LUNCH IN THE BOARDROOM: Joanna Perry
• Director of: Genesis Energy, Trade Me Group, Kiwi Income Property Trust, The Co-operative Bank, Sport New Zealand, Rowing New Zealand, Partners Life
• Other governance roles: Adviser to the board and member of the investment committee of Tainui Group Holdings, chairman of the investment advisory panel for the Primary Growth Partnership
• Previouly: Partner at KPMG, member of the Securities Commission, chairman of the Financial Reporting Standards Board
Top UK rower traded Olympics for career
Born in Surrey and raised in Somerset, in the UK, Joanna Perry has a Master of Arts in Economics from Cambridge University.
In her teens, Ms Perry swam competitively and went on to row for Great Britain in her twenties, but chose to focus on her career instead of giving her all to be selected for the Moscow Olympics.
After graduating, she worked in Bristol for Peat Marwick, now KPMG, at a time when two out of seven new graduates were women, and became a partner with the firm in Auckland in 1988.
Her governance career began when she left KPMG in 2006 and became a director of Kiwi Income Property Trust.
Ms Perry was made a member of the New Zealand Order of Merit in 2010 for services to accounting
The 56-year-old lives in Auckland and is still an active kayaker, cyclist, runner and swimmer and competes in multisport events, triathlons and cycling events.
She’s looked up to as a respected mentor for upcoming female directors.
She talks governance to National Business Review reporter Georgina Bond and Henri Eliot of Board Dynamics.
What led you towards a career in governance?
“When I made the decision to leave KPMG in 2006, after 17 years as a partner, I saw governance as a way to give something back to the business community. I was known in the marketplace and felt I had the skills and the ethics to be able to add value around a board table.”
What is the role of the board?
“To maximise shareholder value. That’s the very essence of our existence. As a board we’re there to ensure the organisation is doing everything it can to focus on this all of the time.
“Of course shareholder value means something slightly different to each organisation; for instance shareholder/member value is very different in a listed company environment than for a sports body. One of the key roles of the board is to appoint a chief executive who will be there every day. A board will appropriately delegate a lot to the chief executive but has a key role in working with them to set the strategy to maximize shareholder value and then to monitor its implementation.”
Why does governance interest you?
“I enjoy providing value, making a difference and using my sixth sense in the boardroom. Like most things in life there are no hard and fast rules around governance and no right or wrong questions to ask. An adept board member has to use their sixth sense to know when to probe, when to advise, when to challenge, when to support and when to accept so that the board is always assisting the organisation in that drive towards shareholder value.
“Many of my fellow board members and chief executives would attest to the fact that I haven’t yet reached perfection on being that adept board member, but I am always striving to get there and I enjoy the challenge - and the benefits to the organisation when I get it right!”
How do you describe the responsibility you have as a director?
“As a director I’m ultimately responsible to the shareholders and, as has been proven in the courts recently, responsible for the performance of an entity.
I accept this but I am really concerned that there is an expectation gap between what I have described as the role of a director and, when things go wrong, how “people” perceive the role of the director should be.
“I do think we need to be careful – it is a catch 22 in some ways. If the potential liabilities are too great then potentially great directors won’t put their hands up for the role and so you’ll get second tier directors and then shareholder value may fall.”
How do you regard the governance landscape in New Zealand at the moment?
“I wouldn’t go so far as to say that the governance landscape in New Zealand is broken but I do think it needs fixing.
I think The Institute of Directors has a key role to play here in terms of lobbying for change and truly being a membership body supporting and advocating on behalf of its members. I think they acknowledge this but they are not there yet - it’s a work in progress.
“I also think the press has to lift its game. Controversy seems to sell newspapers in this country because of tall poppy syndrome and that doesn’t always serve the governance landscape well.
“I also really think directors’ fees generally in this country are too low – such that they are not sufficient to attract individuals to move from an executive career to consider directorships.
