Christopher Niesche speaks to Lisa Chung about the changing face of the not-for-profit sector and the increased emphasis of diversity in the workplace.
When Lisa Chung FAICD left school, she was planning a career in international relations or foreign affairs, perhaps triggered by a high school study tour to China just as it was opening up to the West.
She was lined up to study law and Asian studies at the Australian National University, but for reasons she can’t remember decided to stay at home and study law at the University of Tasmania.
“That’s one of those decisions that you don’t realise when you’re making it, particularly when you’re 17 or 18 years old, that changed the course of my life,” says Chung, who had studied French, German and Japanese at school and wanted to learn about other cultures.
As it happened, Chung pursued a successful legal career in Tasmania, then in Sydney and went on to take a range of non-executive directorships at organisations including APN Outdoor Group and urban planning and design company URBIS. She is deputy president of trustees of the Museum of Applied Arts and Sciences, which runs Sydney’s Powerhouse Museum, and chairman of The Benevolent Society, Australia’s oldest charity.
Growing up in Tasmania, Chung spoke English and Cantonese at home. Although she is a fourth-generation Australian, she is the first born in Australia, because like so many other Chinese families, her family moved back and forth between Australia and China for many years. “That’s no longer home now for my family, so that shifted in my generation.”
Her great-grandfather came to northern Tasmania as a tin miner, then moved to Hobart to start a market garden after the mines closed. The business closed about a decade ago and the family has also diversified into owning property.
After her degree, Chung joined a local firm in Hobart and after five or so years at the firm she decided it was time for a change. “I’d become a partner there quite young and I got to a point where I thought ‘That’s it now for the next 30 years’,” she says. “I was married by then so my husband and I both moved to Sydney – really in pursuit of different job opportunities.”
She had ideas of making a career swap that would allow her to pursue her interest in other cultures and international relations, but joined Blake Dawson Waldron (now Ashurst) as a commercial property lawyer at the start of the 1990s and kept on with the law. It’s not a decision she regrets.
“It is a very enjoyable profession. It’s quite fulfilling. It’s intellectually very stimulating. I think people do get into it and then they find a niche and they find a path. It’s rewarding in many ways,” she says.
She became a partner at the firm – unusually while she was on maternity leave – and enjoyed 20 years there, as a practising lawyer and in senior management roles. She then moved to Maddocks after receiving an offer to establish a property practice and although she no longer practises law at the firm, she remains a consultant.
“The thing about the law – and practising law in a law firm in particular – is you are working with very like-minded professional people. They’re usually people who are highly intelligent and who are very committed to what they do in terms of their expertise, the intellectual engagement and working with clients. That collegiate common endeavour is quite a powerful thing in law firms.”
Chung says that when lawyers join a board, they shouldn’t be doing so as a lawyer – if the organisation needs a lawyer it can hire one. Instead, she says, there are many skills that lawyers can bring, but they can only make a contribution as a director if they can combine those skills with the core attributes needed to be on a board.
“Lawyers are quite analytical; they are good at understanding and assessing risk in quite complex scenarios; and where there are a lot of facets around a factual situation or circumstances or context, lawyers are good at unpacking those quite complex fact scenarios,” she says.
In particular, directors need an understanding of the organisation’s business and the sector in which it operates, and these are skills which lawyers have acquired in recent years. “In order to be an effective and a sought-after lawyer in the market these days, you really have to be able to understand your client’s business, you need to be able to translate the law into the context for the client,” she says.
The Benevolent Society
Chung joined The Benevolent Society board in 2011 when a colleague was approached to join. The colleague didn’t want to take on any further not-for-profit (NFP) boards so suggested Chung.
“Strangely enough they were looking for a lawyer with some property background because of a particular project that we had on at the time. I met with the chairman and one of the other board members and it went from there,” she says. Egon Zehnder conducted the search, as it continues to do for The Benevolent Society today. Chung had experience on other NFP boards and was serving on the Australian Institute of Management board at the time.
