Thought Leadership

What is the key to helping Indigenous Boards succeed

Oct 23, 2019

David Spear FAICD wrote the first feasibility study for Indigenous Governance for the Australian Institute of Company Directors (AICD).  He led the development of the first ever six Indigenous governance training modules for AICD. Through this experience and contribution, David has developed a deep passion for assisting and supporting Indigenous organisations in Australia. Over the past 5 years David has continued his passion and contribution as a Non-Executive Director on multiple Indigenous Boards.

In October we interviewed David, asking him a series of questions about the work he has undertaken with several Indigenous NFP clients. David shares his expertise and insights, in the areas of strategic planning, CEO review and governance training.

Client 1 – Strategic Planning
Q) Why did the client need external consultant to facilitate a strategic planning session?
A) The existing strategic plan was expiring, therefore there was a need to develop a new strategic plan. Having an external consultant facilitate the session enabled the Board and CEO to participate, discuss and explore, giving them the head space and freedom of thought.
Q) How was the session structured and how many people participated?
A) It was a full day session with 12 participants, Board, CEO and selected management.
Q) Was there pre-work to do in preparation for the day?
A)
An electronic survey was sent to all participants to entice them to think strategically about the organisation. This enabled them to focus and create a mindset to enable quality outcomes.
Q) Why is this required and how does this add value?
A)The pre-session survey helps frame the structure of the session and enable participants to be laser-focused on the day.
Q) What were the key outcomes for the client?
A) Enabled the Board and CEO to determine their focus and priorities for the next 3 years. From a Board’s perspective it ascertained what are the collegiate challenges they face.
Q) What was challenging in the session?
A) For the Board there is a tendency to be operational and focus on the detail. The session helped the Board to get out of the detail, challenge themselves to stay at a high level to develop and drive the strategy. Management focus on operations and detail, not the Board.
Q) What was the stand out success or light bulb moment of the session?
A) 
During the session, we broke in to three groups. When we came back together as one group, there was greater alignment of the future strategy.
Q) How often should a client review their strategic plan and what are the triggers?
A) There is no set timeframe, however minimum once per annum. It depends also on challenges and disruption that may arise from time to time. The Board and Management need to be prepared to change direction if there are external triggers impacted the organisation.

Client 2 – CEO Review
Q) Who initiated the CEO Review?
A)The Board.
Q) Why does a Board require a CEO Review?
A) The Board must understand the performance of the CEO, including the engagement of stakeholders with CEO. It is also a mechanism for a culture check of the orgnaisation.
Q) Is there a framework you use to measure and assess CEO performance?
A) Yes, a framework is very important. There are three groups we seek feedback from, Board, Staff and external Stakeholders. We use a three-phase approach, online survey for quantitative and qualitative data and follow up interviews.
Q) What does the data tell you and how does inform Board decision making?
A) A CEO performance review is not just about financial results.  The data gives an insight of how the CEO is performing from a non-financial perspective, such as executive behaviours, listening, empathy, process and project management.
Q) What are the most common areas you see CEO need further development?
A) CEO’s are incredibly passionate people.  The most common theme is work/life balance.
Q) Is there a consistent trend you have observed?
A) Work/life imbalance can affect the health and mental wellbeing of a CEO. This can negatively impact the culture of the organisation and is an area of concern for the Board.
Q) You use a structured assessment criteria, what are the top three areas CEO’s show strong performance?
A) 1. Leadership Strategic Planning 2. Advice to and relationship with the Board 3. Executive behaviours.
Q) What happens with the results and how is the data used by the Board?
A)A final report is presented to the Board, outlining areas of strength, also areas for attention and development.
Q) How does a CEO Review help the individual, the Board and Management team?
A) It helps identify the potential things the Board should consider to drive CEO performance; these are key drivers for organisational performance.
Q) What are the risks not undertaking a CEO Review?
A) Without a CEO performance review, the Board is not getting a full view of the organisational performance, meaning the Board is only seeing financial performance.  Non-financial performance is critical, covering areas of relationships, behaviours, culture and stakeholders.

Client 3 – Governance Training
Q) Why did the client need governance training?
A) 
Given the number of Royal Commissions, the Board required the latest update on corporate governance.
Q) What does governance mean?
A) 
Governance is about the systems and process of an organisation, including the relationships within the organisation and the accountability of the stakeholders in control of the organisation.
Q) Why is governance important?
A) 
It is critical. Without oversight of systems and processes, the organisaton may not be as transparent to the Board.
Q) Who is responsible for governance?
A) 
Ultimately the Board is responsible and the Board need to understand that.
Q) Is there a standard set of governance principles for all organisations or is NFP different?
A) 
Indigenous governance principles are different to contemporary Australian Boards. Indigenous organization governance principles rely heavily on three main areas, these are Family, Community and Culture. All three have a significant impact on the Board decision making, which is fundamentally different to contemporary Australian Boards.
Q) What are the key attributes you need to achieve strong governance?
A) 
Strong relationship between Board and management. Both will lead to a level of trust.
Q) What are the key gaps or issues you have seen in poor governance?
A) 
Lack of accountability. Lack of transparency. Lack of trust.
Q) How often should governance practices be reviewed?
A) 
Regularly, at least one per annum. Also testing relationships, practices and professional development activities.
Q) Is there a difference between managing V’s directing?
A) 
A key area and challenge for Indigenous Boards is the lack of understanding of the difference between managing and directing.

For more information please contact David Spear on 0408 404 910 or email david.spear@vuca.com.au

David Spear FAICD
Director

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