Career lessons from Australian Philanthropic Services director John McMurdo GAICD

“Doing good is good business,” says John McMurdo GAICD.

John McMurdo is the managing director and CEO of ethical fund manager Australian Ethical Investment Ltd. He is a non-executive director of Australian Philanthropic Services and a member of the Financial Services Council fund management board committee.

McMurdo’s board and directorship experience spans two decades, ranging from early-stage venture and private equity-backed companies to trustee boards, foundations, not-for-profits and ASX-listed companies. He has also spent 20 years in CEO roles at leading investment and wealth management businesses and has considerable  expertise in private client advisory services.

1. A purpose-led business is a functional and profitable model

Fifteen years ago, there was a flashpoint in my career when I decided to walk away from a company based on what I saw as a values misalignment. I was MD at the time, so there was quite a bit on the line financially, but there was also a lot in terms of my reputation. Being purpose and values-driven was more important to me than compromising on my values.

I had some fears my choice would be detrimental to my director and executive career, but it has been quite the opposite. More doors than I could have imagined have opened, and each has been aligned with my values. However, in some Australian boardrooms there is a prevailing belief that being purpose-led or socially responsible is a cost, and therefore can be detrimental to profit or shareholder value.

The complete opposite is true in the modern world, where values play an increasingly important role. Australian Ethical is a for-profit, ASX-listed company and the highest-rated B Corp in the country, which makes it a magnet for a wide range of stakeholders. The number of customers it serves has trebled over the past five years and we have a queue of talent wanting to be employed.

It’s clear the model is self-reinforcing. Businesses operate in a much broader ecosystem and with a much broader set of stakeholders than just shareholders. Doing good is good business.

2. Walk a mile in someone else’s shoes to become a better leader

As a director, it’s easy to speculate about customer needs and the mission of your organisation from your cosy boardroom. I first learned the value of retaining empathy and human understanding when I was in my first CEO and director role in life insurance. I was completely focused on customer numbers, claims ratios and call answering times, but when I met an actual claimant, a recent widow with two young children, it changed things. She was in total fear about what was next for her and her kids. Being able to reassure her she had a financial backstop was humbling.

In June 2024, I did the Vinnies CEO Sleepout because I wanted to understand the issue of homelessness on a personal as well as a system level. As directors, we can get caught up in business models, dashboards, metrics, risk and governance, which is all very important. But a deep understanding of the customer and cause is even more fundamental, and you can get that from walking a mile in someone else’s shoes. It makes the experience visceral.

There are an estimated 122,000 homeless in our so-called “lucky country”. It was eye-opening to speak with people with lived experience of homelessness and to understand they included people who had previously run businesses, worked in the finance sector or were journalists. It was a fascinating experience and one I highly recommend to any director.