Navigating the Board Pack: Strategies for Information Overload

[00:00:00] Intro: Welcome to Minutes by boardcycle, where in each episode we pack the insights from one of Australia's boardroom leaders into just a few minutes.

[00:00:10] Intro: In today's podcast, host Richard Conway interviews Alison Watkins, director of Wesfarmers, CSL, and member of the board of the Reserve Bank of Australia, on her top tips for directors to prepare themselves ahead of board meetings.

[00:00:28] Richard: Hello and welcome to the minutes podcast. I'm your host Richard Conway, and today I'm privileged to be joined on the podcast by Alison Watkins. Alison has had an amazing career with perhaps too many achievements for us to go through on our short podcast, but currently she's the Chancellor of the University of Tasmania, a Director of Wesfarmers Limited, a director and chair of the Audit and Risk Committee at CSL Limited, and a member of the board of the Reserve Bank of Australia.

[00:00:57] Richard: Alison, welcome to the podcast.

[00:00:59] Alison: [00:01:00] Thank you, Richard.

[00:01:01] Richard: Alison, let's jump right in with the subject for today's podcast, which is talking about how you prepare for board meetings. And so at board meetings, it's at board meetings that organisations make their most mission critical decisions. So it's critical for every organisation to use that time to its maximum value.

[00:01:23] Richard: So directors need to turn up very well prepared for that. And I wanted to ask you if you could tell us a bit about how you prepare yourself ahead of a board meeting, and to start off with to understand when you start that preparation process.

[00:01:37] Alison: Sure, Richard. Well, I think in, I try to be in an always on mode to as much an extent I can. So as a director of companies, I think it's important not to just have the mindset of it's all about the meeting and it's reacting to the papers that you get, but to be [00:02:00] always alert, I suppose, to what's going on and how those might be relevant for the organisations that you're involved in.

[00:02:06] Alison: So that might be through just what you're reading. I have a good little system where, I have a number of publications and podcasts that I like to listen to that give me particularly more of a, sort of a global perspective as well as a domestic one. And then when I see things that are interesting, I just have a habit of forwarding those to my app that I use filed under each of the organisations that I'm involved in.

[00:02:35] Alison: And then as I get closer to a board meeting, I'm going back to that and saying, okay, now what did I read that was relevant? And how might that be something that I can incorporate as I prepare for a particular meeting? So that's one aspect of it that's "always on" mode. Then, I'm involved with Wesfarmers, of course, which has great retail brands like [00:03:00] Bunnings and Kmart and Target.

[00:03:01] Alison: So it's very easy to be always on because you're always in and out of those kind of outlets. So having a customer and a consumer experience and really thinking about it from the perspective of that director role that you hold, but at the same time, how it's feeling to go in and experience the value proposition and so forth.

[00:03:21] Alison: So lots of things like that. You can always be on. And I think that's a really important mindset to have. Then of course, when you actually get to receiving the papers for a meeting, that can be quite daunting because typically there are many hundreds of pages and a lot of detail that you have to try to assimilate.

[00:03:44] Alison: So, I guess everyone does it differently, but for me, I really try to start with a bit of a scan of, what's an overview of what is in the papers, what's coming up for this meeting, [00:04:00] combine that with the external insights that I've been picking up, and say, okay, well, from that, what do I see are the priority topics for this forthcoming meeting?

[00:04:12] Alison: And those might include some recommendations, they might include strategic discussions and so forth.

[00:04:18] Alison: And then I also overlay a view of what are the topics where my colleagues will value my view in particular, or expect me to have thoroughly considered something. Obviously, as an Audit and Risk Committee Chair, for example, I think you have a particular level of responsibility and due diligence that your colleagues would expect of you.

[00:04:42] Alison: So then I kind of go from there to process of reviewing the papers, and those things that are priority topics are where I think my colleagues would expect me to be all over it, I'll definitely make sure I've got a deep pass on those. The other [00:05:00] things, just because of the time constraints, quite often it can be just a speed read. And then I think you go through a bit of a process of thinking, okay, ahead of showing up to the meeting, are there any particular issues that I really want to syndicate offline. Perhaps with other directors, or perhaps with the CEO, just to really make sure I understand what's going on, different boards have different styles on that, of course.

[00:05:23] Alison: And yeah, just try to pull together. Okay, these are the main questions that I'm going to focus on going into the meeting. And yeah, that really constitutes the ideal preparation from my point of view.

[00:05:35] Richard: Yeah, I think that's really interesting. What you said at the beginning about being always on, but I wanted to dig in a little bit on what you talked about scanning the board pack and prioritising and ask whether you, do that entirely yourself or discuss that with management or other directors to understand what the priority items are likely to be.

[00:05:58] Alison: Well I'd say different [00:06:00] boards do it differently and my preferred approach and in my view, the best practice approach here is to provide directors with some really good signposts. And that might come through a written MD's report, for example, that summarises the major issues from an MD's point of view as to what's going on and what's coming up. And, or an overview of the papers that some boards will provide that really provide a scene set of what are we going to be focusing on this time around at this meeting. What are the items for decision and really provides a good synthesis of what's important.

