Secrets to being a great chairperson

[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.

[00:00:11] Speaker: In today's podcast, host Richard Conway interviews Ilana Atlas, chair of Scentre Group and Jawun, on how to effectively lead a board as its chairperson.

[00:00:21] Richard: Hello and welcome to the Minutes podcast. I'm your host, Richard Conway, and in today's podcast, we're going to talk about the differences between being a director and being the chair of a board. So we're very privileged to be joined on the podcast today by one of Australia's most experienced and respected directors and chairs, Ilana Atlas.

[00:00:45] Richard: Ilana is currently the chair of Scentre Group. A director of Origin Energy, the chair of Jawun, and a member the Council of the National Gallery of Australia. Ilana, welcome to the podcast.

[00:00:57] Ilana: Thanks, Richard. Lovely to be here.

[00:00:59] Richard: So, [00:01:00] Ilana, let's jump right in. And as I mentioned earlier, you're currently the chair of Scentre Group, but that's not your first chair position. So I wanted to ask if you could tell us a little bit about your first experiences as a board chair and how you found different to your director positions up to that time.

[00:01:19] Ilana: Thank you. So, reflecting back, I think my first board chair was as chair of Bell Shakespeare Company. Which would be, I think, you know, 15 plus years ago. So being chair of anything, well, what's, what's quite interesting about it is being chair of something is quite similar. So being chair of Bell Shakespeare is actually quite similar to being chair of Scentre Group.

[00:01:42] Ilana: But being a director of each of those entities is very different from being chair. So, I mean ultimately I think the thing that you are most conscious of when you're chair is that you are accountable. Ultimately accountable for the organization. So that is quite different [00:02:00] from having a director role.

[00:02:02] Ilana: And the other element to being accountable is clearly you don't run the company. So how do you exercise that role of accountability when you actually don't have your hands on the machinery of the organization? So I think that's the ultimate challenge for a chair.

[00:02:20] Richard: Yeah, that's interesting that you said that being a chair across two organizations was quite similar. And is that really driven because of that accountability or something else?

[00:02:31] Ilana: Well, I think that the challenges are quite similar. So the relationship with the CEO Scentre Group is an extremely important role, just as the relationship was with the, John Bell, who was the artistic director and the person at the time who was the CEO of Bell Shakespeare. Issues of succession planning were just as important for Bell Shakespeare as they are for Scentre Group.

[00:02:57] Ilana: Issues around the financial security of the [00:03:00] organisation were just as important for Bell. As they are for Scentre. So the fundamental issues that you address as chair are quite similar. You know, obviously the dimensions are different and the public and investor scrutiny you have as being chair of the listed company are obviously dimensionally different. But the challenges you face are quite similar and certainly the anxiety you have when you face those challenges is quite similar.

[00:03:25] Ilana: You know, with an artistic company or with an arts company, you're often sort of facing existential crises about how you're going to fund the next year. So yes, they're quite similar challenges.

[00:03:38] Richard: And so then Ilana, what do you think are the key skills that a good chair needs to bring to bear in an organization over and above what's already been expected of them being a director up to that point?

[00:03:51] Ilana: Well, I think the influencing skills that you have are really at quite a significant level. You do have to master a lot [00:04:00] of stakeholders who may have quite different perspectives, views and interests. And so I think the influencing that you need to exercise across all those different interests together with making decisions that sort of manage different views.

[00:04:19] Ilana: I think that that does require an extra sort of level of skill and thinking and capability. I think what I mentioned earlier around accountability the buck very much starts with you and ends with you. So it is quite a lonely role, really. I mean, people often talk about the loneliness of the CEO role.

[00:04:41] Ilana: I think the chair role is quite lonely. And so it is a matter of thinking about how you can get all the information you need to make the right decisions, where you get that information from, who you speak to. They're all things that you need to [00:05:00] accomplish, I think, as a chair.

[00:05:02] Richard: Yeah, and I'd like to pick up on what you said about accountability there and ask you how you think about the chair's accountability versus the CEO's accountability, because I guess they're both considered people who are ultimately accountable for a company's performance and what it does.

[00:05:21] Ilana: Yes. We often say the most important job that a board does is recruit the CEO. And so, in doing a good job of that, hopefully you're in a position where you can trust the CEO to effectively run the business. So as chair, you are accountable, but I think for the sort of, obviously the governance decisions in the organization, who's on the board, but also for the big decisions.

[00:05:46] Ilana: So, when companies enter into large transactions or make significant decisions that affect reputation, they're the things where boards and chairs get involved and they're the things that I think you [00:06:00] really need to make sure you have correct imports and information so you can effectively make those decisions.

[00:06:06] Richard: So it's really clear from what you've said, and I think it goes without saying that the relationship between the chair and the CEO is critical. But that can be a pretty tricky relationship as well. You've got to think about remuneration, succession, and a range of topics around CEO performance, et cetera.

