Margaret Devlin made conscious decision to become professional director. She made the choice sooner in her portfolio career than was perhaps the norm. Nevertheless, it has worked well for her.
Midway through last year, for example, she was appointed chairman of Australasian engineering and design company Harrison Grierson. She had already created company history when, the year before, she was appointed the firm’s first independent director.
Now the Irish born and educated infrastructure specialist ranks her career-change decision to slip out of the executive suite and in to the boardroom, as as satisfying as her equally life-changing 2006 decision to uproot from Britain’s green and pleasant lands and move to New Zealand.
Devlin’s successful executive career had, she says, convinced her that independent directors can deliver “real value” to board. And being an independent director was what she wanted to be. “As an executive in the UK, I had been exposed to the contribution independent directors can make,” she says. “I saw the transition to governance as fascinating career option for me.”
Devlin also liked the portfolio approach to her personal career development. The challenge of working with range of organisations rather than focusing on climb to the top at one enterprise appealed.
Consequently, Devlin is now the chairman of plumbing company CF Reese Group, and of Scott Sheet Metal. She’s deputy chair of WEL Networks, Waikato’s electricity infrastructure provider, and director of Christchurch-based construction, maintenance and management services company City Care. She’s also director of Hamilton River Hotel Group and member of the Government’s National Infrastructure Advisory Board. Her “give-back” to governance commitment is by way of chairmanship of the Institute of Directors’ (IoD) Waikato branch.
If Devlin believes independent directors can make difference to board performance, how does she feel about the worth of executive directors? Her response is equivocal. “Executives who sit at the board table must act in the best interests of the company and not necessarily in the interests of their executive portfolio. And I think it’s possible to make that distinction,” she says, adding that the effectiveness of that process often “depends” on the chair and composition of the rest of the board.
Designed to fit
Executive directors can, says Devlin, add value but boards should, generally speaking, comprise majority of independent directors. “There is no right or wrong answer to [the executive director] question,” she says. In her view, “the board structure must fit the organisation. Try to squeeze an organisation into preconceived idea and you won’t get the best value from it.”
Devlin’s executive career in the UK included six-year stint as managing director of South East Water. In the year before she migrated to New Zealand, she was also chairman of Water UK. She worked in the water industry at senior executive and director level for 16 years.
She obviously has deep understanding of the infrastructure sector, but what particular personal skill sets will she bring to New Zealand board tables? “I understand the role and function of value-adding board,” says Devlin. She is obviously conversant with best practice governance rules, responsibilities and processes. “But more importantly, I also possess good judgement, communication and inter-personal relationship skills.”
Devlin understands the importance of board compliance and of being able to tick the boxes of best practice governance but, she says, her particular board contribution comes from her ability to focus on adding value to an organisation’s performance. “I believe I am good at identifying where new opportunities lie.”
Her ability to add value to an organisation comes, she thinks, from combination of strong understanding of business processes and equally deep appreciation of the particular industries or activities with which she gets involved. “And I am never afraid to ask the stupid questions,” she adds. “Stopping board conversation to ask fundamental questions about direction is sometimes very helpful.”
Devlin reads widely and keeps herself well briefed on local and global issues and on international trends. “You need to be aware of what business is capable of doing. You need to understand the context in which the organisation operated and know your management and leadership capability. I am very pragmatic director.”
Having made the decision to earn living as professional director, on how many boards can professional director serve and still do justice to each individual enterprise? “That’s personal issue really,” says Devlin somewhat skirting the question. “I currently serve on six boards and that’s probably my personal limit. I know others who serve on more. It’s case of knowing your level of ability and comfort. It goes without saying that being director isn’t just about turning up for board meetings. It takes good deal of work and effort to do the job properly,” she adds.
Prepare properly
Being good director is, to Devlin’s mind, about “planning, preparation and participation”. Effective directors must plan and prepare for board meetings and other organisational activities. And these processes take time. Participation, she says, is about asking questions and listening carefully to what is said and then making soundly researched suggestions at board meetings. Directors must be “properly prepared” to participate properly and positively.
Being well prepared doesn’t mean directors are there to second guess management, says Devlin. But to be effective, boards must add value and grow the business. An effective board must, she says, clearly understand its role. “Boards should not be afraid to challenge management, but they should be equally willing and able to support management. An effective board,” says Devlin, “is also unafraid to make decisions. Those decisions may be positive or negative, but the role of board is to make decisions and move forward.”
Based on her experience to date, does Devlin think board composition and diverse directorship influence board effectiveness? “A board of like-minded people might be effective, but boards with more diverse thinking can take organisations to different, and oftentimes better, decisions,” she says. She’s convinced that “diversity of thought around the board table delivers deeper and richer decision-making process”.
Devlin applauds the creation of the “25 percent club”, designed to lift the number of women directors on New Zealand’s largest boards, but her call for greater diversity in board membership extends beyond bridging the gender gap. Increased diversity of board membership does not, in her opinion, end with the establishment of programmes to lift the number of women on our boards. “People also have to prove they are worthy of seat at the board table,” she says.
Kicking tick box
Boards are, according to Devlin, becoming more effective because they are being transformed. Boards are evolving from what she calls “tick box” process mentality to measuring and tracking their performance against strategy. There is, she says, growing realisation that strategy is essential to effective governance, but there is also parallel appreciation that the dynamics of board are critical to effectively delivering strategy. “That understanding will grow as boards evolve,” she adds.
The transformation of governance is exemplified by the adoption of number of more professional practices, says Devlin. For example, board and director evaluation is gaining greater traction. That trend alone is, she suggests, an important advance on the process of only evaluating and holding management to account. “Directors are starting to look at themselves and trying to understand how they can improve their personal performance. Directors are becoming more professional.”
The shift to more professional approach to governance is, says Devlin, being
