AICD's new chair John Atkin urges directors to use the Hayne Royal Commission as an opportunity to learn and improve.
John Atkin will never forget one remarkable moment in Australian political history: the constitutional crisis that led to the sacking of Prime Minister Gough Whitlam on 11 November 1975.
It not only changed the course of the nation’s history, it changed the course of his career. Born and raised in the NSW Hunter Valley town of Dungog, Atkin, the bright son of a solicitor, was studying honours in pure mathematics at the Australian National University (ANU) in the mid-1970s. A keen observer of politics, he was swotting for an exam when the news of Whitlam’s dismissal broke over the radio. He and his fellow students downed tools and became etched in history as members of the crowd that witnessed Whitlam’s speech on the front steps of Old Parliament House.
The events cemented Atkin’s growing interest in the law. He went on to complete a second degree — first class honours in law at the University of Sydney — then worked his way from clerking to commercial law, did a brief stint at the bar and then entered partnership. Many of his ANU contemporaries are still mates, plus it was there where he met his wife, Judy, a doctor. The couple has three sons and a daughter.
Atkin comes to the chairmanship of the AICD with an acute awareness of today’s politically charged times and the depth of the task at hand for the governance community.
“I would like to see the director community ‘rising to the moment’, not just responding to the Hayne Royal Commission,” he says.
“We are coming to the end of the second decade of the 21st century. With our mission of strengthening society through world-class governance, we need to stand back and identify the different ways in which our society is being challenged to identify where we need to respond.”
Atkin maintains this will require more than responding to immediate challenges of the “manifest” governance failures identified by Hayne.
Atkin notes that a lot of boards have already applied the lessons from the Australian Prudential Regulation Authority (APRA) report into the Commonwealth Bank and have asked, “Where is the voice of our customer?” He says boards are also being forced to be accountable to investors for their remuneration policies.
“I hope we don’t get bogged down in an argument over responsibilities, which will quickly turn into a blame game,” he says. “Rather than finding excuses, it is much better to look at it as an opportunity to learn and improve. The better question is: ‘Looking back, what could I have done differently which may have lead to a better outcome?’ I would also hope for us to come out of this with a deeper understanding of our agency. Company directors are agents with responsibilities to others and we are in powerful positions of immense privilege. We must be accountable for the responsibilities that come with that.”
The value of perspective
After a career of more than 40 years as a corporate lawyer, then CEO, non-executive director and chair, Atkin has an appreciation for the value of perspective taking. He says it should become a fundamental skill developed by all directors.
Atkin spent 19 years as a corporate mergers and acquisitions partner at Mallesons Stephen Jaques (now King & Wood Mallesons). He was involved in many of Australia’s most famous companies and their corporate deals, including the takeover battle for the Herald and Weekly Times; privatisation of John Fairfax and Sons, later acting for the banks and receiver when it was sold in 1991 (which coincided with the birth of his youngest child); the privatisation of Telstra; the establishment of Foxtel; BHP’s demerger of OneSteel and BlueScope; and demutualisation of the NRMA.
His corporate career is a testament to the power of legal and investment community networks, tested through years of mergers and acquisitions (M&A) and deal making. His contemporaries include Philip Clark AO, David Friedlander, Supreme Court Justices Julie Ward and Reg Barrett, Coca-Cola Amatil chair Ilana Atlas, and former ASIC chair Tony D’Aloisio. He counts Rod Halstead FAICD — his former boss at Mallesons Stephen Jaques and now director of Clayton Utz’s M&A group — as a mentor.
“When John came to MSJ, he was very numerate, with a high degree of mathematical skill, which was unusual for a lawyer,” Halstead recalls. “That stood him in good stead as someone prepared to challenge basic assumptions and how things were done.”
Halstead says Atkin’s progressive thinking and capacity for questioning will be important in the period ahead. “It will be a challenging time,” he notes.
Atkin was keen to move into management as he believed things could be done better. But he remembers it as the hardest move he ever made. He says it wasn’t until he was recruited as national managing partner at Blake Dawson (now Ashurst), where he spent six years from 2002 to 2008, that he appreciated how much he had to learn.
“It brought home to me how different it is to be a good manager than to be a good legal advisor,” he says. “Some of the legal skills and habits are counterproductive as a manager — the capacity to always pull things apart and require more detail rather than to set a broad direction, step back and empower others to get on with the implementation.
“Historically, my capacity to be alive to and moderate my emotions and stresses, subjugate them and maintain calm was very low. People would have said, ‘John is one of those people who doesn’t tolerate fools gladly’.”