[00:06:43] Alison: When you actually get to the meeting, very often there will be a non executive director only time, which is a good opportunity to syndicate with your colleagues around, well, I thought this particular issue is really important. I want to make sure that we spend time on that and get a sense [00:07:00] of whether they're in the same place.

[00:07:01] Alison: But quite often those. Sessions are fairly short and not really an adequate way of fully synthesising what the priority issues for a forthcoming meeting are. So I do prefer having something that's kind of written that provides that sort of ingoing synthesis. I find that really, helpful.

[00:07:23] Alison: Not all boards do that, though.

[00:07:25] Richard: Absolutely and you talked earlier about it being a bit daunting when you receive the board pack ahead of the meeting. Because it has many hundreds of pages, and I think often it's quite common for directors to have a couple of meetings pretty close together, so that gets multiplied. Do you personally have any tricks that you use to kind of cope and synthesise that large amount of information?

[00:07:51] Alison: Yeah it is definitely daunting and when you sort of of look at those pages, a lot will be you know, [00:08:00] very detailed reports, appendices, and my approach really is to do the top scan to say, okay, here are the priority issues. Okay, here are the issues also where my colleagues expect me to be all over it, or to have some value to add and make sure that I then deep dive on those topics.

[00:08:24] Alison: Because if you just start at the beginning at page one and read sequentially through, that is really not going to work. You'll get absolutely lost in the detail and you might get halfway through if you're lucky. So it's really what you might describe as a bit of a porpoising type of approach where you're diving in really deep on the stuff that really matters or that your colleagues should expect you to be all over, and then you're doing a shallower pass on the rest. And you've just got to, yeah, kind of [00:09:00] triage the materials in that way or else you'll drown.

[00:09:03] Richard: Yeah. And I think you've probably indicated how you do this, but I wanted to ask about topics that are technical and outside your area of expertise and experience. So that might be the opposite of what you were talking about for papers where your colleagues will expect you to understand it. What about topics where you clearly don't have the background or expertise in that area?

[00:09:27] Alison: Well, I certainly, I get plenty of those. I don't have the same comprehension of the technical and scientific and medical issues as my colleagues do. So I think that's a great example of where I still have an obligation and I think value to add through, for example thinking about the risks and making [00:10:00] sure that I'm satisfied.

[00:10:01] Alison: We've got a good process for risk assessment. Thinking about resource allocation because we're always making judgments about, for example what projects, what R&D priorities to back and not back. So I think I can bring a useful commercial, but layman's perspective. And then you really do look to your colleagues who do have the scientific and medical background, who do have the deep knowledge of the industry and the sector, and who can overlay that and bring that to bear with your own views.

[00:10:43] Alison: And you end up, I mean, this is the whole benefit of a board that has a mix of skills, diverse perspectives, and combines those to make good decisions. So it's really satisfying yourself that, synergy, I [00:11:00] guess, between you is happening. And that you are bringing to bear your own ability to contribute. But overly contribute.

[00:11:09] Alison: So for me, usually, it would be asking a couple of questions. And quite often I might choose to ask those questions offline of one of my, expert colleagues or of management because board meeting time or committee meeting time is a scarce resource. It's precious and I think it's not respectful to the process if you occupy some of that time with basic questions. So I think there's some judgments you need to make along those lines too.

[00:11:44] Richard: Yeah, absolutely. I think that really emphasises the importance for having a good mix of skills on the board to, to make sure that you're getting the most out of those board meetings and that right people can focus on the papers where they can add value the most.

[00:11:59] Richard: And [00:12:00] lastly, Alison, I just wanted to ask you if you were a newly appointed director, what steps would you recommend to that director to make sure that they turn up to their first board meeting at a new company as well prepared as they possibly can be?

[00:12:15] Alison: I think going through a comprehensive induction process is really important. So that's before you roll up to your first board meeting, doing as much of the induction activities as you can. So you can really have a good understanding of the business of the company, of the main issues of the people and so forth.

[00:12:36] Alison: I think also connecting with each of the non executive directors and making sure that you've got an understanding of them and their backgrounds. The company secretary is an invaluable resource to kind of tune into some of the sort of softer issues because every board has its own style as well.

[00:12:57] Alison: And the culture of the board, the [00:13:00] way it operates is really important too, to have some sense of before you go into your first meeting. And look, I would generally say that you can feel a lot of pressure to be making comments or asking questions right from the get go. I think generally, your colleagues are very comfortable for you to take two or three meetings to really get to a point where you are starting to contribute and ask questions actively.

[00:13:31] Alison: I think listening and learning in your first couple of meetings is really a good approach. Following up afterwards, there'll be lots of things that you don't understand. And look, I think if you have the opportunity to comment or contribute on areas where you've got some particular perspectives, that's great.

[00:13:50] Alison: But don't be overly ambitious. I think in your first couple of meetings about what you need to do as far as contributing around the table. [00:14:00]