“Finally, there is the selection of directors – and this, in general needs fixing. In my view both boards and their advisers, the search firms, need to lift their game. Each party needs to focus more on considering the appropriate skills, experience and true diversity needed in the board mix to ensure full and robust discussions – rather than who each party knows and would ‘fit in’.”
How long is too long on a board?
“There’s no right or wrong answer but I will be definitive. You shouldn’t be on a board for more than 10 years. Corporate boards need to be refreshed on a regular basis and you need to know when it’s the right time to go. Directors need to be providing strategic value, so you need to keep asking yourself, am I adding to the team? If not, it’s time to go.”
Describe the ideal composition for a board
“I don’t think there is an ideal composition but it is probably more the attributes that each and every board member brings to the table that is important. Diversity of thought is fundamental, as is individual thought and contribution from each and every board member.”
“There is no point on being on a board if you are not contributing at all or not contributing your own thoughts. You should have been appointed because you are going to add value, so if you don’t contribute what value do you add? Each and every board member needs to have great listening skills and use those listening skills to aid in reaching a great outcome in every discussion; and nine times out of ten means changing an initially held view. It’s important you can challenge, and be challenged by, the chief executive, and others on the board, without anyone taking it personally. In the end you are all working as a team to find a clear decision.”
What have you learned about director-chief executive dynamics?“At the IOD conference earlier this year, key note speaker and US futurist Edie Weiner talked about the attributes of true leadership and used two examples to illustrate her views: Hitler and Mother Theresa."
“Attributes they shared were passion for their vision, an ability to articulate their vision and draw in uninterested people and a complete lack of embarrassment or inhibition when talking about their vision."
“Appointing the chief executive is the most important role of the board and we say we want a true leader but do we? Or if we do, are we sure that we as directors are not being “caught out by” the attributes of leaders as described above? In almost all companies that fail you’ll find the chief executive was working in isolation. The relationship between the board and the chief executive is fundamental to delivering of shareholder value. We need to have the right balance here. I think it is a real dilemma for directors and worthy of ongoing debate”
How do you expect to see New Zealand boardrooms change over the next five years?“I hope there’s change around greater diversity of thought – that’s experience and expertise - and we see boards with a greater mixture of people. That doesn't mean more women and young people only; in the end it's important you ask the dumb and intelligent questions."
What gives you the greatest sense of achievement in your role as a director?
“Despite my comments on the role of directors my greatest sense of achievement is when I have made a difference to a human being - when I’ve helped them to do better or they’ve done or achieved something great and I’ve been able to say thank you or well done. Or when something I have done as a director has somehow improved the lot of an individual. And in my role as a director that could be a fellow director, an executive or someone on the front line. I can’t emphasise enough to fellow directors - don’t lose the human element in the boardroom."
How can we get more fresh faces around board tables?
“It’s a really good idea to provide executives not yet ready for a board role to spend a year as a cadet on a board.
“We should also encourage chief executives to sit on another company’s board – just one - to learn about how other businesses work in a non-competitive situation.”
What do you read?
“Lots - fiction mainly, ranging from the classics to the trashy. The Economist is my main weekly catch up with the world.”
What lessons from your sporting endeavors have you been able to transfer to the boardroom?“There’s no doubt my involvement in sport at a young age helped me to develop skills that have contributed to my professional success. And I’m convinced my ongoing participation has helped me to be better in the boardroom. As much as anything else, being physically tired at the end of the day really helps with mental alertness."
“A recent international survey of executive women found that 81% played sport growing up, and 69% said sports helped then to develop leadership skills that contributed to their professional success. For the sake of the prosperity of New Zealand Inc, and the future of our boardrooms it is behoven on every New Zealand mum and dad to encourage, cajole, whatever it takes to get our kids involved in sports from an early age.”
The National Business Review’s ‘Lunch in the Boardroom’ series features talks with leading directors and chairman who share their insights about governance and lessons learned in the boardroom.