Leadership Principles and the Director

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Hi everybody and welcome back to Strategy, Leadership and Impact. I’m your host Blake Repine. I had a really, really great week this week actually. I attended the Company Directors Course through the Australian Institute of Company Directors or AICD.

 

It was quite a great experience over the whole five days. Each day we had a different facilitator. Each one of them did an amazing job. But what I really want to talk about today was actually day two of the course. It was led by Elizabeth Jameson who was very experienced board director. I believe she has an organization called Board Matters that she does a lot of consulting to boards on various things as well as of course facilitates part of the Company Directors Course for AICD.

 

On day two, we actually talked about director’s responsibilities and the board’s legal environment and Elizabeth actually referred to it more as an ethics day rather than a legal day and you can kind of see why if you actually have ever done the course yourself or are familiar with a lot of the principles and things that directors have to abide by or that fall within the direct responsibilities.

 

Two areas in particular that I wanted to talk about were first, directors have the duty to act with care and diligence on behalf of the organization and they also have a duty to act with loyalty and in good faith of the organization.

 

Elizabeth did a good job of summing up care and diligence as not being slack or lazy in your duties and then the loyalty and good faith as not being selfish.

 

Some of these principles really kind of tied into my previous life in the army as a non-commissioned officer and one thing that we lived by was they created the non-commissioned officer.

 

Part of these principles are actually going into a book that I’m currently writing called “The Battlefield to the Boardroom” which I hope to publish either by the end of this year or early next year. So there, I’ve put that out there. You can hold me accountable to that.

 

But anyway, within the NCO creed, there’s a couple of lines that has always been in the army. I actually say, “What have I learned? What can I actually carry over into my career that I might go into in the civilian world?”

 

As I went up through the NCO creed, I actually found that there’s a lot of principles, leadership principles within that that actually do transfer over 100 percent and I’ve actually stuck to these and by doing this, it has actually helped me to be successful. But within the first paragraph of the NCO creed, it actually – the last end bit of the second to last sentence and the last sentence says regardless of the situation in which I find myself, I will not use my greater position to attain pleasure, profit and personal safety. That comes right back to that loyalty and good faith as a director that you will not use your greater position. You will not use your position as a director to attain pleasure, profit or personal safety.

 

Normally it could be profit. From some of the information you get from the board, information you receive from outside that might affect the board or potentially be in conflict with your role in the board, things like that. But actually looking at the best interest of the organization and not profiting from that information and also that personal safety as well and things aren’t going well.

 

How are you shielding yourself and stuff? Are you ethically kind of being there helping to solve the problem? Are you intentionally shielding yourself from the problem to protect yourself? That could cause issues too. So that really kind of brought that home to me as well as a director. It’s very similar type principles there. Then the next one was kind of going into the second paragraph of the NCO creed. There are three paragraphs altogether by the way.

 

It actually says “I know my soldiers and I will always place their needs above my own,” and you could easily replace that word “soldiers” with organization, staff, whatever it might be and say, “I know my organization,” or “I know my staff,” and I will always place their needs above my own.

 

Being a director of a company and also being a leader within an organization or a leader anywhere is very selfless. You should always place the needs of others above your own. You’re there to serve as a leader, not there necessarily to have those people serve your needs.

 

Then another line within the NCO creed and this is actually just before the one I just spoke about. It says, “I am aware my role is not commissioned officer and I will fulfill my responsibilities inherent in that role,” and you can actually replace that phrase “non-commissioned officer” with “director”. Say, “I’m aware of my role as a director and I will fulfill my responsibilities inherent in that role.”

 

You could replace that with any title you have, whether it be chief executive officer, director, executive director, manager, supervisor, whatever it might be. I’m aware of my role as whatever you are and I will fulfill my responsibilities inherent in that role.

 

So in the responsibilities inherent in a role might not always be black and white. It might not always be written down on a piece of paper in a position description or a piece of legislation or whatever it might be. Sometimes their expectations within roles that are unwritten could be norms within an industry or an organization. It could be something related to culture. There’s no telling what it might be because each role might be a little bit different of things that are inherently implied that you will fulfill within that role.

 

Then another thing we actually talked about, of course one of the big things is the Hayne’s commission into the financial services industry and the Commonwealth Bank APRA Culture Report for 2018. They actually listed four cultural traits that actually weren’t that great.

 

However there are two really that I want to hone in on. The first one is I said that – a culture of reactivity, so slow, legalistic. The sense of chronic ease rather than chronic unease. Then another thing they said was there was a culture of complacency and overconfidence, lack of appreciation, non-financial risk.

