Boardroom Conversations with David Kirk

Season 2 Episode 7 – David Kirk: Investing in Australia’s tech start-ups, what big companies can learn from small ones, and how to prepare for board meetings

David Kirk MAICD is the chair of Bailador Technology Investments, KMD Brands and KiwiHarvest. He’s also a former CEO at Fairfax Limited and captained the All Blacks to their first Rugby World Cup victory. We discuss: investing in Australia’s tech start-ups, what big companies can learn from smaller ones, and tips on preparing for board meetings. Plus, lessons from the sporting field on how to build high performing teams.

Transcript

BENNETT MASON

Hello, and welcome to Boardroom Conversations, a podcast from the Australian Institute of Company Directors. My name is Bennett Mason. And thanks very much for joining us. In each episode, we'll have candid conversations with some of Australia's top directors, leaders and experts delving into their background and discussing many of the key issues that boards are grappling with today. Our guest this time is David Kirk. He's the co-founder of listed venture capital fund Bailador and chair at a range of companies including KMD Brands, Forsyth Barr and KiwiHarvest. David was also the CEO of Fairfax Limited and had an extremely successful career in the sporting field, captaining the mighty All Blacks to victory in the first Rugby World Cup in 1997. David, thanks so much for joining us in boardroom conversations.

DAVID KIRK

Very pleased to be here. Thank you.

BENNETT MASON

Now, as we just said, you've been a chair and board member now at several organisations. But why did you first want to become a company director? And what is it about the role that you find so rewarding now?

DAVID KIRK

Well, I think it's important. It's an important role. And I wanted to make a contribution to something. I think it’s important. I mean, I've seen just in my own experience. And we all see and in reading, online news sources and newspapers and watching news generally that governance failures do happen. So, it's an important role. And I was keen to make a contribution. having had an executive career that exposed me to boards, and I was on boards as an executive director, and I think that gave me good insight into what were some of the helpful capabilities to be a non-executive director.

BENNETT MASON

That transition from executive director to NED can be a bit tricky for some, a bit uncomfortable. As we said, you were the CEO at Fairfax, and you had all sorts of senior exec positions at a number of other companies. How did you navigate that transition from executive to board member, and was it difficult at all?

DAVID KIRK

Well, I think the actual, just in terms of my career development, the thing that was most difficult for me, moving from a full time single executive position, which was all consuming in terms of time and focus and thought to a more of a portfolio-type life where I was starting my own investment fund, but also moving into some non-executive roles. The thing that I found most difficult to adapt to was the fact I needed to split my time and learn how to focus. One day it was this board and this company and these set of problems and challenges. The next day it was another set of problems and changes in a different company. So being able to compartmentalise my focus on the company I was particularly working with at that time, I found the bit to be the most challenging. After years and years of just being fully focussed on the same thing to have today.

BENNETT MASON

Do you have any tips or tricks? Are there methods that you came up with to compartmentalise your professional life that way?

DAVID KIRK

I think it just comes with time, you just learn to be focussed for a period and then drop that and move on to something else. but I mean, you can be structured about it, and you can set aside time during the week to focus on that board, that company, that set of issues. I'm not, I'm more what's bubbling to the top of my inbox at the moment? What do I need to do? I just do it and then move on to the next thing.

BENNETT MASON

So, you try to keep that inbox under control?

DAVID KIRK

Yes, I do. I try to keep up to date with everything that's coming in. I'm not great at, actually categorising or filing away emails. I just delete a whole lot.  But I yeah, I do. I think it's very important, actually, to keep you keep up to speed with what's going on in the email and other, other forms of incoming information, pretty crucial.

BENNETT MASON

Like we said, you've been on both sides of that CEO-chair dynamic. You were a CEO earlier, and now you're chair at a number of organisations. What do you think is the secret, as it were, to an effective relationship between the chair and CEO? What works and also, importantly, what doesn't.

DAVID KIRK

It's quite it's a very good question. And it's not easy. I mean, people are like: “Oh, people get along. That should be fun.” But it's not easy. It's quite a challenging role because you need to be a great supporter as the chair. You need to be a great supporter of the CEO and do everything you can to help them succeed. But at the same time, they've always got to know that, if things don't work out, you will be the person as the chair who walks in and sits down with them and said, this is going to come to an end. So, there's there needs to be that kind of relationship of absolute trust and openness and clarity.