That was the cue for Atkin to develop a deeper interest in leadership and psychology. He took advice to get himself a coach and began the serious slog of gaining a greater understanding of self and, for a time, practising as a coach.
Becoming CEO in 2009 of The Trust Company, a listed fiduciary services business, Atkin led a major business transformation over four years, following the global financial crisis, and grew its market position before its merger with Perpetual Limited in 2013.
Atkin recalls that a performance review while at The Trust Company brought home the multiple perspectives that have shaped his interactions with others.
“Virginia Herlihy, my coach, did a 360 review with my direct reports and the board, then played it all back to me,” he says. “In one of our sessions, when I was complaining that others didn’t understand, Virginia pulled me up, asking, ‘John how many positions are there in a conversation?’
If there are two people, there are at least three positions — yours, mine, and another up above observing our behaviour and emotion and how they are interacting.’
“In a group context, getting perspective and looking down on how the board is interacting is critical — to appreciate the human element around EQ [emotional intelligence] and to have the capacity to step outside [the situation] and look down at yourself, your fellow directors and management.
“As a CEO and then as a non-executive director, you get to sit on different sides of the table for the discussion. Just watching the interaction and the way the board deals with the CEO and management, there is a lot to observe and learn getting to that higher level, that helicopter view.”
Atkin began his professional directorship career while still CEO at The Trust Company. His first listed board was Queensland rail company Aurizon and his current roles include intellectual property services company IPH, radiology provider Integral Diagnostics, and the Commonwealth Bank Officers Group Super Fund. He is also chair of Outward Bound Australia, which was his first non-executive director role in 2007 after being approached to provide pro bono advice for its 50th anniversary.
His deal-maker, executive and board experience have embedded an important governance lesson — sound process matters.
In 2016, as chair of the $300m real estate investment trust GPT Metro Office Fund, he and the board found themselves the subject of a takeover battle between Growthpoint Properties Australia and Centuria Capital. How did his awareness of the facets of governance play out in this context?
“It made me focus more on running a process rather than worrying about the outcome of the process,” Atkin says. “As chair, you are focusing more on process so it is conducted professionally without any heat. Too often it becomes portrayed as a battle.
“I remember saying to the chairs of the two bidders, ‘At the end of this process, one of you is going to be happy and one of you not, but I want you both to be satisfied with the process of the auction.’”
“People talk of the importance of the roles of the chair and the CEO. From my experience, equally important is the relationship between them so they can facilitate a constructive engagement between the board on one hand and management on the other.”
"The very first thing as a director is you must not covet the role. You must be prepared to walk away from the role if required, because the job is not there anymore or your fundamental values are offended.
Atkin joined the AICD in 1990, chiefly for the networking opportunities, and he is keen to see the organisation deepen its work as a “professional college”.
With a three-year term ahead, and aware of the need to build on the important work of his predecessor, Elizabeth Proust AO FAICD, Atkin outlines his main aspirations for what he’d like AICD to achieve.
“Looking back in three years’ time, I would hope we have a highly engaged membership and have instilled in the institution a real commitment to work together to help each other to improve our skills as directors,” he says.
“That might sound trite, but it is the commitment to learning and development that I think is absolutely critical. I think there are too many people who get to a certain level and think, ‘I know how to do that,’ and stop learning.
“Part of it will be developing a framework where people can calibrate where their skills are and identify areas for development. AICD has already started work on the new Mastering the Boardroom curriculum to take these issues into account.”
He says a bit like driving a car, when people develop skills they go through four stages of learning — unconscious incompetence, conscious incompetence, conscience competence and unconscious competence.
“The most dangerous position to be in is when you have developed a high degree of unconscious competence, but you don’t know where the limitations to your competence lie,” he says.
“You can drive a car now, but if you go out to Eastern Creek raceway and do an advanced driver training course, you realise you only know it to a certain level. Unless you are really questioning things and your competency, you will never really develop.”
Atkin is also keen to see AICD promoting a greater appreciation of the value and complexity of our First Nations culture being the world’s oldest continuous living culture.
“If we understood how much there is to gain by better understanding our Indigenous culture, we wouldn’t be having this argument as to whether they should have a voice in parliament,” he says. “Of course they should have a voice in parliament. The AICD is committed to reconciliation. If we could make progress on developing that appreciation through better dialogue and governance, it would be a good thing. We need to stand back and get a helicopter view of the issues.”
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