Sally Pitkin on the evolution of governance: “We’ve got people issues on the board agenda”


    Dr Sally Pitkin FAICD is the 2020 recipient of the AICD Queensland Division Gold Medal Award. Over her 25 year board career, Dr Pitkin has consistently promoted the highest standards of corporate governance and directorship. Here she talks about why she became a director, how corporate governance has evolved, being a director during a pandemic and why she believes the time has come for quotas.

    Australian Institute of Company Directors (AICD): Was there something in particular that made you think of pursuing a director career?

    Dr Sally Pitkin (SP): I had never thought of becoming a company director. I was very happy being a corporate partner at Clayton Utz and enjoying my life in a professional services practice. But back in 1996, I was asked whether I would like to put in an expression of interest to join an advisory board for Brisbane Water when the Lord Mayor was trying to commercialise some of the Council’s operations. I joined that board, and it was such a wonderful experience. It was a very interesting business, and I learnt all about water and sewage. There were plenty of challenges. And even though it was only an advisory board, it really got me interested in corporate governance and all the issues that come with it.

    AICD: What has motivated you over your career across the variety of boards that you've served on?

    SP:I would call out three things in terms of what keeps me going as a company director.

    The first thing is that it is such interesting work. It is so interesting to work across different sectors and different industries, and you have the ability to facilitate learnings as you move between them.

    The second thing that keeps me going as a company director is that a good governance framework is critical for a successful and sustainable organisation. That’s regardless of whether we're talking about the private sector, the public sector, or the not-for-profit sector. My interest in corporate governance has grown over time to the point where I set about learning more through formal education. I completed a PhD in Governance in 2012 which helped me develop a deeper understanding and become a better director.

    The third is the opportunity to work with such wonderful people, very dedicated and capable people across the different sectors. It is a real privilege to work with them.

    AICD: What are some of the positive developments in corporate governance that you've observed over your director career?

    SP: The first positive corporate governance development I would call out over that 25 years is an acknowledgement of the board's role in organisational culture, and the growing maturity in organisations about how management and boards can develop, strengthen and monitor culture.

    I have been interested in organisational culture from when I joined the board of Aristocrat back in 2004. My interest really started when the Chairman asked me to chair the board’s remuneration committee. It got me thinking, why is it just a remuneration committee? Given people are critical to an organisation's success, why aren't people issues elevated for consideration by the board? I proposed that that committee become a human resources and remuneration committee.

    After some robust discussions, we got that introduced. And then I took that thinking to other organisations where I was on the board. Over time, we have got people issues on the board agenda.

    The second thing I would call out over that time in corporate governance is that there now is a recognition that the context of an organisation, its purpose, its reasons for being, are important in determining what the governance framework is going to look like for that organisation.

    And finally, I would call out the recognition that diversity in all its forms is critical for all our organisations and particularly for the people involved in the governance of the organisations, including boards.

    AICD: You’ve been a passionate advocate for gender diversity on boards. Are you satisfied with the progress that has been made in Australia, and what further change would you like to see?

    SP: When I reflect back, when I took that first advisory board role on Brisbane Water, the Lord Mayor was able to put together a board with a balance of men and women. Same number women, same number men, and it was not a difficult thing to do. So, although we have made some progress since that time, I think the pace of change is too slow, and it is a disservice to our organisations and our society. I think we are at a point where we need stronger mechanisms. And by that, I mean, quotas. And not just for boards. Quotas from when you take on a graduate trainee all the way through the hierarchy, through to the executive ranks and through to the board itself.

    I also think we need to share learnings across the sectors. I think the private sector has a lot it can learn in this regard from the public sector. If we had quotas as a society, we might finally do something about the structural elements that are barriers to women's participation in the workforce. And it would be remiss of me not to mention tax deductibility of childcare. This is an issue that I was talking about with colleagues over 30 years ago, and representations were being made to governments 30 years ago on this issue. So, I would really like to see that finally come to pass.

    AICD: How do you think the events of the COVID 19 pandemic will influence corporate governance and board practices in the future?

    SP: The influences from the pandemic on corporate governance will be both wide-ranging and lasting. And there are so many of them, but I would particularly mention two. The first is the way that boards and executive leadership teams work together. I think this is an opportunity for us to look at the way we work and to find new models. We all had to respond in the crisis to different ways of working. This is an opportunity for us to continue that conversation.

    When I was doing a tidy up of some personal papers recently, I came across a 20-year-old newspaper article. In the article, I was espousing the virtues of telecommuting, which is the phrase we had at the time for working from home. There was a photo of me in my home office. I talked about how wonderful it was to be able to work from home, that clients could be looked after, that you could manage teams and you could be very effective working from home. This was part of me trying to convince the corporate environment that this was a real thing and was very doable. The reality, though, was my home office was in the garage where I had a few bookshelves and a desk and a computer. And that my daily life was actually extraordinarily long hours at an office during the week, over the weekends, because there was just so much resistance to people working from home.

    I do reflect that here we are 20 years on, and it has taken a pandemic to get us to see the value of different ways of working. I'm hoping that as boards plan for their 2021 and 2022 calendars, that they look at different ways of working together as a board and working with the executive leadership team.

    The second influence on corporate governance from the pandemic is around risk management. The first part of that goes to the agility and resilience that we need in business structures and processes and systems, but also in the people side of things. During this pandemic, it has been so critical that boards and executive leadership teams have been able to work as one cohesive team in a very dynamic environment.

    AICD: What personal advice would you give to someone looking to become a director and start their board career?

    SP: My advice to someone wanting to be a director is about how you decide whether or not to join that board where you've been offered a role. Many years ago, I was offered a board role with an ASX 50 company. I remember very clearly flying back from Sydney after the interview, and having dinner with my daughters and being pretty distracted trying to think it all through. My oldest daughter, who was nine years old at the time, asked me how my meeting went. I told her about the role, and she looked at me very seriously and said, "I just have three questions for you, mum."

    She said, "Is what they do legal?" The second question was, "Do you think you can make a contribution?" And the third question was, "Do you like them?"

    Although her questions were framed very simply, it has translated into three lenses that I use when I'm thinking about whether to join a board:

    • Am I aligned to the purpose and values of the organisation?
    • What capabilities and experiences can I bring to the board table?
    • Can I work effectively with the board chair, the CEO and the other directors?

    I think, on a final note, I would say to emerging directors that in choosing that board, you need to understand that once you have said yes and joined the board, you cannot just leave when it suits you, because you have responsibility to stakeholders, including shareholders. And just because that role does not turn out to be quite what you thought, you cannot just say, "well, no, I don't want to do it anymore," and leave.

    This interview was conducted over video call and has been lightly edited for length and clarity.

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