadership and I think if you have been on a board for 9 years you need to start thinking about whether you could add more value elsewhere one of the challenges I think especially in some of the not-for-profit sector is at the other end of the spectrum people have terms for 1 year or so and that can be equally as constraining on the growth of the business so I think your point on terms needs to be looked at in terms of holistically what the business can be about and a comment that I would make to people thinking of going on the director journey it is a commitment when you take on a directorship this is not one where you can go look this is the right one for me now I've got a better opportunity in 6 or 12 months time I just want to think about choose carefully because you need to be able to make an ongoing commitment so I think organisations need to have that right combination of terms and length of terms but individuals need to have that mindset as well because it goes to your integrity as a director and it is the one where circumstances will change but people need to make the commitment the organisation needs to make the commitment so I think both ends of the spectrum at the moment Excellent I'm just going to go to the questions one from Mary who asked about monetary and non-monetary rewards from being a director that is a very long and involved answer our getting started in fact looks at that issue the short answer is there is no definite answer some of them are fixed salaries some of them are per diem depends on whether it's government finance committee and don't pay the directors some reward them in other ways sports bodies for example will often send you to where the team is competing so it's a long answer but the big thing that you should do is ask how directors are compensated how they service their directors in terms of looking after directors some organisations will send directors on training and those sorts of things so I'm going to short-circuit that one by answering it Rebecca Ramsey asks and I'm going to ask you for a quick comment what about if you're in an organisation is it common to shift from being an executive director to a non-executive within the same organisation now I would argue that probably only on subsidiaries perhaps would that happen or on private companies and it's more common in Europe than it is here wouldn't you say I would agree with that and I think it's interesting actually I think when that does happen in listed companies sometimes people agitate for change in fact that has happened with Karun Gas where there's been some shareholder activism where they've said we've got the family to involve still has been the argument they haven't been successful but they've said it's probably not appropriate to have the CEO be the son of the chair and the kind of movement from executive director to being also a director on the board so independence is important independence is very important so I think it's quite unusual to move within one organisation there'd have to be the passage of time I think recently there's been some cause for Roger Corbett to come back to be on the board of Woolworths after being CEO or something like that and there was some concern about had enough time being passed so there are exceptions but I think the independence argument would you both agree with that? I'd agree I mean the key thing is what are the roles of each of those if you've got the ability to have the transition you probably need a passage of time it's not a one-stop stop on the whole thing but I would suggest it's a hard transition private companies are the interesting one I think it's a really difficult transition for most people from an executive role to a board role it is a really different skill set it's a really different interaction and I think for people sometimes separating from where you have worked as an executive will serve you better in developing a new skill set I'm going to ask everybody just to sum up now on balance do the rewards of being a director outweigh the risks and responsibilities and would you recommend directorship to others Trisha? I certainly think that the rewards do outweigh the risks I think it's an incredible experience with amazing people and learning about organisations you just have to be doing it for the right reasons which I think we've talked about quite a bit absolutely but it's about choosing your portfolio and what your personal objectives are it's not the rest of the world's objectives if it's right for you I would go for it, I have and I agree I mean I love being a director and I think that the rewards definitely outweigh the risks like most aspect of risks the more you understand the risks and the more you know how you are meeting expectations the more you will feel the reward so if you think if you understand what is required and you can do a great job of it then the rewards are awesome Thank you and I know you can't applaud but I'm sure you all are so I'm going to thank the panel of Trisha Mock, Janet Tawny and Leah Fricky on your behalf The transcript from this webcast will be available afterwards I noticed that one or two of you were having difficulties in accessing it so please don't worry you will be able to see us all again those of you wanting to watch us all again of course can and you will be receiving some follow up communication too I'd just like to particularly thank Redback Conferencing for the opportunity I'd like to thank Governance Institute of Australia and of course our own organisation for making this available to you so I wish you all a good afternoon and thank you very much for attending