DAVID KIRK

I mean, the that she has got to be very clear with the chief executive about what's expected. It’s just unfair for a chief executive not to know what the chair and the board generally wants from her or him. They need to be well informed about what success looks like and what the board is looking for. And then you need to have a professional, but also a bit of a personal relationship. You need to like each other. You need to want to work together. and you need to be knowledgeable about what's important to the chief executive. which usually means you need to understand the business that they're in. I mean, I think there are some situations where people who are just sort of pure governance people who can be successful. But much more often, I think successful chairs understand the business, know the business, and can be, a genuine, advisor, and down to, a degree of detail in the business, if the chief executive is looking for that.

BENNETT MASON

There is that line, though, right? There's, a danger that the chair or any board member becomes a little bit too involved. How do you check against that yourself?

DAVID KIRK

I think that's very dangerous. You're absolutely right. And I think the main thing to focus on for the chair is, you've got to be careful here because you are genuinely not accountable for the outcomes., the tasks that the CEO is required to deliver. And the board is, particularly a non-executive director as a governance body. It's not an executive body. The chief executive and management needs to agree the strategy. And the steps in the implementation of that strategy. and then they need to be charged with getting on with it and delivering it. and I don't find it that difficult not to do that because I know what it's like on the other side. And so, I know what it was like as a chief executive, and I knew what I had to do, and I did at some stages have chairs and other directors who would drift in and out and try and make decisions and so on. So, I know what it's like to see people cross the line. But I don't think it's that difficult not to do it. As long as you realise you are not - never put yourself in a position where people, the chief executive or anyone else can turn around as shareholders, maybe point out to you and say: “well, hang on, you did this. You're the one who ran off and did this acquisition.”  Or you made this appointment or something when it was really the responsibility of the chief executive.

BENNETT MASON

Do you think it's really helped you as a chair and board member, having that background as an executive, because you've sat in that chair for so long? you must have learned things along the way that help you now in the boardroom?

DAVID KIRK

Yeah. I do actually. And I'm an unapologetic supporter of people who have had senior executive experience being on boards and in many cases, not always, but in many cases, being really effective chairs because you just know the chief executive's life. You know what it's like, and you can empathise with them. At the same time, you know that the chief executive is the right chief executives and is taking responsibility. They don't want you to be anything more than a sounding board and a support, and to be empathetic when things go wrong, but not in any way to try and make excuses for them. And I think that's an important dynamic that it's hard to really understand, if you haven't been a chief executive yourself.

BENNETT MASON

We've been talking about that dynamic between the chair and the CEO. What about the chair and the other board members? How do you get the best out of the directors around the room to ensure you're all working as a cohesive team?

DAVID KIRK

Yeah. So, one of the absolute key tasks of the chair is to make a board work effectively. And there's a few things that I do, and to some extent, I do them fairly naturally because of my sporting background, probably more than anything. It's really, you want to deliver a high performing team, support and development it. You got to get to know everyone individually. So, every board member, they will come from somewhere. They've always had their own experiences. They have their own aspirations. They have their own background and capabilities to contribute. So, you've got to understand that. Then you've got to create an environment where people want to come to the board meetings. The board meetings are interesting. And they are committed to being on that board and to helping that company and to seeing that company succeed. And if that environment is there, you're most of the way.  Then everyone needs the opportunity to contribute. And some people can be more forward than others. So, it's important that as a people, everyone feels they're on the same level. They have the same opportunity to contribute in their opinion, and their position is given the same amount of weight as everyone else on the board. Sometimes, there’s opportunities to coach directors. “OK, you’ve got a great experience and capability in this space, but you really need to be able to contribute a bit more effectively in this space.” And having those conversations is helpful, for people. I would say if you really want a high performing board, you want to have a bunch of people that are really highly capable and focussed on results and want to see the business succeed. They get on well together. They like being around each other and the chair makes sure that everyone feels like they're involved and appreciated. And you make hard decisions, together.

BENNETT MASON

Let's just talk a bit about those hard decisions. You want the board to get along, but without doubt, there are going to be difficult discussions sometimes. And you will have disagreements. How do you, as a chair, try to resolve those disagreements?

