We ask a prominent director to share three important lessons from three different professional experiences.
George Savvides AM FAICD is chair of multicultural broadcaster SBS and I-MED Radiology Network. He is a non-executive director of IAG and software company BuildXact, and was formerly chair of Next Science, Macquarie University Hospital and a board member of NZ company Ryman Healthcare.
Prior to his board career, Savvides had 25 years’ experience as CEO of several Australasian healthcare companies, including Medibank Private. Under his leadership, Medibank’s market capitalisation went from under $1b to $6b, culminating in the successful IPO of the federal government-owned enterprise in November 2014.
In 2020, Savvides was awarded the Order of Australia for services to the healthcare industry.
The Board: SBS
The Lesson: Remain focused on future relevance
In my first couple of years on the SBS board, I observed a strategic restlessness in the leadership group. Convinced competitive forces in global broadcast news and entertainment would change rapidly toward digital platforms, they wanted SBS to lean into its transformation early to secure its future and compete with the best. They could see free-to-air/analogue audiences would decline through the displacement of digital streaming platforms.
Governance conversations between board and management were deep and challenging. We agreed to allocate funds to build tomorrow’s business platform while trying to fund today’s business. Looking back, board and management are pleased we made the decision to pivot with subsequent year-on-year investments. When boards undertake their governance
of strategy and step up to support management in making those strategic new investments, it plays a future-changing role.
One lesson to share from this experience is the role the board can play in keeping a check on an organisation’s relevance to its key stakeholders as it considers strategy and change. There’s a natural tendency to primarily address the short-term needs of stakeholders – in our case, viewers. We cannot ignore the pressures of business as usual, but the report card for good governance expects today’s board to hand over an organisation running better than the one it inherited.
The Board: I-MED Radiology Network
The Lesson: Customer respect is everything
I-MED is owned by private equity firm Permira, and as a board we are focused on performance results and the efficient use of capital. A key element of board oversight is employee engagement and culture. For cultural integrity to be manifest, a company’s external behaviour and brand persona needs to be consistent with its internal behaviours and cultural heartbeat. When customer respect is validated culturally, employees can create a deep sense of purpose and job satisfaction. The dividends of this approach are greater customer retention, improved margins and higher customer satisfaction/advocacy.
Boards need to walk this talk. Customer empathy in frontline teams is ultimately inspired by the senior exec team and CEO. Respect is top-down and the board’s endorsement and buy-in are critical. When employees feel encouraged by their leaders to provide respectful customer services, the board is delivering on one of its ethical and ESG responsibilities.
Not all directors are comfortable with the intangibles of culture and customer empathy, but boards with the right composition of NED skills can validate this approach. I’ve realised the importance of voicing the issue of customer empathy and aligned organisational culture when wrestling with issues surrounding financial performance and shareholder returns. It is important for boards to reinforce the cultural priority of customer respect.
The Board: IAG
The Lesson: Remain calm in stormy seas
I joined the IAG board just after the financial services Royal Commission, which presaged a great deal of remediation work and risk compliance strengthening across the business. While that work was underway, our world was impacted by COVID-19. IAG, along with many other ASX companies, had to navigate a sustainable customer pathway while still delivering for its shareholders and supporting its employees. In those early board meetings, it was clear there were huge challenges facing IAG.
On top of that workload was the inherently challenging work of endeavouring to underwrite the impact of increasing climate volatility, along with theft and accidental damage, to the assets of more than eight million customers.
At the same time, we also embarked on a CEO search, a significant organisational restructure aligned to a three-year strategy, a successful implementation of a new core enterprise system, and the shift from post-Royal Commission remediation to a pathway to organisational growth and simplification.
One characteristic of IAG’s board culture stood out as a key success factor — calmness. There was no panic. The transformation is not complete, but the momentum is evident, with shareholder returns lifted. Strong engagement between CEO Nick Hawkins and his senior executives, with chair Tom Pockett MAICD and the board is a key factor in this progress.
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