Submission on the Business Payment Practices Bill
We applaud this Bill as a response to the concerns raised by small businesses, but suggest better adherance to governance best practice.
Wayne Norrie and co-founder Roger Cockayne have seen Revera through significant stages to become the successful company that it is today. Having the right people in the boardroom was integral to the success of the company.
Revera Limited provides computing infrastructure and services for businesses. This is provided as a utility 'on-demand' supported service to match business needs.
This includes data centre services; electronic security, servers, storage, backup and recovery services, desktop support and services, remote/mobile working, procurement services, and disaster recovery services.
Originally known as Hitachi Data Systems New Zealand, the company was renamed Hosting and Datacentre Services Ltd in 2002 before becoming Revera Limited in 2005. The Auckland-based company also has offices in Hamilton, Wellington and Christchurch. Revera went through three distinct phases and the story of our board reflects these.
Roger Cockayne and Wayne Norrie bought a 51% shareholding and were keen to set up a board with a strong chair for two reasons:
Our first decision was to appoint an independent chair and we used the IoD's Director Search service.
We chose three candidates from a very impressive list. All were good but we went for Joe Pope, because we felt he had that "elder statesman" quality that we were looking for – something that Hitachi would respect.
He also had experience in marketing and taking businesses off shore, and a fantastic network. He would provide the "new" directors with much needed mentoring in the first few years.
Both joint venture partners agreed on a board structure of six: Roger, Wayne an independent director nominated by us, two Hitachi people and an independent chair.
Joe made sure that we all understood the joint venture nature of our business and that we followed some good governance practice. Setting up the audit committee, monthly board reporting and hardening the forecasting and budgeting systems, were all instigated very early on.
We didn't rush to fill our empty seat but did so when we realised that we were missing a key skill. One of the features/problems of our business, is that it is very capital intensive. When you are making large capital investments, you want a clear picture of the future not the past, when it comes to cash and the return on the asset. We realised over time that we needed someone with practical financial and strategic skills aligned with good solid executive experience. We appointed Rick Bettle.
Over time the JV became quite stretched and strained with each partner wanting the business to go in different directions. We decided to buy out Hitachi and for a while there was a real possibility that it could turn sour. Joe, however, was able to pour oil on troubled waters and Rick, who had had some similar experience before, greatly aided the process. Having those experienced, calm, clear thinking minds to remove us from the emotion was instrumental in our success.
With the departure of the Hitachi board members we appointed Andrew Clements as the fifth and final director. By this stage we had realised that you select directors around a board table in the way you select players on a team. You are looking for complementary specialist skills, not to replicate existing ones. We had grand visions of growing the company and retiring rich and succumbing to the usual attractions. And it all seemed quite attractive with some offers to buy. But, we had no idea about exit strategies. Andrew brought three qualities – knowledge about:
Again, the chemistry worked. So we had a full board of five (two executive directors – Wayne and Roger, two non-executive directors – Rick and Andrew, and an independent chair in Joe).
In late 2012, Telecom approached Revera as a potential acquisition target. Again the board played a pivotal role in ensuring a sensible process ensued, and did not distract Revera from it's day job. In particular, the then chairman Andrew Clements supported by Roger did an exceptional job of managing this process, and ultimately leading to a sale in April 2013. It was enormous value to have sage heads around a table to ensure a successful outcome for all parties.
The board is responsible for governance but it must also add value.
A board must know what it is looking for and a director should know what he/she is bringing to the board. And there needs to be chemistry among the directors. A board is just like a team. Any team can perform well above its individual players' abilities if the chemistry and attitude are right and the goals are clearly understood. The team can be greater than the sum of the players. Likewise, a team full of superstars which are not used to playing together often doesn't work.
Find out more about starting a board