DAVID KIRK

Well, you want disagreements on a board. You want different points of view. You want opinions. You want people who build on other people's opinions, but also correct them if they think slightly differently, might not be correcting them. It's just giving a different opinion; in their own mind they’re correcting them. But that's good. That's very healthy discussion in debate. You want that. What you don't want is conflict. What you don't want is people feeling like there's a personal slight there, or that person doesn't know what they're doing. they should just shut up and let me talk. And that's partly the type of people that you have on the board in the first place. And their approach to understanding team dynamics and understanding how teams operate most effectively. But there's no guarantee that directors are going to think that - there's pretty much a guarantee on good boards that people won’t all think in the same way. So, the chair's role is to facilitate the discussion that moves the decision making in a direction, in the end. It might not be definitive. you might have to come back and discuss some more. And some people might never quite agree, but good boards, with people with good EQ will see that the weight of conversation is going in a direction. they might not quite agree with it, but they'll see the strength of the arguments on the other side. And they will see that we will have a consensus, that this is the right thing to do. And that's the chair's job as to some extent, shepherd the conversation in a direction as it emerges what the majority of the board is thinking about. And to sum up, clarify and make sure that going around the room, that everyone is on board with it and don't feel it's being pushed through despite them.

BENNETT MASON

There are lots of different ways of preparing for board meetings, getting ready. Are there any steps that are “must haves” for you when you're approaching an upcoming board meeting?

DAVID KIRK

Read the papers. Make sure you've read the papers and you're across everything. And if there's something you're not sure about and you're not sure, you want to clarify or something, take the time before the board meeting to ring up another director, ring up the chair. even with the chair, lifting the chair in. ring someone, an executive, just to make sure you feel as if you're as well positioned as you can to contribute to a constructive discussion and debate. So be across the papers, be across the issues. Think about what’s your position, what do you really think and be ready for be ready for discussion.

BENNETT MASON

You mentioned that being a director is a portfolio career. How have you constructed your portfolio of boards? You've obviously got roles with all sorts of organisations. How do you pace them together?

DAVID KIRK

well, I've really mostly thought about what do I want to do. What's going to be most satisfying for me in my working career at this stage? And that's turned out to be a combination. The majority of my time is spent with Bailador, Bailador Technology Investments, listed growth, technology investment fund. And that's great because that's an executive role. It's an executive, director-type role. and we are the small team of nine people and partners and investment managers and directors. And so, we really, we have to manage our own business, Paul and I. So, that's great. That takes most of my time. And we do a lot of really interesting stuff around technology and investing and helping grow technology companies and then exiting them. and then there's the public company CEO roles, which is different skills. Sorry, not CEO - chair roles. Which is a different skill set and a set of capabilities. And you're dealing at a different scale. Certainly, at the beginning, in terms of the size of the companies and their challenges and their international reach. and then there's a bunch of non-for-profit things I do, which I really enjoy, and find is very satisfying and fulfilling in their own right.

BENNETT MASON

What sort of due diligence do you do before taking on a board role? Are there questions you ask people you speak to? What's the process?

DAVID KIRK

I'm not that formal on that sort of thing. the first thing for me in this stage is, do I do I like the business? Do I want to be working in that business? I mean, I'm sure it's great being on a big bank board, but for me that would be very difficult. Thousand pages of board papers to read through, lots of risk management, lots of regulatory requirement. so, I really just couldn't do that, I wouldn't want to do that. It’s just not something I'm interested in. So, I'm interested in businesses that are like KMD Brands which is Rip Curl, Kathmandu and Oboz which is a US footwear company, that is trying to do something really difficult, which is to take brands from this part of the world and become global brands. All the global brands, not all of them, but most of them come out of Europe and the United States, of course. Huge domestic markets and hundreds of years of being able to build these brands. So, taking footwear and clothing and outdoor equipment and so on to the world out of Australasia is hard. So being involved with that, I just find very interesting and challenging. I think the people are really important. I always look at who else is on the board and, and would they be fun people to work with. Would I enjoy working with them? and then thirdly, I think it's just contribution. Do I feel I'm the right person for this opportunity? Does my background and experience mean that I can make a genuine contribution? Because that's really what you want to do on a board. You want to feel like you are making a difference and making a contribution.

BENNETT MASON

You spoke a little bit about Bailador. I wanted to zero in on that for a bit. So Bailador is a listed venture capital fund. Some of our listeners might not know exactly what that means. So, can you describe what Bailador is and what it does?

