AICD’s CEO has had his feet under the desk for seven months. Here, he chats to Company Director about what’s been achieved so far, what’s in store for members and the intensifying challenges facing directors.
Q&A with John Colvin
Company Director (CD): What made you take your role as CEO of AICD?
John Colvin (JC): I took up the role for several reasons. I had had a long career in law and wanted to broaden my outlook. I was attracted by AICD’s great name and brand, the opportunity to get involved in public policy and AICD’s ability to offer what I consider to be world-class development for directors. I was honoured to be approached for the role.
CD: What has been accomplished since you joined?
JC: Each CEO builds on the work of his or her predecessor, but I believe that with the help of the entire AICD team, we have achieved a great deal in the last seven months, with many changes coming into effect.
In the area of public policy, we have released a series of timely policy items that have helped get the director’s voice heard among the community. Our Division Councils continue to ensure our work is carried out in a seamless manner throughout all states and territories.
Our Director and Board Development courses are extremely well attended and are continually being improved, including through the introduction of customised courses for boards of Indigenous corporations.
We continue to review our membership offering so that we can provide more targeted products and services. We also strive to be more responsive to our emerging directors, as they are the ones who will be leading organisations in years to come.
Our state divisions have held many timely briefings and events around the country, some of which I have had the pleasure of presenting at. I have enjoyed visiting the state offices and seeing first-hand how they work, helping wherever I can.
We have established the Chairman’s Forum, which will meet for the first time in Melbourne later this month and give chairmen of publicly listed companies the opportunity to meet and discuss a range of issues among themselves.
I visited Canberra in November last year to meet political leaders to discuss areas of concern to directors, such as director liability and executive remuneration. These meetings will continue throughout 2009 as we develop our relationships with these key policy and decision-makers.
The executive team is now also fully established. New additions to the team are Steve Burrell, general manager, Communications and Public Affairs and Marie Campion, general manager, Marketing and Member Services (and myself!). They join an already strong group that includes Rob Elliott, general manager, Policy and General Counsel; Maureen Monckton, general manager, Director and Board Development; Andrew Madry, chief operating officer; and Brad Sherringham, chief financial officer.
In addition, our board has become more engaged in corporate governance debates. We have also stepped up our media relations efforts, resulting in a vast amount of coverage in the press and also a few mentions on radio and TV.
Internally, we have also been working hard to refine AICD’s culture according to our strategy, creating a greater “can do” attitude and implementing initiatives to ensure AICD is a place where people want to work.
CD: What changes can members expect to see?
JC: We will soon introduce a number of changes that will increase the value of membership as part of our continued drive to be the home for the 1.9 million directors in Australia. We also intend to provide better services and more targeted communications to ensure we are relevant to all members.
In the member services space, we recently launched the Company Director Credit Card, in partnership with American Express; it will provide added benefits to members. Members can also expect to see ongoing changes to Company Director and The Boardroom Report, as we strive towards better meeting the needs of our readership.
CD: What do you enjoy most about the role?
JC: As mentioned, I was attracted to many aspects of AICD. I enjoy having the opportunity to make a difference to such a vital group in our economy – directors – at such an incredibly important time in Australia’s economic history, especially now with regards to the global financial crisis. My academic training and teaching, professional background in law and my interest in public policy mean I will enjoy dealing with the many debates that will occur, especially in areas like further regulation of directors.
CD: What are your biggest priorities in this role?
JC: There are so many things I would like to achieve and this is only possible with the assistance of the entire organisation. I would like to see balanced debates that provide the community with a clearer understanding of the important role directors in Australia play. Directors are the backbone of all segments of the economy, from not-for-profits (NFPs) and small and medium-sized enterprises, through to publicly listed companies and government business enterprises.
Current laws often do not distinguish between the broad range of directors that exist – although there are some glimmers of hope in the panels and reviews being undertaken by the Federal Government, such as in the areas of director liability and occupational health and safety (OH&S).
I expect executive remuneration will continue to be a major priority for some time. We have seen much media debate on the topic, and this will continue as the pressures on companies intensify with the downturn in the economy. I am also a big advocate of principled laws for directors, especially when it comes to director liability.
I aim to continue to build the profile of AICD, in Australia and overseas, so that all directors understand the benefits of being a member. It may be unrealistic to aim to have the entire 1.9 million director community as members, but somewhere near that would be good!
I would also like to see an increased commitment by Australian companies in budgeting for professional development for their boards. It is not only the directors that will benefit from this, but also their companies, staff and the wider community. With increased workloads affecting how effectively directors can do their jobs, now is the time for them to consider how they can improve their individual knowledge and effectiveness.
CD: What concerns you most about the landscape directors in Australia face? What would you most like to see changed?
JC: A major concern is the threat of increased (and unnecessary) corporate regulation. There are 600 state and Federal laws that impose onerous burdens on directors, particularly in the area of personal liability. Many of these laws make directors liable because of their position and not what they have done. Rather than introducing more regulation, we should be ridding ourselves of some of these provisions; there should be better, not more, regulation. It is hard enough running a business without the extra lead in the saddles for directors.
CD: How do you believe the global financial crisis has changed the operating environment for directors?
JC: The crisis has added to the pressures directors are facing. It is important to remember that it is the 1.9 million directors in Australia who are going to help us get out of the economic downturn.
Roadblocks are constantly being put in their way. Good regulation and policies work hand in hand for weathering the storm, but bad laws just add more hurdles for them to jump over. They also divert directors’ time away from their businesses, just when they should being paying more attention to them. It is critical for Australia to recognise this so that business can improve.
Most commentators take the view that it will get worse before it gets better, so directors need to continue to be “match fit” to survive and prosper.
