Jeff Kennett has left politics, but still views his directorships as public service. He chats to Nichola Clark about the challenges of his roles, especially as head of beyondblue and the Hawthorn Football Club.
Jeff Kennett, still in public service
You either loved him or hated him. Jeff Kennett is the first to admit it. But regardless of your political persuasion, since hanging up his political boots you can only take your hat off to the man who has dedicated much of his post-politics days to establishing beyondblue. This national initiative, which addresses depression, has been changing our cultural perception of depression and has essentially brought it “out of the closet”.
So what inspires someone who was a member of the Victorian Parliament for 23 years and Premier of the state from 1992 to 1999 to become an advocate for depression? Kennett says it all began in 1997. His daughter, a student at the time, was devastated by the loss of two male friends who died in unrelated car accidents. “She asked if there was anything I could do to reduce the road toll,” he says. “But when I looked into their deaths, I found out that both these young men had taken their own lives.”
Kennett examined what he could do to reduce suicide. “I realised a lot of people who commit suicide are depressed and that led me down the path of learning more about depression, anxiety and stress. I found out that 800,000 people suffered depression throughout Australia and 200,000 suffered a major mental illness – that’s one million people a year – and yet this illness did not have a public profile. We needed to change that.”
In 1999, Kennett lobbied his colleagues and the then Prime Minister John Howard about setting up a national body to address depression but failed. Undeterred, he continued and successfully established beyondblue in 2000, with the support of Howard and Victorian Premier Steven Bracks.
Kennett has been chairman of beyondblue ever since, and without hesitation considers it to be his most important work because it influences the lives of so many people in Australia. “We have established a public and a political priority now for depressive illnesses that simply wasn’t there 10 years ago. It is wonderful to be part of an organisation that is accepted by the community and has so many good people contributing and working within it, where every part of the organisation is working harmoniously together to deliver its goals.”
However, what gives Kennett most satisfaction is the response from the public. Crossing all cultures, classes, ages and political beliefs, depression is indiscriminate and an extraordinary leveller. “Many people come up to me at airports or stop me on the street, wanting to talk about their experiences of depression, seeking help or information.” He recalls one flight from Brisbane where first the stewardess talked frankly to him about her marriage breakdown and battle with depression, then minutes later the pilot came out and spoke about his sister’s experiences with depression.
“It’s then you know that the organisation of which you are part, and just happen to lead, has actually made a difference. If strangers can approach me as they do and talk about their illness, or the illness of a child or parent, you know you’re making a difference. And, many of those people never shared my political allegiance.”
Beyondblue is just one of many success stories across Kennett’s varied portfolio of directorships. These include an eclectic mix of not-for-profits (NFPs), corporates and unlisted companies. To mention a few, he is chairman of the NFP Enterprize Ship Trust that sails a replica of the ship that first bought settlers to Melbourne in 1835, bringing joy to hundreds of children who cruise on it each year. Kennett is also a director of Melbourne-based Equity Trustees, which was founded by his great grandfather in 1888 to help widows access good financial advice. He is also chairman of family owned PFD Food Services, a successful food logistics delivery company with a billion-dollar turnover. And, not forgetting his highest profile position for football fans (particularly in Victoria), he is president of the Hawthorn Football Club.
From football, to boats, to depression, to food – at first glance, Kennett’s choice of directorships seem wildly disparate. However, each of the organisations share common trends. They all have a social and community interest, are founded on strong values, “have a good heart” and are “based on the same rocks of good governance”.
“Whether it’s running my own business or running the state of Victoria, I’ve come to accept that there are probably four dominant factors I take into consideration when working for an organisation and particularly as a director or chairman,” says Kennett. “The first is the quality of the people I can put around me or that are around me. The second is their commitment and the ability to put in place the highest levels of governance. The third is the quality or otherwise of the CEO. Finally, you have to enjoy what you’re doing and if you don’t, don’t join!”
Kennett has been an avid fan of the Hawthorn Football Club since he was a boy, but the reason he took on the presidency was not to fulfil a childhood dream. “I was interested in the management challenge of getting a club that was almost at the bottom of the ladder with a divided board and no business plan, back into being a complete commercial unit and that’s what we’ve done,” he says. Indeed, the club won the premiership in 2008.
Kennett had been asked many times to take on the role, but says: “I wasn’t able to [commit] until the end of 2005, when I was asked, because of a fracturing within the existing board, if I would take over the leadership and put into place a united board working with a united administration, a clear business plan and proven management techniques with an absolute focus on delivery.”
Kennett has just been re-elected president for three more years and says this will be his last term. Besides turning the club around with new and efficient management systems, he has changed its constitution so that no president, including himself, can serve for longer than six years. “If I look at the world today, I think I can count on one hand the number of people who have the creativity to exist in a senior position, be it as a CEO, president or chairman, beyond six to eight years. Often people stay because they become comfortable and being comfortable isn’t a definition of good governance. You’ve got to introduce new people and new ideas that keep an organisation working in the right direction.”
According to Kennett, this applies to all organisations. “At Hawthorn and at beyondblue, for instance, we are continually changing the mix of the board and management to make sure we stay fresh. Each person we appoint to the board either replaces skills that need to be replaced or bring new skills the board believes it needs over the next five years – none of us is bigger than the organisation.”
One thing he has learnt in life is that the fundamental values and principles of leadership do not change. Having demonstrated this with such an easy transition from political to corporate life, he observes: “They apply equally whether I’m trying to lead my family or running the state, beyondblue as a NFP, the Hawthorn Football Club as a sporting body, or any of the commercial companies with which I’m involved.