[00:06:26] Richard: What approaches have you used to be successful in that relationship and navigate those kinds of issues?

[00:06:34] Ilana: So you're right. I think the relationship between the chair and CEO is pivotal. When it's not good, it has a significant effect. I think it affects shareholder value in an organization. So, I think it is easy to underestimate how important it is to shareholders that that relationship is effective. So I suppose my experience has been it's always good to [00:07:00] try and set the ground rules up front.

[00:07:02] Ilana: So be very clear about expectations and those expectations, both in a behavioural sense, you know, how we are going to effectively work together, and also in a process sense. How often you meet, how easily you can contact each other, sort of things that seem pretty obvious, but unless you're explicit about them aren't clear.

[00:07:25] Ilana: And I think, you know, CEOs are extremely busy. But this is something they must make room for, so you have to help them plan for that. But ultimately, the most important thing is, I think, to set clear expectations. And one of those has to be openness and transparency. Again, you know, lib and obvious.

[00:07:48] Ilana: But actually, to be, to create a very open and transparent relationship means very high levels of trust. And ultimately that is a product of communication. [00:08:00] And again, I don't think you can over index communication. You just really need to keep talking to each other because that's the only way you're going to get to know each other.

[00:08:12] Ilana: And that is fundamental because ultimately, you know, as a relationship, the CEO and chair probably wouldn't in the ordinary course choose to know each other particularly well. But to be effective, that's what needs to happen here. The other element I found quite helpful, is to have a trusted third party involved as well in the relationship.

[00:08:35] Ilana: So someone who speaks to each of you and gets together with the two of you and just provide some objective feedback on how you're going and what you might want to do differently. I found that very effective in improving the relationship. And the other is not to take it for granted. Sometimes you can be spending a lot of time with each other, but actually the quality of the interaction [00:09:00] isn't what it should be.

[00:09:00] Ilana: So it does require quite a lot of thinking, consideration, analysis to make it effective. To make it effective does take quite a lot of time, I think, for the chair to make it work.

[00:09:15] Richard: Yep. So Ilana, I also wanted to ask you about any kind of core principles or that you use to navigate complex decisions, stakeholders and environments as chair. So all directors, as we know, are required to act in a shareholder's best interest, but are there any key behaviours or principles that you try to apply as chair over and above what you would do as a director already?

[00:09:40] Ilana: So acting in the best interests of shareholders again is easy to say, but actually quite hard to do. So I think it is important to emphasize that North Star. And another aspect of that, which is extremely important, is that everybody else knows [00:10:00] that is your North Star. And that's how you engender respect in an organization.

[00:10:05] Ilana: When people know that this is not about who you like or you don't like or what your interests are or what they're not, they are simply that you will always act in the best interests of the company, the organization. And I think you engender respect if you're seen to actually behave in that way and be consistent about it.

[00:10:28] Ilana: So again, it's a matter of getting credibility in that. So that people know that in every difficult situation, that will be your North Star. So I would say that is very, very important and can be quite challenging at times.

[00:10:45] Ilana: The other is to be very clear about the values of your organization and for the board to really live those values as well. Often find that's actually not something boards do. [00:11:00] Consider what are the values of this organization and how do we as a board role model them in the organization? Again, I think that's quite a good exercise to undertake.

[00:11:11] Ilana: And then, because obviously they're different in different places, and it can engender quite an interesting discussion when boards think about how they can be seen to be living the values of the organisation. So, I think that's how I'd answer that question.

[00:11:27] Richard: Yeah, great. And then, final question, Ilana, if you were a director or you were talking to a director who's early in their board career and is interested in becoming a chair eventually, what would your key pieces of advice for them be?

[00:11:43] Ilana: I think it's to watch and learn. So, you know, there's no rule book for this. No playbook. There are some principles we've already talked about, which I think are important. But it is good to learn on the job because you'll see [00:12:00] what to do and what not to do. And that's certainly how I've learnt.

[00:12:03] Ilana: I've been very fortunate to work with some really outstanding chairs and that's really how I've learnt.

[00:12:12] Richard: Absolutely. I just one follow up on that is I was interested in whether you feel that being a chair of a committee is a good stepping stone to becoming a chair of the board, or whether you think there's still a big gap between those roles?

[00:12:29] Ilana: No, I think, I think it is, I think it is. Particularly, in a company, I think if the chair is very clear that the chairs of the committees have accountability for those areas, I think it does give you an opportunity to sort of guide the organization, meet investors, and really play a significant role.

[00:12:52] Ilana: I think we jointly saw a board take a very proactive role with safety in an organization. And [00:13:00] that's just one example, I think, of where boards can play a very important influence. So yes, I think being a chair of committee is a very positive thing.