Joan Withers’ appointment to the John Fairfax board marks her arrival at the top of the media ladder she starting climbing as Wilson & Horton cadet journalist in the early 1970s.
Her 35-year ascent to the boardroom table has been an unconventional climb. As convent schoolgirl Withers was forced to choose between her (then) boyfriend and further education. Now married to her high school sweetheart, Brian, for the past 31 years, she feels vindicated that abandoning high school aged 16 was the smarter option.
After short stint as junior reporter Withers left the paid workforce for six years to raise her son who arrived 10 days overdue on her 21st birthday.
Much later it was another lifestyle choice that led Withers, in 1997, to give up the CEO fast lane in favour of life as professional company director. Since then she’s acquired directorships on the boards of some of New Zealand’s leading companies including: Auckland International Airport, The Warehouse Group, Meridian Energy, Tourism Holdings, and Feltex Carpets.
Never having wanted career with such gruelling demands on her time, Withers stepped down as CEO of The Radio Network in 1997. The move coincided with her appointment onto the Ceramco Corporation board, the Withers family’s decision to opt for the rural ‘good-life’ at Drury (south of Auckland), and the launch of her book Girl’s Guide to Business (Penguin 1998).
She currently admits to operating on two speeds – slow motion and full tilt. She believes that each directorship, on average, takes up to five days of each month. When she’s not attending to board duties Withers divides her time between more bucolic pursuits like making home preserves, running their 18-acre lifestyle block and competing in dressage events, which she took up around six years ago.
After seven years of board experience Withers warns against saying yes to any directorship just to get onto board. As well as doing due diligence on the company she recommends scrutinising the calibre of those you’ll be serving with on the board.
Her appointments to big boards from the outset meant Withers has sidestepped the hard yards often associated with smaller boards. That’s where she claims directors can tarnish reputation by association. Be equally cautious, warns Withers, of doing pro-bono work especially on NFPs (not for profits) or charitable trusts. “If the board is dodgy get out quickly. It could compromise your ability to get onto bigger boards.”
Once you’ve accepted directorship she says it’s critical that you invest sufficient time preparing for board meetings. To ensure the necessary papers are available four to five working days in advance she says the board needs to be tough with management. “I typically allow day to digest papers from management.”
It’s equally important, adds Withers, that all directors have the freedom to ask questions no matter how naieve they might appear. From her experience what directors often find when they force themselves to ask apparently stupid questions is that fellow directors need clarification on the same issues. “Boards are dealing with complex issues all the time. You have to be prepared to say let’s pause here, I’m not clear on that,” says Withers.
Essential skills
What essential skills do directors need to ensure they are capable of asking the right questions? First and foremost, Withers claims they need to be independent thinkers, widely read and have strong command of financial information.
She says while the Institute of Directors (IOD) provides useful introduction for those contemplating directorships, more needs to be done to develop directors’ capabilities, especially when it comes to financial literacy.
The decision to base her major MBA project (in the early 1990s) on the repositioning of radio station within the Auckland market convinced Withers of the level of financial literacy needed by today’s directors.
Boards take it for granted that directors will understand the financials. But she says the greater board’s financial literacy, the more likely it is to ask the right questions. “The minute you get into acquisition territory you need to understand what the key assumptions are. Having strong financial literacy was especially useful in helping to understand the dynamics that went into the Feltex IPO process.”
Because of stronger trans-Tasman links Withers says directors also need to be increasingly aware of the best practice differences between the two stock exchange codes.
And almost in spite of the heightened awareness of corporate governance requirements she says boards need to ensure compliance mentality doesn’t overshadow the broader agenda. Boards still need to focus on strategy as the main game.
Within any good board she says most of the time will be given to key operational and strategic issues. “The board is here to create long-term shareholder value. But other issues remain critically important, such as hiring (and firing) the CEO.”
From her perspective many chairmen don’t work hard enough to facilitate an understanding of how fellow-directors think and what influences their thinking. On some boards, especially NFPs and charitable trusts, she says the chair can be the weakest link. “The chair and the CEO need to be close, but the chair needs to have good relationship with all directors. I never feel inhibited contacting any chair (on any issue-specific matter) at any time.”
As one of the original directors on the Meridian Energy board she recalls how the chairman Francis Small worked hard to get disparate and geographically distant directors together within social situation. Withers says it really helped the board to hit the ground running. “Any board needs the ability to have dissension without undermining the tone of the meeting. The more you know someone the more likely you are to be honest in expressing your views.”
It’s not exclusively female preserve but she says women have an inherent ability to participate in the rigorous debate that goes on within complex social system – like board – without destroying relationships.
“Fellow directors can portray complex array of differing views so it’s important they have the opportunity to contribute their views,” says Withers. “Women tend to be good at reading situations and individuals. Often it’s just case of tabling an issue that may have been overlooked.”
While she’d prefer not to be the only woman on the boards she sits on, Withers is against any politically correct quota system favouring ethnicity, age or gender. From her observations women aren’t nearly as well connected as their male counterparts when it comes to appearing on the radar for directorships. She is not aware of any relevant women’s network.
While it is possible for women tap into male-dominated networks Withers says it takes time. “Having attended forum for business women within the past few months it finally dawned on me that our male counterparts have these networks available to them all the time.”
There are no shortcuts to be being shoulder-tapped for directorship. She says it’s all about working hard, and demonstrating core attributes including strong ethics, financial literacy and sound knowledge of business process.
It’s not new issue, but with the directorial stakes now higher than ever, Withers believes low pay will continue to cast shadow over the potential talent pool. She would like to see remuneration improve sufficiently to attract new blood.
She hopes directors’ remuneration will be “ramped-up” during the next round of AGMs. “Institutional investors see merit in adequately compensating directors, but ‘mum and dad’ investors often baulk at paying more for what they see as pretty cushy job.”
Withers believes her time spent as CEO was an excellent incubation for director’s role and urges CEOs to seek board exposure wherever appropriate. Because CEOs are (or should be) acutely aware of the line between management and governance they invariably work har
