Directorship in the Raw

In her first article for 2021, WOB Chair Ruth Medd explains why ‘directorship in the raw’ is important to grasp and why it's important for current and aspiring directors to read the AFR.

Welcome to 2021 everyone. I am hoping that I spend less time rearranging my travel than I did in 2020!
While the topic of my article today might indicate I spent my holidays lounging around at Mission Beach as Chair of Charley’s Chocolates, I assure readers that this is not the case. It’s about how we consider directorship in its true and unvarnished state – in the raw as it were.

My musings come from December 2020 when I was honoured to present the graduation certificates to the WOBSX Margaret Jackson syndicate based out of Melbourne,  chaired by David Rennick and with adjunct Rebecca White.  This was a mixed live and virtual event. Coming from Sydney I was in the virtual group.

As the final speaker I had chance to listen to the syndicate members discussion with guest speaker, Zita Peach, who covered a broad range of topics, including:

  • Her pathway to the ASX
  • Advice on achieving ASX roles
  • Extent of due diligence
  • Growing your network

Find out more about our 2021 WOBSX Syndicates here

In developing my dot points on what to say in my allotted 30 minutes I reflected upon the graduation of the Elizabeth Bryan syndicate in 2019.  Elizabeth attended and started by politely listening while each attendee introduced themselves. Then she pounced with the question -would you take on a directorship at AMP? 
At that time:
  • The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was tabled in Parliament on 4th February 2019.
  • Embattled Chair Catherine Brenner had stepped down the preceding year (April 30) in relation to issues raised in the Royal Commission concerning the preparation of the Clayton Utz report on AMP’s fee for no service issue.  
  • There was continuing media coverage of the company and its board.

A minority of attendees indicated they were up for the gig.

The next question from Elizabeth was what have you got to offer AMP as a potential board member?  This was not an invite to practice the 30 second pitch. Rather an opportunity to convince Elizabeth that you were up to the challenge and for her to then quiz the claims that were made.

Encouragingly Elizabeth gave a pass to some of those brave enough to opt for the gig.  My memory that day is of ‘directorship in the raw.’

Which makes me reflect upon the WOBSX syndicates.  Corporate Australia is one long ‘days of our lives’ story.  If you don’t know the story you are at a disadvantage. WOB continually reinforces the need for aspiring directors to read the business press, in particular the AFR and business publications or sections in other newspapers.

So, the focus of my remarks to the Margaret Jackson syndicate were as follows:

  1. Do you know about Margaret Jackson’s directorship career?  The highs and the lesser highs.  What about when as chair of Qantas the board recommended a sale to private equity. Which fell apart at the last moment. Fortunately?
  2. Do you have any additions to your list of ‘traps for directors in 2020?’  Think about Freedom Foods (ASX: FNP). My takeout from the extensive media coverage of that particular saga is to always pay attention to the basics of human nature and financial reporting. It’s not only about the discussion on the application of new accounting standards with your CFO.  It’s also about the reasonableness of the accounts given your insider knowledge.  In Freedom’s case it seems to be about new product profitability – remembering that most new products struggle to meet the enthusiastic projections of their sponsors. It’s about understanding the relationship amongst the senior leadership team and their values.  It’s also about who are the shareholders and their holdings. Does your board focus on these?
So, my take-out is that ‘directorship in the raw’ is as important to grasp as the more cerebral and common questions related to good governance, board policies and the thrill of business expansion plans.  Time to pick up the AFR!

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