The Benevolent Society is one of those names that many people are familiar with without necessarily knowing exactly what it does.
Founded in 1813 by leading business people who saw a need among destitute women and children, The Benevolent Society essentially became the country’s welfare system, which wasn’t provided by government at the time.
Its work was pioneering, such as running institutions that provided accommodation and support for unmarried mothers and enabled them to keep their babies with them; advocating for the old age pension which was the first of its kind in the world; and setting up the first maternity hospital and baby health centres.
The Benevolent Society’s vision is for “a just society where all Australians can live their best lives”, and it aims “to empower and educate for personal and societal change”.
Its day-to-day work has a two-pronged focus. The first is on-the-ground support services for children and families in aged care, respite care and in educational support.
It is also one of the four founding NFP organisations that anchored the buyout of ABC Learning Centres, now renamed Goodstart Early Learning.
The Benevolent Society is the issuer of one of only two social benefit bonds that the NSW government has sponsored. These bonds are a relatively new and innovative way of raising capital for programs which address important social needs.
Private investors provide capital to a service provider to achieve improved social outcomes. If these outcomes are achieved, the cost savings to governments are then used to repay the upfront investment plus a dividend.
The Society’s second focus is on advocating for changes that will benefit its clients and broader society. The Benevolent Society follows a broad governance model rooted in the ASX standards, although not all listing rules are relevant to NFPs. Chung says the Society was ahead of many listed companies in recognising the need for a skills matrix when determining board composition.
Chung says the matrix addresses the strategic and financial skills that many other boards also seek, and also requires directors who have a strong background in the sector. The board always has two or three directors with expertise or experience in the community and charity sector, perhaps from academia or with long-term service delivery experience, for instance in children’s services or in-home ageing.
Line of distinction
There are three key issues that distinguish the governance of an NFP such as The Benevolent Society from that in a commercial company, Chung says.
While all companies are concerned with the issue of reputational risk, the nature of The Benevolent Society’s work with the most vulnerable in society and its impact on the community put it in a particular position of trust and responsibility. “If we fail in discharging that responsibility or breach that trust, quite rightly the consequences would be extremely serious for the organisation,” she says.
Secondly, because it is a mission- and purpose-driven organisation, the Society must always behave to the highest ethical standards, not simply comply with a legal standard.
Finally, it has a broad range of stakeholders, including the clients and communities it serves; the government both as a funder and as a policy maker; donors, sponsors, members and other supporters; staff; volunteers; partner organisations and philanthropic foundations; colleagues in the sector; and society more generally. “We have inherited a legacy built up over more than 200 years and we are responsible to those who have gone before us to continue to deliver on our purpose,” Chung says.
Funding aged care and disability care is progressively changing, from one of block funding providers to funding the individual users of the services, who can then allocate the funds to where they need them most. This moves the care system from being supply-led to demand-led and will also give users of the system more say over their care. Chung says organisations are preparing for the transition, but they also have to help their clients prepare.
“That is a real game-changer and has opened up the sector to for-profit organisations entering. With that comes challenge and competition around bigger cheque books, more resources and more sophisticated infrastructure,” she says.
“Our focus is on the disadvantaged and marginalised. So, it’s a question of how do we maintain those services appropriately for people in that stratum of society if the more profitable sector of the market is getting picked up by for-profit organisations?
“There’s complexity in how that’s all going to play out and how ultimately the new funding model will enable us to continue to serve those in greatest need. We have just signed on to a new strategic plan and undertaken a major organisational restructure in preparation for the changes.”
Fundraising from the public is always a challenge, with the large number of organisations seeking the charity dollar and the need to be constantly coming up with new fundraising ideas adding to costs.
Historically, most of The Benevolent Society’s funding has come from government and from philanthropists and private foundations. For instance, the Society’s research, evaluation and service development arm might devise a particular program, which it believes can be effective, often around early intervention to try to head off a problem.