DAVID KIRK

Yeah, it's not actually venture capital technically, in the nomenclature, in this part of the market. there's venture capital which is early-stage capital. So that goes into small companies relatively, small amounts in the first instance. and lots of companies, and the ones that succeed get more capital and on they go. We’re growth stage capital. And we’re focussed on information technology. So that's normally a stage where the information technology company has 5 or 10 million of revenue. They're well-established with their product and they have a clear market focus. They have a big, solid customer base, and recurring purchases from a customer base. And a big opportunity. And what they need is capital, and they need expertise or support.

and my business management expertise and my governance expertise is very helpful as is Paul Wilson’s, my partner, who comes out of a private equity background and governance background as well. So together, we started the fund, and we invest to cheques of $10 to $20 million at a pop into companies that are that growth stage. And we typically would have 10 to 12 companies in the portfolio. we invest the money, of course, the capital is important. And then we help with their growth plan, go on the board. And we work closely with the management. Usually, they're upgrading talent at the stage we enter. And often they are growing internationally. So, establishing international offices, and so on. So, it's a pretty, challenging but very rewarding work. And we've had some, some good successes.

BENNETT MASON

How does it work? Do the companies approach you, or do you approach them and offer investment?

DAVID KIRK

It’s a combination, it all sorts of goes in different directions in the ecosystem. People are reaching out for money and us finding people we approach and say: “Are you looking for capital?” Or: “Tell us when you are looking for capital.” Often their advisors are involved at the stage that we invest. So, investment banks and others will be involved and helping the companies find sources of capital. So, it comes from all different directions.

BENNETT MASON

And what is it that you look for in these companies? How do you decide when to invest and also when not to?

DAVID KIRK

Yeah, that's the key question. I mean, the quality of the people is crucial, of course, in these businesses, the founders. We meet some wonderful people and generally founders are great, but that's really important. The scale of the business is important. We talked before about sort of $5 to $10 million worth of revenue being a bit of a hurdle for us to demonstrate the maturity of the business. The type of business and the economics of the business is important. Different information technology businesses have different economics, gross margins and cost to acquire customers and the lifetime value of customers. All of the things that are important in tech businesses are growing. The growth opportunities are important, they can grow into a big market. And their plan. They actually pitch a plan. This is what we're going to do to grow, and we need to sign up to that. We can modify it a bit. We can help with that. And all those sorts of things go together. Valuation, of course, is a is a fundamental driver of whether or not we invest as well.

BENNETT MASON

And does Bailador always appoint board members to the board then after making an investment?

DAVID KIRK

Mostly we do, because we are large minority investors. Typically, would have sort of 10 to 25 percent of the company. So, that clearly would justify a director. But we wouldn't invest in a company that didn't want us on the board because, I mean, our track record. And increasingly in the market, we are developing the reputation for being the go-to company for helping companies at a certain stage, scale. And that includes in Australia and big markets like health care and financial services, but also outside Australia and all sorts of different markets from travel to software for managing volunteers. And legal and accounting software management, lots of different types of software. We can scale in other parts of the world. And we've got a good reputation for helping companies do that.

BENNETT MASON

I imagine with many of the companies that you invest in, the founder is still involved. They might still be running the company; they might still be on the board. Relationships with investors and founders can sometimes be complex. The founder will obviously often have an emotional attachment to the company. How do you navigate that relationship with founders?

DAVID KIRK

Yeah, I mean, they've all got an emotional attachment to the company and for good reasons. And that's great. The key is, and this is important, in due diligence. And before you make the investment, the key is the founder or the founders, are they open to support and advice and to listening to what they hear and making a well thought through decision and not just like: “my way or the highway. I know what I'm doing. I don't want anyone to give me advice or I'll tell you when you can speak up and when you can't” sort of thing. Those people, unfortunately, you just can't work with them. And we've come across very few of them. I would say most founders are very open and are very keen for advice because it's a very stressful job and you're emotionally and financially connected. This is your life. And when people come along and say, look, we've seen this before, we know how to help you. And they’re nice, decent people. Founders are mostly very open to that and very supportive. I will say there's usually a time when founders, the business gets to a stage where it's becoming more of a “manage the beast” as opposed to just love the technology and love the product-market fit. You got to actually manage a big organisation. And some of them rightly say: “Look, I want to move to another role. Can you get someone to just do all the admin running the company? And it's the new CEO.

BENNETT MASON

You're the chair at Rosterfy, which is one of the companies that Bailador invests in. How is being chair at a company like Rosterfy different to being chair at a much larger listed organisation like KMD Brands?

