One of the questions I get most commonly asked is “what are the traits of an effective director?”
It’s an interesting subject, and having done this for a while now, I’ve found that there is no common answer as it really depends on a variety of contextual factors.
It all depends on what type of business you are governing, on what industry you are in, what your role on the board is and, really, what makes you tick.
A board needs diversity to work efficiently, and adding different perspectives to the decision making process is imperative for the success of the company. There are, however, a few things I’ve learned are important for balancing the challenges of being on the board of a young, high-growth company.
Change is inevitable – embrace it
For businesses like OFX, anyone in a leadership position needs to be comfortable with change. OFX has gone, and will continue to go through a lot of transformation. If you are used to a larger, steady organisation, a huge amount of change can make you a bit uncomfortable.
It’s also not only about being able to cope with the change, you need to embrace it and be able to adapt quickly, whether it’s to a new competitor landscape or to new leadership. I’ve experienced some truly intense periods during my time on the board, and it can be very frustrating at times, but it is also very satisfying to be moving forward.
Prepare to ask some difficult questions
Governing a young, innovative business isn’t stress-free, and if the company is also regarded as a growth stock, there is little room for trial and error. How do you act in the shareholders’ best interest, and at the same time promote the innovation that is necessary for the company to survive in the long run?
It’s the board’s responsibility to find ways to satisfy the different stakeholders while still giving the company enough time and resources to push through technological investments, but there might come a point when you need to apply the brakes.
As a director, part of your job is to make sure that the business is moving in the right direction. The executive team can become very focused on what they are doing right now, in this moment, and that’s when you may need to step in and say ”I know that you’re going down this track, but let’s just pause for a minute. Have you thought about this?”.
Enjoy getting your hands dirty
Something that is different about governing younger companies is that some mechanisms are not yet in place, and you need to be comfortable with getting your hands dirty. A larger organisation is like a well-oiled machine where there are processes and dedicated teams in place to carry out tasks such as reporting. In a smaller, fast-growing company, many team members are new, or you simply don’t have the headcount to make these things run as smoothly.
The benefit is that the board gets more actively involved in making sure the right teams are in place, helping to set the strategy and engaging in key issues around the business. It’s very hands on and you never have to ask yourself “where am I really adding value, apart from pure corporate governance?”.
Know that people are everything
Businesses that are going through a lot of change need a balance between people who have been with the business for a while and new people who have experience in what the future looks like. There’s a real challenge in recruiting the right talent, at the right time.
Not only do you need new people to fill business needs, but you also need to constantly upskill your workforce to make sure that the team can move with the times and keep bringing innovation to the market.
Find out what’s right for you
Lastly, you can never excel in something unless you have passion and enthusiasm for what you do. For me, it’s all about having diversity and variation in life. I have a range of boards in my portfolio – a range of sizes and sectors, for profit and not for profit – and I enjoy the wide range of experiences I get because they are so different. Look at where you think you can contribute, and go for it.
* Melinda Conrad is a non-executive director at OFX , previously known as OzForex,a Sydney-based online foreign exchange and payments company. She joined the board in September 2013 and is also chair of the remuneration committee. She holds an MBA from Harvard, is a Fellow of the Australian Institute of Company Directors, and also serves on the board of the ASX.
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