 

Whenever you look at risk of course within an organization, there are multiple risks. However, we do spend – tend to spend a lot of time focusing on those fiduciary risks because they’re often incredibly important in the organization. However we do have other risks around work health and safety, culture, whatever it might be.

 

But complacency. So one of the things I actually took quite seriously from being deployed to Afghanistan and Iraq is complacency kills. Complacency kills.

 

Whenever you get overconfident because something is going very well, whenever you feel like things are going you way and you have an advantage or whatever it might be, it could be in your regularization, something will happen.

 

In combat, it’s your enemy. They’re constantly reviewing what you’re doing. They are watching what you’re doing. They’re watching very closely. A lot of times we don’t give them the – I guess the consideration that we should because they’re typically a lot smarter than we give them credit for. But they are watching and they’re waiting.

 

Whenever you fall into routines, that’s whenever they get you. The same thing too. Other organizations, if you’re large enough or in a small market regardless, are watching what you do and your competition is watching what you’re doing.

 

Whenever you get complacent sometimes in your operations, they will look to gain a competitive advantage over what you’re doing because they can see that you kind of lulled into this sense of – you know, that confidence.

 

The same thing too. We can do that as leaders in the organization. We also do it from a board perspective too. Things are going smooth. The organization is on great, sound financial footing. We don’t really have to worry about anything. Nothing is really happening. Nobody has been into the work health and safety reports and things like that and we just get this complacency and this overconfidence and then bam, something hits us.

 

A workplace accident happens and someone is either injured or killed or something within the culture breaks down or suddenly something within the financial side of things just – that we didn’t realize was creeping up and then bam, it hits us.

 

Whenever it does, you get snapped out of that sense of complacency. A lot of times it is too late and then you’re reactive and you’re trying to play catch-up, trying to do this and it is not good for the organization. It’s definitely not good for you. Always operate with that sense of unease. Never be satisfied with all the information you have. You will never have 100 percent of the information that you can possibly get but constantly ask questions to get more information. Have the courage to ask questions in the boardroom or have the courage to ask questions in any environment, any setting until you get the answers where you’re satisfied and good enough.

 

Like I said, you will never have 100 percent in the information. But as long as you have as much as possible, whenever something does happen, you might have been expecting it or you at least understand enough about the organization and how it manages risk, how it manages work health and safety, didn’t know what they’re going to do in order to overcome whatever has happened or to mitigate whatever has happened.

 

That’s the thing. When something has happened, you want to have those things in place to mitigate it as much as possible because trust me, there is no such thing as a perfect organization that never has any issues. There’s no such thing as a perfect day or there probably is a perfect day. But the thing is, sometimes bad things happen. They don’t necessarily always have to happen. But we need to make sure we have systems and processes in place to keep them from happening, to minimize the risk, to minimize the risk not only to the organization but to the people as well and communities and whatever it might be.

 

So with that, don’t get complacent. Whenever you kind of put all this together in this – being a sense of unease and things, it can be incredibly stressful. But it shouldn’t be stressful. You should really enjoy being a board member. You should really enjoy being a company officer, whatever it might be. But some people actually cannot – they focus too much on the liabilities and responsibilities and things. It really starts to drag them down and it creates a lot of stress within their life.

 

So not everybody can handle it. So it’s not for everybody. Going back to the same thing around care and diligence, a lot of people are very time-poor. I’ve mentioned this in multiple podcasts that I’ve done today. Executives are incredibly time-poor. Directors a lot of times are incredibly time-poor. However, you have to take the time. You have to make the time to read your board papers. You have to take the time to get to know the chief executive, get to know the senior exec. You have to take the time to investigate the organization’s industry. You have to take the time to actually get to know that organization.

 

What is the culture like? That’s the personality of that organization. What is it like? Is it actually in line with what you think it should be or the board thinks it should be?

 

If you’re not willing to take the time to do these things, then you should question why you’re on the board. A lot of times people will choose to be on the board of a not-for-profit for example because they really care about what it does and things like that. They actually don’t have the time to give it their full attention and their full commitment that they actually should.

 

So it can actually do their organization a favor at that point and step away if you need to. But there again too, if you’re on a board or if you’re a leader of an organization, remember you’re not there for yourself. You’re there for the organization. You’re there for the people in the organization. You’re there for the community that serves. You’re there for the shareholder, stakeholders, whatever it might be. So again coming back to that selfless service.

 

So anyway, that’s kind of my two bits about it I guess you can say and my point of view. I hope you have a great week and I look forward to talking to you again next week. Thank you very much. Take care.

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About Me

Hello There! I’m Blake Repine, an experienced Executive Director with a passion for leadership, inspiration and results.

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