DAVID KIRK

Well, good question. Fundamentally not that much different in some ways. The agenda is important. And the board papers are important, and the board dynamics are important. And it's important that the board is generally influential on the company. But we're talking about private companies and smaller companies. And in those circumstances, the board meetings are pretty much all about growth. How are we delivering growth? What are we doing next? Do we need more people? And do we need to develop new products? Do we need more people and sales and marketing? Do we need to have an office in another country? So, it's very much how do we grow the company, but it's also growing the company efficiently. So, there are a lot of numbers.

I mean, it’s not seat of the pants stuff. It’s lots of numbers. And we look at all the numbers and we look at; are we growing efficiently? Are we capital efficient in our growth? And are we acquiring customers who are going to be very profitable for us in the long term? And all of those things are very important for Rosterfy going very well. But Rosterfy now opened offices in the UK and in the US and of course, here in Australia, which is looking after APAC. So, we've got a pretty big spread company. And so, I always find it quite interesting. Bigger companies, they might be billion-dollar companies and they're trying to grow outside of Australasia, they always find it very difficult. They can learn a lot from small companies like Rosterfy. These companies have relatively small revenue and valuations at the beginning. But they are out there they go and they put people on the market and they understand the ideal customer profile, and they just go about setting up a go-to-market, which is specific for their product and what they're trying to do. And yeah, over time they grow. So, I think there's a lot to learn.

BENNETT MASON

That's one point, that bigger companies could learn from smaller ones in expanding to other markets. Are there other lessons, too?

DAVID KIRK

I think not to get bogged down in the bureaucracy of governance. And I know that's much harder for public companies. And I know it's much harder for highly regulated industries. But we've had in investments and financial services, we are invested in financial services businesses. So, we’ve had at least two investments there and a number of healthcare investments, both highly regulated industries. And we are very conscious of the regulation, but we manage not to let it dominate board meetings. So, I think that's a big learning. And I think it's just a bit back to the basics for some public companies. If they find themselves getting bogged down, you've got to go back to what creates value here. And I've got to go to: how do we get more customers and how do we increase our margins, and how do we manage our cost base effectively, and how are we more efficient with that capital? Those are the things that you've got to think about. It's just a no-brainer at this stage that when you're working with these companies, we just put $10 million or 20 million into a company. That's the whole point of the company is to do something with that capital. So, the focus on capital efficient growth in smaller companies is just all day, every day. But I think bigger companies can bring themselves back to basics regularly and get focussed on what wealth are they creating for shareholders.

BENNETT MASON

Obviously, this is an AICD podcast, so I have to stick up for governance a little bit. It makes sense that start-ups, scale-ups are a very focussed on growth. But at some stage governance does become an issue. When do you think is the right time for a start-up, scale-up, growing business to start focusing on their governance and consider bringing on board, for example, non-executive independent directors?

DAVID KIRK

Yeah, governance is always important. I don't want to get me wrong saying that listed companies and big companies need to make sure that they don't get caught up in too much regulatory requirement and leave the shareholder value creation equation to one side, which most don't, of course. It's just very front and centre when you're in a smaller company. But governance is really crucial on these smaller companies. And we will, not long after we are investing, usually begin the process of having an auditor and having the accounts audited. We have very, I won’t say “strict”, but we have very strong views about financial reporting, certainly around monthly accounts and accuracy and lots of numbers that demonstrate that the business is making the right progress in the right way. And all of that is good governance. We have agendas and board meetings. We have the same conflict management approach that a public company would have. And generally speaking, apart from the public company overlays, the governance on a smaller scale is pretty similar in these small companies. And it needs to be. You don't really need to involve non-executive outside directors, unless they have real domain expertise, in these companies until they're moving towards a listing or something like that. So, prior to a listing, a year before a listing, you might put a non-executive director on, particularly if that person was likely to step up to be the chair at listing. But beyond that, unless they've got domain expertise, you probably wouldn't put a non-executive director on the smaller companies we invest in, in the fund.

BENNETT MASON

I wanted to ask you about, for want of a better word, the start-up “scene” in Australia. What's your outlook on the IT, the tech sector here? And do you think we have the right business environment here in Australia to encourage innovation and to help start-ups grow?

