A new report finds that good directors possess strong commercial and governance acumen, specialist knowledge and experience — and that boosting gender diversity results in a broader skills mix and other benefits.
If exponential technologies, regulatory change, geopolitical tensions and climate transition are already testing the mettle of boards, do they have what it takes to navigate the risks and opportunities of the future?
This was a question posed by the 30% Club Australia and Deloitte Australia in their 2022 report, Bold Moves in the Boardroom: Skills and capabilities fit for the future. Drawing on the insights of 31 leading members of the board community, it found that future-fit boards require strong governance foundations, plus a broader set of skills and capabilities.
Where will these skills come from? A 2024 follow-up report, Green Shoots of Change in the Boardroom: Review, launching on 12 March, shows the appointment of directors from non-traditional backgrounds can carry the additional benefit of increasing gender diversity at the board table.
Board directors are often former CEOs or CFOs — roles that are more likely to be held by men. Data from Chief Executive Women shows 91 per cent of ASX 300 CEOs are men and 82 per cent of CEO pipeline roles are held by men.
The Green Shoots of Change report shows that as at 2021, less than eight per cent of directors had previously held roles such as chief information officer, chief marketing officer or chief people officer, with the latter two disciplines dominated by women.
The report encourages increasing the skills base of boards to enable greater diversity of thinking, which can open more opportunities for women and can also assist with the gender diversity aspirations of boards. To illustrate this point, the report includes five case studies that demonstrate the recent appointment of non-executive directors with executive backgrounds in customer/marketing, digital or human capital, all of whom are women.
Along with strong commercial and governance acumen, each director was appointed for the specialist knowledge and experience that they bring to the board table. Gender diversity was an added bonus.
Case study: Cuscal board follows digital-first focus
When it comes to the traditional skillsets of governance, law and finance, the board of payments infrastructure business Cuscal has long had it covered. But with digital technologies shaping the future of payments, the board needed a director with a digital-first focus.
Claudine Ogilvie GAICD was appointed to the Cuscal board in February last year and holds qualifications in quantum computing and AI from Massachusetts Institute of Technology. The managing director for O&O Consulting, she is a former non-executive director with Youi Insurance and has held roles such as CIO for Jetstar and director of digital and innovation for Compass Group in Asia Pacific.
Cuscal chair Elizabeth Proust AO FAICDLife says Ogilvie has the “deep technology skills” the board required, but that the search presented challenges. Despite a clear brief for candidates with skills in technology, data and AI, the executive search firm delivered a list of generalists, most of whom Proust already knew.
“We moved to another search firm that immediately understood the brief and the interesting thing was that of the 12 or 13 people on the list that they came back with, I don’t think I knew any of them,” says Proust. “We didn’t say we were looking for generational change, but by specifying the skills we did want, we were forcing the search to a different demographic and a different geography.”
Along with injecting additional skills to the board, Proust says Ogilvie’s insights are helping to shape Cuscal’s future digital strategies.
“The future for payments is not cash and is not cheques, it’s in the digital world,” Proust says. “We had a period in 2022 where we were dealing with a very significant number of change programs. By necessity, we were involved in questioning and probing. What Claudine brings, however, is the next level of skills to the mix.
While Cuscal’s board has a 50:50 gender split, Proust says the appointment of directors from non-traditional backgrounds can bring greater gender diversity to the board table.
“I remember being on a board about 10 years ago, and I was chairing the people and culture committee when the headhunter came in with the list [of candidates],” says Proust. “The chair looked at it and said, ‘There are no women on this list’. The headhunter replied that there were no qualified women. So, we then found another search company. It would be the rare executive search person today who’d come back to you with an all-male list.
“If you're not looking beyond the next year or two about the changing nature of the economy, the sector, the company and what skills you need to not only survive, but thrive into that future, then it’s a reasonably shortsighted view,” adds Proust.
“You need to be thinking about the kind of people you need in the future and the sorts of skills they will bring with them. We were looking at diversity in all its forms, which is what boards should do.”
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