An increased need to communicate, respond to complex questions from stakeholders and create an inclusive boardroom environment are just some of the demands placed on the chair of today. Several chairs appointed in recent years reflect on the evolution of expectations and how to apply their skills.
The skills required of a chair are changing. The organisations they oversee are operating in an environment of rapid change, with technological disruption and new competitive threats. They are dealing with the ongoing fallout of the COVID-19 pandemic, with some businesses still recovering and others having permanently shifted their business models, as well as ongoing supply chain issues.
Stakeholders will look to chairs to oversee their organisation’s response to climate change and the decarbonisation of the economy, as well as to ensure their company meets other environmental, social and governance obligations, such as complying with modern slavery laws. Related to this are heightened community expectations that companies have a purpose beyond making a profit, and a wider range of stakeholders to contend with, including activists, the community, employees and proxy advisers.
Inside the boardroom, chairs are managing a more diverse group of directors and executives, with backgrounds and experiences different to their own, many of whom are looking for a different leadership style from the more formal chairs of the past.
New skills are required to navigate these challenges. Chairs need to be comfortable with uncertainty and with being challenged. They need to be able to communicate effectively to diverse groups of people — and to listen. They need the emotional intelligence to draw out the best of their board and to support the CEO. At the same time, they still need the chair’s traditional skills, such as a knowledge of governance and financial accounts.
“If you go back 20 or 30 years, it was probably a retirement job,” says Jacqueline Hey GAICD, chair of Bendigo and Adelaide Bank and a director of Qantas. “These days, that’s a very big job. So you need to go into it saying this is my next career not this is my retirement career. Chairs need to listen and to reflect. They need to be comfortable with the unknown. They need to seek out stakeholders who don’t necessarily agree with what they’re doing and reflect on that feedback. They need to be curious. They need to be long-sighted. They need to be across the detail.”
Susan Forrester AM FAICD, chair of online health platform Healthengine and lottery company Jumbo Interactive, agrees that expectations of chairs have increased exponentially. Where once the rule of thumb was that the chair did three times the work of a non-executive director, Forrester says they now do four times the work of NEDs, who in turn are working twice as hard as they used to. She ascribes much of the increased workload to the changing way in which the board supports management and the different ways meetings are conducted.
Meetings have shifted from the rigid template of sending board papers out to directors seven days before the meeting and then working through the papers during the meeting itself. Now, meetings are much more dynamic and will instead have more focus on what’s preoccupying the CEO and their team and how the board can support them.
“It’s an altogether different skill to chair a Zoom meeting and to make it effective as a face- to-face meeting,” says Geoffrey Kiel FAICD, chair of consultancy Strategic Governance, an emeritus professor at the University of Queensland, and an AICD facilitator. “You’re not in the room. You can’t really read the body language to anywhere near the extent you can read it actually [being] in a room. You’ve also got the issue of just acknowledging people to speak and controlling those dynamics.”
Forrester has adopted a “Netflix-style model” for the board meetings she chairs. Management reports remain an important tool for monitoring performance, but are circulated before meetings and taken as read by the time the meeting comes about. In the week before the meetings, directors can log onto the board portal and post questions for management. Based on the questions and her conversations with the CEO, Forrester comes up with the three big issues to be discussed at the meeting. “It’s far more dynamic and people actually feel like they’re contributing to critical issues rather than just saying, OK, we’ll now move on to Agenda item 5.4 (b) being the CTO report at 2.45 in the afternoon,” she says.
It also frees management from the endless cycle of preparing board reports and instead has the board helping to solve their problems.
Patricia Cross FAICDLife, chair of payments platform OFX and a member of the Future Fund Board of Guardians, says the style required of a chair has moved on from the “presidential role” where they directed the board. “Effective chairs are individuals who draw more on their inclusive natures and go out of their way to get the best out of everyone and don’t always walk into the room having already decided something. They are genuinely there to figure out how to get the best out of people and to create an environment that achieves that — given the individual circumstances of where they are.”
Achieving this requires softer skills, which chairs might not have developed during their executive leadership careers. They need to create a psychologically safe environment for anyone who walks into that boardroom, and create mechanisms for people to communicate openly and freely, both inside the boardroom during board meetings, but also outside, says Cross, describing as much a personality type as a set of skills. “A good chair wants to be told when they’re wrong and even if the chair is not, if directors feel like the chair is not allocating the right time to stuff, they need to tell them. That’s why you’ve got to have this really safe relationship with everybody you’re working with.”
The worst of the COVID-19 crisis has passed, but its effects on the way chairs do their job are lingering. At the peak of the pandemic, organisations were grappling with situations and scenarios they’ve never previously experienced, and boards and the C-suite worked closely together, communicating in some cases daily about the next steps.