DAVID KIRK

Yes, I think we do. I think it's great. I think we're in good shape. I've sort of seen it grow from the bottom up. We founded Bailador, not right at the beginning, because if you go right back, you've got some people from the 90s have been investing in tech, for a long time. I can think of Allen & Buckeridge was a very well-known VC firm here for a long time. And there were others who were leaders. But there was a real kind of flowering about 10 or 12 years ago. And the ecosystem has really grown through that period. And I think we've got a pretty sophisticated ecosystem. There's plenty of capital available. There's plenty of founders and lots of good start-ups. I don't have any particular position to take with the government, with the federal government or state governments about assistance for the sector. Because I don't really think the sector needs it. Great companies will always find capital. You don’t see many great companies that are not getting funded. And so, I think the ecosystem is in pretty good health.

BENNETT MASON

We're obviously in a very different interest rates environment. For a long time, rates were very low. Money was cheap, capital was flowing around somewhat freely. There's been a change since then. From your point of view, how have you seen that change manifest? Is capital a little bit tighter to come to for some organisations?

DAVID KIRK

Yes, it is. And that's for a few reasons. One is international almost fly-by-nighters. People who don't really have an office here, but they have people who are responsible for making investments into Australia and New Zealand, who are just chucking capital down here and throwing it at whatever they could find. That's all disappeared. It's gone away. I also think family offices who had families who'd made a lot of money in something that wasn't technology, jumped on the bandwagon without really having the sort of expertise to know what they were investing. And pre-IPO funds, funding has dried up because there are no IPOs at the moment. So, lots of sources of pretty loose capital have disappeared. And that's good. That's healthy for the industry. The biggest impact really is on valuations, because of the very low interest rates, of course. People can not make money for a long period of time. And it doesn't hurt you because the cost of capital is lower. Well, it’s arguable. The cost of capital and the equity cost of capital and the sort of things that we do never goes down because you're dealing with the risk, the opportunity cost of capital is still very high. So, we've seen valuations come down. They took a while, but they've come down and that's good. We've seen much, much less opportunity for IPOs. But in many cases, that's been sensible because some of the IPOs that happened in the easy times, should we say, they were too small. They were not developed enough technologies and not strong enough companies to be able to offer public company investors a clearly well understood pathway, and to be able to forecast accurately. So that's probably a good idea. But there's lots of good companies, bigger companies that are probably ready to list or becoming ready to list. I think the market opening for IPOs again would be good. I think, hopefully we'll see more of that in the next year or so.

BENNETT MASON

What needs to happen for those IPOs to start flowing again?

DAVID KIRK

It's funny. It's a bit of a circular argument. It needs to happen. When one happens, two happens. And when two happens, three, four, five happen. There's just a sense of you have to get over some kind of a lip. Guzman & Gomez was helpful. Not on the technology space, but it was nevertheless a highly priced and highly valuable IPO. So, once some of those start happening, it just gives investors’ confidence they can go into an IPO, and they can see the IPO, the company trade up after the IPO. And so, there's a sense that yes, you want to be in IPOs. You want to support IPOs. It’s a confidence, thing. And we've seen it before, it'll come back.

BENNETT MASON

We talked a lot about your business roles, but we should spend some time on some of the other positions you hold. You're also the chair of KiwiHarvest in New Zealand, which is similar to OzHarvest here in Australia. And for a long time, you were the chair of the Sydney Festival. Why did you want to be involved with those particular organisations or some of the NFPs you've been on the boards of? And how do you balance your commitments, your time between NFP organisations and for-profit companies?

DAVID KIRK

Why do I want to do it? Mostly because it's just you're attracted by the quality of the people and the quality of their purpose, their mission. And I do have a lot of experience and have developed some capability, some useful experience in helping with the governance of companies generally. And that is so valuable for not-for-profit companies. It's so valuable to help set them up with a mindset that is the social venture mindset, as opposed to the charity mindset. So, they're there to deliver social good, so they're not making dollar profits, but they are delivering great benefit for people. But they're doing it with money, other people's money, shareholders’ money, often donors’ money, grant money, whatever it might be. And they need to get a return on that money, and they need to report, and they need to have good numbers the whole time. And we need to have good board meetings, we need to have an agenda. And we need to have a growth plan, and we need to be executing against that plan. And when things don't go right, we need to draw the appropriate conclusions and change course. And we need good people, and we need to train those people and develop those people. All the things you do in business, because it's just natural for me to see that as the right way to run a business, you bring for a not-for-profit and it just makes such a difference. So, I think helping those businesses and seeing those businesses thrive because you bring that, I bring that governance and that capability, and that experience gives me a lot of satisfaction. And I'm delighted to see the companies grow and deliver on behalf of the people that really need them. So that's the reason I got involved.

