President puts culture first

Our new President Alan Isaac learned a lot about the power of culture during his time at the head of the International Cricket Council.

New IoD President Alan Isaac CNZM CFInstD is a risk-averse director, something he puts down to his experience as a chartered accountant.

“As a chartered accountant and a partner in KPMG, I used to specialise in corporate recovery work – receiverships and liquidations, mixed with a bit of forensics, so investigative work,” Isaac says.

“Being involved with lots of organisations where there’s been fraud, where there’s been a company collapse, where the auditors have been sued, where the directors have been sued… In terms of my governance career, that experience, that background, has shaped my attitude. I’m quite risk-averse. I like to think I’m very selective about the roles that I take on.”

When considering roles, Isaac applies a personal test – alongside normal due diligence, of course. There are three things that he has to be sure of.

“I trust and respect the chair. I trust and respect the CEO. I genuinely believe that I can contribute to the organisation. Unless I can be positive about those three questions, I have tended to say no to opportunities to join governing bodies.”

He is also something of an accidental director.

“I didn’t set out to be a professional non-executive director. It was actually just that opportunities presented themselves, I guess. It wasn’t a deliberate strategy.”

Isaac’s career with KPMG included time as a managing partner, chairman and chief executive. His broad experience made him an attractive candidate for board positions. On retiring from the firm in 2006, he began a governance career that has spanned the worlds of sport, NFPs, business and the public sector. He currently holds a number of board roles with organisations including Scales Corporation, Oceania Healthcare, New Zealand Community Trust, the Basin Reserve Trust, Skellerup and the Wellington Free Ambulance.

Testing times

A keen cricketer, he is probably bestknown for his time as president of the International Cricket Council (ICC) from 2012-2014. During his tenure the governance structure of the organisation was updated and the cricket World Cup reorganised in the format that it was played in recently.

“I’ve enjoyed the Cricket World Cup. It was in my time as president, chairmen as it were, of the ICC that we made the decision to create a 10-team competition.”

The move was not popular in all quarters of the game. Cricket arouses great passions in people and the mood of nations can ride on the outcome of a match. This put significant pressure on ICC members and added complexity to his role as president, Isaac says.

“I chaired a board of 13 people. Each of those 13 people had a vote, and I didn’t. In some ways I was more like a mediator.

“We were heavily criticised [for the 10-team World Cup format] because we were denying some countries the opportunity to participate – but it was of course a qualifying tournament so every country had the chance to qualify.

We were criticised for not growing the game – we made the point that the tournament would be much more exciting.”

For Isaac, understanding the source of concerns at ICC meetings was key to finding a way forward.

“People used to ask me how I dealt with the politics. I used to respond to that question by saying ‘I dealt with the C word’, ie culture rather than politics. I worked hard at understanding the different cultures and why people said what they said, and did what they did.

“When you appreciated how he or she had been appointed, the interest in the game in their country – right from PM level – there was great pressure on individuals to do the best thing for that country. When a decision was going against that country’s best interest you could help them explain it back. On one occasion I went to Bangladesh and got an audience with the PM straight way – when generally you had to wait six months. That was pretty special.”

The ICC changed its governance structure while Isaac was president, making him the last president to also chair the council.

“Rather than rotating around the member countries, and effectively being the chairperson of the board, the role of president was split in two. The president’s role became ceremonial and the board would elect the most appropriate person from within the board to be chair. So that is one of the positives from that experience. It was obviously quite a demanding role balancing the interests of the various countries, dealing with the imbalance of power amongst the member countries and the different cultures. It was very demanding both physically and intellectually.”

Presidential ambitions

During his term presiding over the IoD, Isaac wants the organisation to receive more recognition for the good work it undertakes to promote a professional approach to governance.

“I’d like to think that during that time we can continue to develop the reputation of the organisation, the reputation that we have for growing and developing good directors,” he says.

“Improving the visibility of the IoD and the work it does will help to ensure that governance – as a profession – is better understood in New Zealand and, ultimately, improve governance standards.”

“We are aspiring to be better recognised as a professional body. It would be nice to think that we can develop those professional standards and arguably have world class standards of governance In New Zealand.”

He would also like to see wider understanding of the value of chartered membership of the IoD.

“It would be nice to think that a chartered member process is better recognised and accepted. And a little plus would be if it was mandated that a certain percentage of each board had to be made up of people who are chartered members.”

“I’d like to think that a greater proportion of listed company directors, and Deloitte top 200 organisations, were members of the Institute. That would be a measure that we had succeeded, that we were relevant to people who have governance as their career.”

Article from Boardroom - August September 2019 issue