Value of mentorship and succession planning

Joan Withers CFInstD has spent more than two decades as a professional director and more than 25 years working in the media industry, including two CEO positions at The Radio Network and Fairfax Media.

She is chair of The Warehouse Group and has also held chair positions at Television New Zealand, Auckland International Airport and Mercury NZ. But it was 26 years ago that she initially made a decision to move from a CEO position to step into governance.

“In 1997, there were not many women on boards and I was fortunate many boards were actively looking for qualified women to join them . . . but there was still quite a lot of reticence,” she says.

At the time, Withers was well known to Treasury through her CEO role at The Radio Network where she had led the sale process of the Crown’s ownership of Radio New Zealand’s commercial radio stations.

Withers says the approaches came thick and fast, especially for Crown board roles. One of her first directorship roles was on the board of Auckland airport, then 51 per cent-owned by the Crown. She was mentored by highly regarded director Tony Frankham and lawyer Peter Clapshaw DistFInstD.

“The impression they made on me was enormous because they were always impeccably prepared. I took my guidance from them. Tony, in particular, taught me a lot about the role of a director on the Audit and Risk committee. They both read every single paper of the board pack, which is a practice I have always followed,” she says.

An advocate for Emerging Directors, Withers says one of the biggest challenges for women coming out of executive roles is learning which offers to turn down. A potent example is where the candidate has highly sought-after specialist skills, such as IT.

“They will be targeted by head-hunters and recruiters, and frequently they’re in a situation where they are expected to evaluate the opportunity very quickly,” Withers says.

Today, there is visible change happening around the boardroom, including a greater push for diversity. Many boards are also looking for younger directors to fill highly coveted spots.

But are there enough roles to go around and how competitive is the playing field?

“The market has paid lip service to diversity for a long time and gender diversity was the first element we had to address in parallel with increased ethnic diversity,” Withers says.

She says boards are more conscious about age profile and life experience, and says there are plenty of opportunities for new voices to make their way in corporate governance. A downside is a likely pay cut.

“If you are a senior executive looking at going into governance, you have to think realistically about how long it is going to take to pick up a number of roles, and even with a fairly full portfolio you’re still going to have a great deal of difficulty coming anywhere near to your executive remuneration.”

For some, that might be a challenge. But beyond dollars and cents, are there more opportunities in some sectors than others?

While the lure of the tech industry and start-up space might look exciting, Withers cautions that governance in that sector still comes with very clear directorial responsibilities and risks where directors will potentially be liable if things don’t go to plan.

“As a generalisation, smaller companies are not so well protected in terms of the governance infrastructure that larger companies tend to have available to them. . . [for instance] a highly experienced CFO and in-house expert governance resource such as general counsel.”

Instead, Withers suggests seeking out roles on larger Crown boards where there are well-developed protocols and systems already in place.

Getting involved in the Future Directors’ programme is also another way to get your foot on the governance ladder. With strict legal protocols, it ensures incumbents are never “deemed directors” and not pulled in if anything goes wrong.

The Warehouse Group is one of the longest-standing participants of the programme, which takes future directors on for an 18-month term. “It’s a brilliant way to learn and understand what governance is about because you’ll sit beside very experienced directors and they will all be bending over backwards to assist and mentor you,” she says.

As a company, The Warehouse Group is very specific about the sorts of skills they are looking for. “Candidates need to really want to do it and have the support of their employer. The most important thing is they have the time to dedicate and the intellectual capacity to go up the learning curve very quickly,” Withers says.

Future directors need to contribute fully to board activities, including reading all board papers and attending key audit and other committee meetings. Withers says they also need to be vocal and learn the art of posing sometimes challenging questions without offending the recipient. Importantly, they have to be receptive to being mentored.

Crucially, the Future Directors’ programme also significantly benefits the organisations that get involved. Withers sees it as “a no-brainer” because the appointment means there is an immediate capability enhancement around the board table.

“I cannot understand why companies don’t get involved. The amount of value the host company gets is enormous, and the objective of the founders of the scheme – Sir Stephen Tindall DistFInstD, Michael Stiassny CFInstD and Des Hunt FInstD (Retd) – was to increase the pipeline of young directors coming through who can then be better prepared to sit on company boards,” says Withers.