BENNETT MASON

I mentioned that you just left somewhat recently as the chair of the Sydney Festival. You were there for nearly a decade. Was it hard to leave the role, and how do you know as a chair or a board member know when it's time to move on?

DAVID KIRK

Yeah, the Festival was a little bit different than a not-for-profit because it's a very well established, well-run organisation with a strong board. And I love working for the Festival as a director because, just great people and I don’t get so much involved with artistic people in most of the other things I do. So, it's lovely to meet people who are doing lots of things in the arts. They're very capable and very successful, both on the board but also in the festival themselves. And then of course, the people, the show, the festival we put on every year has lots and lots of acts and people that come from all over the world to do it. So, I think I got much more enjoyment, almost got more out of the festival than I gave to it, but I was delighted to make whatever contribution I could.

BENNETT MASON

You've been involved in the arts, you've been involved with NFPs, with business. But of course, you first came to the public's attention on the sporting field when you captained the All Blacks to victory in the 1987 Rugby World Cup. Many people will have seen the photo of you holding aloft the William Webb Ellis Trophy. I wanted to ask you a little bit about your sporting career. Are there lessons from rugby that you've applied to your executive career and now your board career? Are there other lessons on leadership or just on being successful?

DAVID KIRK

Yeah, I think there are. There are both. I mean, on the being successful, I think when you play high level sport, there's no doubt you have to be ambitious and competitive. And I think that's the same in a lot of endeavours. You have to want to succeed, and you have to have clear goals and go for them. I think planning and organising and understanding that nothing comes of nothing. You have to work hard to be successful. I think all of that is just absolutely just part of the sportsman's life. And then there's all of the team dynamic. Obviously, you've got your own sense of what you want to achieve as a player, but you can only do that through a team environment. And you need to contribute to a team environment. And there are lots of sub teams in most larger sports teams. So, you have to be excellent and expert in interacting with two or three other players in your sub team. And then that has to fit into the whole team’s plan and way of winning. So that's very similar to business. So, there's a lot of that. And then there's a whole range of things that are just about building a team and making a team work as a world class team. As opposed to a bunch of people that turn up on Saturday morning and have a good time.

BENNETT MASON

You're still involved in sporting organisations, you're the president of the New Zealand Rugby Players Association, and you've written widely and commentated widely on rugby. Do you think governance at sporting organisations is different to some other sectors?

DAVID KIRK

It can be or it can't be. It just depends on, in some cases it's good. And in other cases, it's poor. When it's poor, it's often poor because people who have played the game, or at least have just been involved in the game from a grassroots level, feel like they have an ownership of the game. Or they have a right to be involved at the high level and administration of the game because they've given so much to the game. So, the administration becomes in many cases representative, and some people represent this team, some people represent that team, some people represent another group. And that's always problematic because when people go to a board, and they sit on a board and they're representative of something else, they’re there to push the barrow of a particular subsector of the game. That happens much more often in sport than it does on other boards. And often you find that suboptimal decisions are taken because people refuse to go along with things that are not in the best interests of their sectional interest.

BENNETT MASON

I suppose also in sports, you especially get federated models where you do have people who literally represent their state, their province or whatever it might be.

DAVID KIRK

That's exactly right. The federated model delivers that kind of representational governance model, and invariably it's substandard.

BENNETT MASON

How do you get that balance right, though, at sporting organisations? Because you do want to have people who know the game, who come from the game, have lived the game. But you also need outsiders. So how do you get that right? That mix of insiders and outsiders working together?

DAVID KIRK

Well, I think the first case is you professionalise the appointment process so that the appointment of the governing body is done in a highly professional way. And it's done with a clear end in mind, which is to produce an independent board, independent of sectional interest. And with people with the capabilities and the experience to deliver on the requirements of the code. And they invariably split up into a big bunch of high level financial and commercial challenges, and engagement and grassroots, amateur level sport. And those two have to both be nurtured and invested in and supported. And it's not easy to find boards that have the right balance of all of that. But overall, they need to understand that they are governing on behalf of the whole game, not any particular interest. And they are governing both, they've got to have the capability to govern large commercial challenges and engagement and amateur people who just love the game and want to play it at a lower level.

BENNETT MASON

David, I could happily talk sports with you for the rest of the day. But you've already been very generous with your time. So, thank you for joining us here on Boardroom Conversations.

DAVID KIRK

Thanks Bennett.