TABLED Engineering Good Governance

Engineering was, and is, something of male bastion and that’s what London-born Crauford chose for tertiary-level study. She graduated with degree in chemical engineering from Newcastle and then went on to “do her doctorate” at Southampton in the University’s department of aeronautical engineering.
“There weren’t too many women there. I think I was the first to get PhD from that department,” she says reflectively.
Numbers may have increased in the past few years but, according to recent EU statistics, women still comprise just 20 percent of engineering graduates. That’s about the same proportion as female membership of IOD and it’s “disappointingly small”, says Crauford.
“I’m certainly disappointed with the number of females we have as members. They are increasing, but very slowly.”
Only five percent of directors in New Zealand’s top 100 listed companies are women, according to recent census of women’s participation in governance, putting us behind Australia, the UK and the US. Boards, according to Crauford, need more representative mix.
“Diversity on board is very important. Diversity in skills and capabilities and diversity in terms of background. We’ve moved on long way from where company director was either lawyer or accountant. There’s broader skill mix now.
“Part of that diversity is having more women, and people from ethnic minority groups. We wouldn’t go so far as to suggest quota but I agree women are under-represented on boards and in business generally at senior levels. I suspect if we addressed the last, then the first would address itself.”
Crauford’s interest in governance arose from her own career path. After working several years in the UK, first in the oil industry and then in banking. She moved to New Zealand in 1993 “looking for change”. Since arriving, she’s worked mainly in the energy sector, first with Enerco Gas in Auckland, then in Wellington with Transpower, initially as account manager and finally as general manager.
“Being on the senior executive team meant working extensively with the board. I had to understand more about their job in order to improve the interaction I had with them,” says Crauford.
For the past three years, she’s also been on the board of the Centre for Advanced Engineering, trust associated with Canterbury University.
Now, as IOD chief executive, she’s on mission to improve governance standards nationwide by expanding both the Institute’s reach and its support services.
“I’d like to work more closely with the Institute’s branches. There’s currently six and interest in setting up new ones in number of areas. I’d like to help that process and work more closely with branches to deliver services to members because for many members, the branches are what they see of the Institute.”
Crauford also wants the IOD to work more proactively with boards to help improve governance standards. “We get lot of boards asking for help and advice on how they should operate and I’d like to do more work in that area. So we’re developing more products and expertise around that.”
IOD training courses are important to members as are its best practice statements, which are continually updated and used by members as reference documents.
“People find them very useful. My feeling is they need to be more relevant to wider range of boards, particularly those of small to medium enterprises (SMEs). While we risk failing if we try to be all things to all people, we need to widen the relevance of IOD to smaller organisations.”
One example of new initiatives is the IOD’s board evaluation service, an online tool that helps directors by facilitating 360-degree feedback of their performance. Questionnaires are completed anonymously and the IOD collates them in report to the board chair.
“It’s something that could be done on paper but then it’s not really anonymous and people feel more inhibited about the comments plus it’s quite laborious for the chair to wade through. The online system is straightforward but very effective at evaluating board’s performance. We can evaluate CEO performance the same way.”
Director accreditation is another major initiative. Started by her predecessor, it is response to the ongoing fallout from past high-profile corporate collapses and the need to improve public confidence in board performance, says Crauford.
“There’s now more public scrutiny of what boards do and that underpins the sort of initiatives I want to put in place to lift overall governance standards.
“In future it won’t be enough for people to know that you’ve done okay in your corporate life to date so you’ll therefore be good director. Boards will want reassurance that the people they appoint know what they’re talking about, that they have commitment to training and keeping up to date with changes in law, and commitment to directorship as being professional occupation.”
It’s one of the reasons the IOD now gets more calls from people who are setting up new boards or are on the boards of small companies or not-for-profit organisations, says Crauford.
“They want to be sure they are doing everything right. And these are often people who don’t have access to large sums of money. It would, therefore, be useful for the IOD to develop products and services that are easy for SMEs to access. Because that is really New Zealand’s heartland.”