“You’ve seen the chairs and the board facing into those challenges with the executive team and really helping them to confront ambiguity, crisis, culture within the team,” says Alexandra Goodfellow, vice- chair Australia at executive search firm Korn Ferry. “A lot of board meetings probably went from the traditional once-a-month and various committee meetings to two or three meetings a week, and then probably a lot more conversations between the chair and the CEO behind the scenes.”
Goodfellow says things are returning a little more to normal, where boards are stepping back a little from the operational focus, but David Gallop AM GAICD hopes that the spirit of cooperation will continue.
“I’d like to think many good collaborative habits were a by-product or formed during those stressful times when no-one could accurately say what was around the corner — for your business or the community,” says Gallop, former CEO of Football Federation Australia and the NRL, and now chair of ASX-listed underwear company Step One and online medical services provider MOSH.
The rapid shift to online business models during COVID-19 also required chairs and boards to get on top of new capital expenditure or projects more quickly than before. A fragmented working structure with many staff working from has endured, which requires the chair to help the CEO promote a sense of collaboration and sense of purpose for the team. This, and other communication from the chair, needs a new style, says Gallop. “Gone are the days of a ‘note from the chair’ drafted by the corporate affairs team. Employees, directors and stakeholders appreciate a genuine note actually drafted by the person it is from.”
Technology for virtual board meetings, and chat and messaging platforms, have made contact within the board and with executives more frequent, and given boards more ability to respond to events as they happen. “The days of waiting for the once-a- month board meeting are over,” says Gallop.
For the chair, this means deciding whether an issue needs a chat with the CEO, a phone hook- up with the board or whether it can wait for the scheduled board meeting. “You’ve almost got to be a 24/7 filter for how the organisation is going to deal with issues as they come up,” he says.
Boards are slowly becoming more diverse, of gender, race, experience and background. While this mightn’t be happening as quickly as some advocates would hope, it does raise new challenges for chairs. “You’re no longer with people who sound like you, talk like you and have the same background, therefore, you have to be much more open to discomfort because they’re not the same as you,” says Dr Judith MacCormick FAICD, CEO and founder of BoardFocus Advisory and an AICD facilitator.
Chairs can’t look at things personally. They need to put their egos aside, synthesise the various arguments around the boardroom table and draw the threads together to come up with something that probably no single individual has actually raised. MacCormick describes it as a “helicopter” perspective that can accommodate a range of different views. “That’s the sort of generative outcome rather than just a consensus or just a synthesis,” she says.
Outside the boardroom, chairs are answerable to a much wider range of stakeholders than previously, thanks to the rise of ESG, activist shareholders and changing community expectations of the corporate world. Some of these will require different communication styles. Additionally, chairs are expected to take a more public role and to be more proactive in meetings.
“From a chair’s perspective, being able to manage a very diverse range of stakeholders with a very diverse range of inputs — and within the board, the trade-offs and balances, and the choices that you invariably need to make — it is harder these days than it was in the past,” says Hey.
As a result, boards, and in particular chairs, need to be very good at listening, absorbing and reflecting on information. While dealing with and talking with like-minded people is easier, it’s not the right approach for the company or for society. Chairs are leading in an environment where there can be constant crises happening at any one time, says Goodfellow. This extends to the way they and their boards need to think about risk, not just in a negative sense, but also in a positive one. They need to be courageous, even in a more stringent regulatory environment. They’ve got to be looking at risk in terms of the company’s potential. Does it evolve into other markets in terms of diversifying or does it just do the same in different markets? Where is the competition going to come from?
“They’ve got an inquiring, contemporary view of the world and are happy to guide a CEO and a leadership team in terms of a roadmap where there’s so much ambiguity,” says Goodfellow. “What we find from really good chairs and boards is that they do have people around the table who have a learning mindset. They might come from different perspectives on the issue, but they’re inquisitive.”
Gone are the days when the chair could attend board meetings and dinners, interact with the C-suite, but be invisible to the broader company. Employees are now considered as another stakeholder group for chairs to take account of. Chairs need to effectively communicate to employees the path the company is travelling, encourage people to respond with their own opinions, and be seen to be listening to them, says Goodfellow. “If employees can relate to the board and the chair, and have a better understanding of where the company is going, not only from a commercial perspective, and it is reinforcing their sense of purpose, there’s great benefit in that.”
Bruce Akhurst FAICD
Bruce Akhurst was presented with a rare opportunity to remake Tabcorp when it spun off its profitable Lotteries and Keno division earlier this year. What was left was an underperforming business comprising TAB, Sky Racing and MAX gaming services.