“Leadership management is not difficult, but you do have to have the right values in place. Therefore, I see no difference in my management technique for a sporting club to that for any other board except for one factor. In a sporting club, the emotions of your shareholders, who are your members, are substantially more apparent than on a commercial board. With the football club, my shareholders, of whom there are over 40,000, live and breathe the success, or otherwise, of the club and its personalities. As Premier of the state, I might have been turning over $25 billion a year, but there was very little emotion attached to politics. But for a football club, which only has a budget of $40 million, the emotions of my shareholders are electric.”
Kennett continues: “The Hawthorn Football Club, and sporting clubs as a whole, are generally a very true ingredient for good health for so many Australians, allowing us to get balance into our lives. Sport provides that balance for millions of Australians and therefore it’s a terribly important ingredient in the Australian matrix. That is the biggest difference I notice between being president of the Hawthorn Football Club and chairman of a board.”
But Kennett says being president of a football club comes with its challenges, the biggest of which is complacency. “We won a premiership last year and there’s no guarantee we’re going to win it in 2009. To win in 2009 and to be competitive, we have to continually introduce elements of change so we don’t become complacent, and that change is not only in ideas and training methods, it’s also in personnel… Then, of course, you have the quality of the coaching group and playing group and their continuing good health. As we speak, Hawthorn has a lot of injuries… so we’ll start the season in a weaker position on the field than we finished last year. So that becomes a challenge.”
But ultimately Kennett says it’s not just about winning. “I want Hawthorn to be the most professional Australian Rules football club in Australia and I think we’re well on our way to achieving that. I want the values and culture to be right, for it to be financially sound and, of course, our main goal is to win premierships. But I wouldn’t do that at the expense of the welfare of our players or at the expense of good governance – there are a lot more important things in life than simply winning. It’s the sort of organisation you’re part of. Importantly, the collective team of board, administration, coaches and players alone can deliver the required outcomes. Presidents, chairmen and Premiers alone can’t.”
Talking more generally about the challenges faced by directors in today’s economic climate, Kennett says it is crucial to remain current and always look outside the square. He stresses the importance of challenging your own thought processes and where appropriate, challenging what’s being put to you by the CEO.
“A good board and a good CEO will understand the importance of the board being the final arbitrator of good taste,” he says. “There’s a fine line between meeting your responsibility as a director – which involves appointing the CEO and overseeing the strategy – and being fairly hands off. On the other hand, you need enough knowledge to know what’s happening in the business so there are no surprises. You have to be prepared to challenge the CEO, when appropriate, to ensure his or her recommendations are supportable and are not putting the welfare of the business at risk. If the latter is occurring, you have to have the courage to say no.”
Kennett believes that directors not exercising their responsibilities and having the strength to challenge CEO decisions has contributed to today’s economic downturn. “I suspect you’ll find over the last 10 years, many boards, when presented with a proposition by a CEO, have simply rubber-stamped it. If it wasn’t the case, we wouldn’t be in the trouble we’re in today.”
He admits the suddenness of the economic change caught many by surprise, but says: “If companies had pursued prudent policies and reasonable growth, they would have avoided a lot of what is happening now. Most of those in trouble today borrowed too much money and that’s put at risk the fundamental operations of the company. All the global financial crisis has done is, at an accelerated pace, highlighted a decade of growth and sloth and, in many cases, simple greed.”
But one of Kennett’s greatest concerns is that people are going to over correct. “We can’t wind the clock back. You can only reapply and reinforce good values, good governance, invest in the right people and understand that recovery for many of these organisations is going to take time. That means setting goals that are probably five years out, communicating to your shareholders that it is going to take time to rebuild, and being prepared to do the job properly.”
But in the short term, Kennett laments that unemployment is going to rise and people will be more conscious of what they spend their money on. Inevitably, NFPs will suffer. To help during the tough times, he says there are ways of making NFPs run more efficiently and economically. One suggestion is for them to come together and share the backroom administration functions, such as payroll, allowing more money to go to the cause.
But the main piece of advice Kennett strongly reiterates is: “You have got to be prudent. You have got to have good governance and you have got to have good people on your board and in your management.”
He also highlights the importance of investing public money wisely. “When I established beyondblue, I made the decision that none of our money, which is public money, was to be invested anywhere but in government bonds and cash. That prudence has stood beyondblue in good stead”.
Kennett chose to do that for two reasons: “Because all the money has come from the public, either through governments or public donations, we have to treat that money more prudently than we would treat our own. Secondly, our core business is educating people about depressive illnesses – it’s not about investing, it’s not about trading, we weren’t set up to buy and own land, property or shares.”
Having experienced economic downturns, what concerns Kennett most about this slump is whether as a society we will choose to learn from recent events. “Although there will be a correction now, the reality is that in five or 10 years, we will be back on the growth curve and a lot of the lessons being learnt now will be forgotten in pursuit of the dollar”.
The pursuit of the dollar has always been low on Kennett’s list of priorities. He is proud to have dedicated his life to public service and although he has “retired” from politics, he maintains: “Public service is without doubt the finest service there is, and I would like to hope people realise that whether I head up beyondblue, my footy club, PFD, or any of my other organisations, I still see that as public service.”
As Kennett says: “Life is short. You have to enjoy what you’re doing. You have to be satisfied with what you’ve got, realise that good health is more important than a big bank balance and, I think, the simpler the life, the happier people normally are.”
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