Melinda Conrad FAICD, who sits on the board of the Australian Securities Exchange (ASX) and will speak at the Australian Governance Summit next week, outlines why technology is the number one skill directors need over the next 10 years and why the ASX launched Australia’s important new technology index last week.
How can the new S&P/ASX All Technology Index help Australia foster a better culture of innovation?
I think technology is the driving force behind so much of business today and so much growth - and indeed 20 per cent of the S&P 500 Index are technology companies. So the fact we have built enough critical mass on the ASX listing to create this index is a wonderful opportunity for us to shine a light on the exciting companies that are technology-based here in Australia. The index will attract further liquidity to these businesses and also attract talent and shine a light on where we are at around the world.
Interestingly, there are technology companies that are on this index that are not just Australian but from all over the world, including Israel and the US, which have come to list in Australia because of our focus on technology. This is a really exciting opportunity for our country.
We are getting some real critical mass. We are having some wonderful companies come out of this country that are knowledge-based and have a global footprint. A lot of them are software businesses and software has wonderful scaleability and upside, which means that even though it can come out of a small country, it has global application.
How can boards foster a culture of innovation?
I think the best thing boards can do to support innovation is to create an environment of safety for the executive team and CEO to take risks and try things and not always succeed but be able to trial and iterate. Because by its very nature innovation means it has not been proven and you are not always going to get it right. It’s important for boards to recognise that and management to feel comfortable when they don’t get it right.
What is the Number One skill for directors over the next 10 years?
I would say the Number One skill would be an awareness and appreciation for technologies of the future. I don’t think you need to be a technologist per se to be a company director, but given the role that technology is playing in all growth and opportunities in business today, you need to really understand where technology trends are going, where that creates opportunities for your business and where it creates threats and what insights you can bring to the board table round technology and business today.
Who owns culture and why is purpose important?
Purpose is paramount. Whether you are an NFP or government or big or small business, your purpose is who you are here to serve. Purpose informs many things – especially the culture you want to shape and the DNA of what your company is and what you want it to be, plus attracting the right people for your organisation. It also informs the non-financial risks to your business.
I think everyone has to own culture in the end but typically it is the CEO and management team who once everyone has established purpose then set a strategy which aligns with that then it is incumbent on the board to support the CEO and management to deliver that strategy and culture but also to challenge them along the way.
What is your Number One tip for executives who want to transition into a board career?
I would say it is to pick subject matter that you are excited and passionate about, whether that is in business or not-for-profits. Because inevitably, you will enjoy it more. Sometimes being a board member is fun, sometimes it is a slog, so you need to have resilience and perseverance when things are not so enjoyable to understand why you are there. And to be excited about your purpose.
The number of women on ASX200 boards has risen to 30.7 per cent in January 2020. Does this go far enough?
It’s a fantastic result, given where we have come from. And AICD deserve a lot of credit for pushing this. Given that the population is 50 per cent women, you could argue that we still have a long way to go. But the trend is certainly in the right direction. And I think what has changed certainly since I have been a director is that there used to be an argument when we thought about board renewal that there just was not a good enough pipeline of talented women coming through. There are some fabulous women coming through. And that is not an argument anymore.
Do you see the role of board committees changing?
Yes I think it is certainly on people’s minds as to whether they think their board committees are fit for purpose and optimised the way they should be. Certainly with a fresh focus on non-financial risk, people are asking themselves if they have the right interface and interplay between the audit, risk and HR committees and want to make sure they are all interconnected and speak to one another on all various issues.
Melinda Conrad at the Australian Governance Summit
Melinda Conrad FAICD, who sits on the ASX, Caltex and Stockland boards, will speak at the Australian Governance Summit on the topic of Shifting Culture in an Established Organization.
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