“We needed to change from this retail, old- fashioned, pay bets in cash over the counter scenario to something much more focused on what customers do today, which is interact online and through mobile devices,” says Akhurst, who became chair of the slimmed-down company in June. “You don’t get many opportunities to have a really well-established company like Tabcorp and redo the board, redo the culture, redo the management and get a new direction.”
In a switch from the lawyers, accountants, bankers and advisers who have traditionally made up boards, he recruited board members with executive experience in digital and technology, including senior Google executive Karen Stocks MAICD, digital marketing expert Janette Kendall FAICD, Brett Chenoweth, former CEO of APN News and Media, and David Gallop AM GAICD, former NRL and Football Federation Australia CEO.
Akhurst says the board is a lot more focused on how Tabcorp can be relevant to customers and win in the market at the same time as being a responsible gambling company.
“We’re all there trying to coach the management team rather than find fault and trip them up and expose defects. They have to execute it, but we’re cheering them on and are engaged all the way through.”
He is in frequent contact with CEO Adam Rytenskild MAICD, and encourages other directors to talk directly to senior management if they have an idea or perspective, so long as it doesn’t undercut the CEO. In conjunction with more frequent board meetings — sometimes in a TAB pub rather than in the boardroom — it means directors don’t have to be rebriefed about issues at every meeting.
Akhurst has done away with the “overly formal, rigid” tone of board meetings of the past and instead focuses on respect and creating an open and collegiate environment. If he notices another director hasn’t had anything to say on an issue or is espousing a very strong view, he’ll ask them for their view or to explain how they see the issue. Sometimes, the director needs more time to think and he or she will come back to them later in the meeting.
It’s also about getting the most out of the board and not missing out on the value of diversity by failing to learn from different experiences and perspectives.
“In the chair role, you’ve got to read the tea leaves a bit, and the mood, and whether people are on board or not,” says Akhurst. “They have to feel comfortable and safe being able to say what they think.”
Governance remains important and reports are circulated ahead of meetings and taken as read once the meeting begins. This means that if the board is considering the remuneration report, for instance, instead of poring over it in the meeting, the directors might question chief people officer Sharon Boadley about what she sees as the key points and open it up for discussion. Akhurst says they focus on discussing substance over form. “We really get into what’s going on in the business a lot more,” describing the new environment as much more demanding, but also energising and fun.
Chairs in the past might have been content to take a backseat on representing the company and appearing in public, but Akhurst feels he needs to both communicate and explain Tabcorp’s position on issues such as responsible gambling, equal taxation of Australian and offshore gaming companies, and the importance of advertising limits.
“It’s a much more assertive, engaged process than we’ve ever had before, which was a lot more passive,” he says. “[In the past] you inherited what it was and [had to] just go along with it and then hand the keys over to the next group. The world’s changed so dramatically and quickly, if we’re like that, we won’t have a business. So you have to be much more engaged, and much quicker and bolder.”
In August the company reported that pro forma revenue — which simulates the result as if the demerger had been active throughout the 2022 and 2021 financial years — fell 4.3 per cent to $2.38b.
Board 101: How to become a chair
Non-executive directors aspiring to a chair role should get involved in as many different aspects of their board as possible, such as committees, stakeholder meetings and site visits, says Jacqueline Hey GAICD, chair of Bendigo and Adelaide Bank and a director of Qantas. She notes the majority of chairs are recruited from the existing board, so it’s important to win the confidence of the other board members.
“I don’t mean taking over, but start asking the questions, building the relationship, extracting from other people around the boardroom table their thoughts,” she says. “Start portraying yourself in the way that gives confidence to other board members, so when it’s time to consider [if] you would be the right person to take the company forward, they’ve seen you portray those listening skills, those engagement skills.”
When Susan Forrester AM FAICD, chair of Healthengine and Jumbo Interactive, was aspiring to chair roles, she picked a couple of chairs who she thought did a very good job and noted how they performed. She also learned what not to do from chairs who oversaw turgid board meetings. “The ones I admired, I sometimes would even ask, ‘Look, could you do some mentoring with me? Could you give me some tips on how to go about it?’.”
Forrester also tried to chair board committees. “Usually, the good ones are happy to do it because they want that next generation to come through. And it’s not necessarily something you learn in a course.”
Peter Emery FAICD, chair of community transport operation TransitCare, and an AICD governance facilitator, says aspiring chairs should ensure they are always on top of the board work and board papers, make sensible suggestions and offer to help.
“In other words, not being afraid to get your hands dirty and show that you’re a good worker,” he says. “But you’ve still got to be the best person for the job.”
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