“We might go to one of our major philanthropic partners and say that we would like to run a pilot on a certain program. ‘This is what the research is telling us. This is the evidence. We’d like to run a trial on it to build more of an evidence base’,” says Chung. In terms of funding its advocacy work and innovation, The Benevolent Society is in the fortunate position of having a significant endowment fund, which was started with the proceeds of the sale of the Royal Hospital for Women site in Sydney’s Paddington.
A few years ago it was topped up with the sale to Mirvac of a site in Bondi after planning authorities quashed the Society’s plans for an innovative residential aged care facility there.
Chung’s other NFP board position is as a trustee of the Museum of Applied Arts and Sciences, which runs Sydney’s Powerhouse Museum, and she says she enjoys the contrast with her work at The Benevolent Society.
“It’s quite a different remit. It’s really at the other extreme. Its focus is on the arts, science and human ingenuity,” she says.
The opportunity to work in a creative space is very attractive, says Chung. The museum has recently established the Centre for Fashion which she chairs and which draws on its 30,000 historical fashion items.
“Apart from being exhibited to the public, it serves as inspiration and engagement for people working in that industry now. You’ll often have designers or fashion students come in for research purposes or to use the collection as a source of inspiration for a new collection that they might be designing,” she says.
She has been on the board of APN Outdoor since it listed in November 2014, and that provides a whole other set of challenges and interests, not the least of which is the way in which technology is changing out-of-home advertising.
The digitisation of outdoor advertising has helped the company outstrip the growth of the overall advertising sector. “You don’t necessarily have guys up on ladders putting up the billboards anymore,” says Chung.
“The content can be quite different. It can be put up and changed at short notice. It can tell a story. It can be time-based. It can accommodate quite a different level of creative. We also have digital innovation around smaller screens in railway stations and, at the same time, other forms of media advertising have lost market share.”
The Society’s share price has surged from $2.55 at the initial public offering to as high as $7.30 in June this year.
Chung says that outside of her board work and work at Maddocks she enjoys spending time with her husband and children aged 19 and 21.
Broader family is also important, which Chung says comes from her cultural background. Her three sisters also live in Sydney, so every Sunday night the family gathers at one of the sisters’ houses for dinner.
“We all descend on the house of whoever’s turn it is to host. It’s a bit of an eat-and-run. Dinner’s on and then we have a good chat and we usually leave two-and-a-half hours after that. That’s a ritual that the whole family enjoys.”
She is also an enthusiastic traveller, describing herself as a Francophile. “They’re quite formal, the French. I like that – knowing what the rules are and knowing what’s expected and so on. I love their pursuit of excellence when it comes to their cultural activities – whether it’s food or wine or art or design or fashion,” she says. “I love their general philosophy of life. They pursue excellence but they also understand the broader context of life and the importance of how you live your life. I think that’s what attracts me to it.”
Chung started out wanting to learn about diverse cultures and instead ended up enjoying a three-decade legal career. But the story doesn’t end there.
“I’ve come full circle now. I think the issue of cultural diversity has finally come on to the agenda this year,” she says, adding that she is often asked to speak on cultural diversity at various events. She highlights Australian of the Year David Morrison’s acceptance speech on gender equality, diversity and inclusion as an example of how the issue is being talked about.
“I’ve been thinking about diversity at so many different levels. The diversity of sectors in which I work and which I absolutely love; I’ve learnt so much from having been exposed to that.
“Diversity in whatever guise is, I think, quite empowering and energising, partly because what you learn in one sphere you can apply in another.
“The fact that I have the benefit of diverse experiences – whether it’s by reason of sector, gender, or culture – is more powerful to my thinking today than the 30 years that I spent in the law,” Chung says.
Lisa Chung FAICD, director of the Benevolent Society is a featured panellist at the ‘Taking your NFP from good to great’ session at the 2017 Australian Governance Summit.
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