The Accidental Chair - An Alternate Board Pathway

The Accidental Chair - An Alternate Board Pathway

At Women on Boards we talk a lot about strategies for joining a board. There are many options and opportunities. Increasingly, we're being approached by and developing relationships with early stage companies needing directors (and capital). This is becoming a serious director asset class and one that requires a bit more due diligence to secure board roles.

As someone with a great interest in early stage companies, here are my personal thoughts on:

  1. How to get on board in early stage companies via the WOB network, and
  2. Whether investing is a sound idea in the context of obtaining a board or even a chair’s role.

Finding myself Chairing a board in Far North Queensland (FNQ)

So how did I, Ruth Medd, inner city dweller, accountant, superannuation trustee chair, investor and supporter of good causes, find myself as the Chair of Australian Chocolate Pty Ltd (Charley’s) based in Far North Queensland – some distance from the chic coffee shops of Kings Cross?

Some years ago, WOB was holding events in Cairns where WOB member, Ruth Faulkner was speaking. She introduced herself as an experienced chartered accountant who did a lot of audit & risk committees and as the chair of Charley’s Chocolates.  Talking to her afterwards, I skated over the audit roles (doing too many of these myself) and asked about Charley’s – being a chocolate lover.

Some months later the Charley’s prospectus appeared in my inbox. The company was looking for additional investment – the minimum being $20,000.

My Principles for Investing

A couple of things about investing.  Generally, I do it with due care, diligence and professional advice.  But every now and then I have a flutter.  My flutters as a matter of principle are companies:

  • with Australian IP;
  • that look interesting – a bit ‘groovy’ - and are attempting to solve a significant problem or have an interesting business model;
  • operate in a sector where Australia has a competitive advantage; and
  • produce a product/ deliver a service that I can connect with and admire. So, if I lose my money, I can comfort myself that I had fun along the way! 

This is consistent with my view about making Qantas my airline of choice. Aside from its 99-year history, Qantas aligns with my values. For example, the Qantas staff have a proud history of volunteering their services when Australian’s are in trouble. An example of this is when they repatriated the embassy staff from Beijing at the time of the Tiananmen square massacre. The ambassador was last across the tarmac as he had to ensure all embassy papers were shredded before he departed (pre USB’s).

My Investment in FNQ

Having read the prospectus, I made the minimum investment in Charley’s – not necessarily expecting a return; but on the basis of it being novel, innovative and a lover of fine dark chocolate.

Time passed and Charley’s meandered along and kicked some significant goals; such as growing award-winning cocoa, making award winning chocolate and developing the brand. But nothing earth shattering.

I have always thought about shareholding as an active – rather than passive – activity with attendant responsibilities, including giving a helping hand when asked. Sometimes things get a bit hard for company founders. They are not expert in all areas – and need to learn to ask for help. The most invested group to ask from is often the shareholders – who have significant (and occasionally underestimated) day to day skills that can prove to be worth their weight in gold.

So it came to be with me. A fellow Charley’s investor, IP expert and wine tasting colleague from my dim dark past had been lending his skills to the company and it was he who suggested I could assist with other challenges.

Time went on and the matters were managed with a little help from willing shareholders, who were then invited to join the board.  I became Chair and the IP expert member of the advisory group. That was in 2017. I could not have envisaged this outcome from a routine regional WOB event in sunny Cairns in 2013? It was not my intention nor was it part of a ‘strategic NED plan’.

The key lesson for those of you considering a  board career is not to discount serendipity and your own willingness to contribute as yet another pathway.

So, the message is that the WOB network delivers many and varied rewards.

As a matter of interest, I have investments in two other companies that have been brought to my attention by WOB members. One is the unhelpfully named Bluechiip (ASX: BCT), which seems to be on the up after a half decade of struggle.  It’s a medical devices company.

The other is Hexima, previously listed but now private.  Also, in struggle / development for years. But could provide a cure for fungal nail infection – which is a big deal - if it works.

All three companies came to my attention via WOB:

  • Charley’s is now cash flow positive and comes with all the challenges of a growing company, including once again seeking funding – via Crowd Sourcing – a way for SME retail brands to raise funds.  The pitch is to encourage chocolate lovers and / or investors to take up equity.
  • BCT seems on the verge of success.
  • Hexima is progressing through the testing stages and has indicated it will be seeking additional funding from shareholders.

I hope you enjoyed this tale of serendipity?

Ruth Medd, 19 October 2019

Additional Reading

This is a follow on to the article Ruth wrote on Crowd Funding in New Sectors on 13 September 2019 here