It is going to take courage, good judgment, resilience and skill for directors to continue to effectively govern their organisations. But now is the time when they can rise above the ruck and prove themselves to their organisations, shareholders and the wider community.
CD: You have been outspoken about Australia’s inconsistent patchwork of occupational health and safety laws. What would you most like to see changed and why?
JC: I was pleased to see the recommendations that came out of the two reports of the Federal Government’s National Review into Model Occupational Health and Safety Laws, to which AICD made a submission. The report supports new legislation to achieve harmonisation of OH&S laws across Australia, which are generally in line with AICD’s stance on the application of principled and uniform laws in this area.
Draconian laws make it difficult for everyone to attract and retain directors, so it is important that any new laws are principled, practical and workable from a director’s perspective. This can be seen starkly from the results of the Federal Treasury/AICD Survey of Company Directors released by the Minister for Superannuation and Corporate Law, Nick Sherry, on 18 December last year.
CD: Executive pay has become a hot potato. What went wrong and what can be done to improve the situation?
JC: What we have seen over the last few months is not uncommon in the normal cycle of a boom. This was unsurprisingly translated into some (not all) executive remuneration levels in parts of the economy, notably the finance and funds management sectors. However, at the end of any boom there is a bubble burst and we will no doubt see executive remuneration decrease, particularly in incentive pay areas.
While some boards have got executive remuneration right, there have been some instances when mistakes have been made. I believe Australia’s directors, by international comparisons, have done a reasonably good job of handling the difficult job of setting executive remuneration levels.
AICD strongly believes that what is needed is improved self-regulation, not more government regulation. Boards are best placed to govern this area and should adopt a best-practice approach when setting remuneration levels. Many of these points are set out in our Executive Remuneration: Guidelines for Listed Company Boards, released in February, which I am pleased to see have received a great response from directors and commentators.
Another misconception is that there is a one-size-fits-all approach to executive remuneration. This is not the case and boards need to take their organisation’s unique circumstances into account.
The downturn in the economy has seen nearly every segment of the community get involved in the debate and AICD will continue to be a part of this debate because it is such an important issue.
CD: You are chairman of the New South Wales Cancer Patients Assistance Society (Can Assist). What made you join this board and what challenges does your board face?
JC: When I was quite young my mother, Jean, died of breast cancer. During her illness, she realised how much harder it was for her fellow patients from the country to receive sound medical treatment, compared with those in the city, and she was determined to do something about it. With the assistance of my father, Clifford, who was an eye-surgeon, my mother was instrumental in setting up the Orange (regional NSW) branch of the Cancer Patients Assistance Centre of NSW (now Can Assist).
Because of her dedication and inspiration to others, the Jean Colvin Hospital in Darling Point, Sydney, was named after her to assist country patients in obtaining the cancer treatment they so needed.
With that background, I and my sisters, Tina Ashburner and Deeta Colvin (McGeoch), have worked with this worthwhile charity for many years. It now has 43 branches in NSW and last year helped 2,000 people across NSW.
There are many challenges that come with sitting on the board of a charity. We are finding that fewer and fewer patients are being insured and that the demands are becoming greater in these tough economic times. It is also becoming more difficult to raise funds. I am lucky to have a hard-working and dedicated board, local committees and volunteers doing such a great job.
CD: How do you view the landscape for not-for-profits? What are your biggest concerns about this sector?
JC: Directors in these areas are constantly working harder, and the demands are continually increasing. Australia gets an enormous amount of value from the work of these directors, who come from a range of backgrounds and work within a wealth of different organisations. Without them Australia would be in great difficulty.
However, I believe one receives immense satisfaction from working hard and looking after our fellow Australians or promoting other worthy causes.
CD: Do you plan to take further board positions over the next few years and why?
JC: At the moment, my hands are reasonably full as managing director and CEO of AICD and chair of Can Assist. I am also a director of a boutique winery, Colvin Wines, located in the Hunter Valley NSW. However, it is certainly something I will look at in the future and AICD’s board is encouraging me to do so at an appropriate time.
CD: What makes you tick?
JC: I was fortunate to have received a wonderful country upbringing within an extended family and was lucky (and worked hard) to attain a great education, including tertiary education at the University of Sydney, London School of Economics and Oxford University.
I get great satisfaction from helping others to find their wings and celebrating their success, but I believe that to do this you first need to have a sound basis in your own principles.
Throughout my career I have assisted wherever I could: as a lawyer to my clients; as chair of a charity to those in need; and now as CEO of an association, to members of AICD. I am also a firm believer that to whom much is given, much is expected.
CD: What have been the biggest lessons you’ve learnt during your career?
JC: Be yourself and do not take yourself too seriously; there is humour to be had within and outside the workplace. Keep yourself optimistic and always remember that water finds its own level – this can be applied to most things in life.
CD: What, or who, inspires you most?
JC: Most of my inspiration and heroes come from within my own family. My mother was an amazing lady. My father managed to live an incredible life as an ophthalmic surgeon and also managed to find time to compete at Wimbledon during a study break. He then volunteered to fight in World War II and was sent to the Middle East, Crete and New Guinea (my sisters and I are lucky to be here).
My sisters are also an inspiration to me, especially my elder sister, Tina. For a long time she has suffered from cancer, but always manages to think of others ahead of herself.
In my own family, my wife Robyn and my children, as well as Robyn’s family, who are incredibly talented and wonderful people.
Outside of my family, I would have to say Winston Churchill for his resilience and his achievements, as well as some of the senior partners from my time at Freehills, including Brian Page and Kim Santo.
CD: What are your hobbies and interests outside of the workplace?
JC: I like to spend my free time reading about economics, politics and history as well as reading biographies. I enjoy classical and popular music – a result of Robyn and her family’s passion for music – as well as playing tennis, swimming, walking, grape growing and winemaking.
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