Governance Bites #57: online or in-person board meetings, with Fiona Whyte

In this video, Mark Banicevich asks Fiona Whyte about the difference between online and in-person board meetings. They discuss the advantages and disadvantages of each format, whether the decision-making process differs, which format is more efficient, and which is more effective. They discuss tools that enable online meetings, and how an effective board balances these advantages and disadvantages. Finally, Mark asks Fiona what advice she would give to a new director. 
Fiona Whyte is a director of Woori Bank, a commercial bank in Cambodia. She has been a director for over a decade, including terms for World Vision New Zealand, and Vision Fund Cambodia. Fiona is Principal Adviser, External Relations at the Financial Markets Authority. She joined the FMA after 20 years in banking, particularly in foreign exchange. 
#governance , #governancebites, #boardroom, #director, #meetingformat, #onlinemeetings, #boardcraft

Transcript

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Kia ora [hello]. Ko Fiona Whyte toku ingoa [my name is Fiona Whyte]. Thanks for joining us this afternoon. I am on a board of a commercial bank in Cambodia, and I have a day job here in New Zealand at the Financial Markets Authority. This afternoon, we're going to talk about board meetings: online, in-person, which one is better? Are they, is there one better over the other? Or how does it work in this Hi. Welcome to Governance Bites. I'm Mark Banicevich, and again it's my pleasure to spend time with Fiona Whyte. Thank you very much, Fiona. Thank you. You're now a very experienced director, having stumbled, through invitation, onto a board in Cambodia. You were on World Vision New Zealand's board, and you're now on the board of a commercial bank in Cambodia, which is, that's a fairly serious governance role. And in that first board you were drawn onto, you, I remember you telling me, really experienced directors, great processes, so it was just a tremendous training ground. I really appreciate your time and your expertise. Thank you very much. Thanks for inviting me. It's great to be here. Cool. We are, as you mentioned, talking about online and offline board  meetings. What are the advantages of online board meetings, compared to in-person? Okay, well, first of all, the obvious thing with online, is you don't have to travel. You can do it from the comfort of your own office, your own home, wherever you are. And that can have some advantages in terms of time and scheduling in when it suits. Like, for example, I've got online board meetings coming up next week, and the week after. So, you can just, not having to travel, okay, many directors around the country will be on boards that they might not be in the same city for. Yes. So even, you know, my case it's international. But in other cases, many people are based in different organisations, and living in different cities. So, it can save money and time, in terms of not having to travel for every board meeting. Right. So, even if you're, as you say, Auckland to Wellington, 45-minute flight, you're essentially losing a day getting to the airport, - Yeah. - waiting to get on a plane, flying up, having your board meeting - two to four hours - getting back on the plane, going home. Haha, 2-4 hours! Is that a short board meeting for you? Can be, yeah. Yeah. So, it could be longer. And for you, as you say, traveling to Cambodia, it's a much bigger exercise. Yeah, yeah, it's a biggie. Whereas an online board meeting, get it in the calendar, however many hours, that's it. Yeah. And you can know it from wherever you are. So, what then, are the disadvantages of online meetings. Well, during Covid times, of course, we had no option, right. And so they were all online. And that, for the first couple, it was kind of okay. But given the length of time that that went on, it just it did get hard, quite frankly. I think the differences are that the chair really has to work hard at drawing each of the board members’ engagement out to some degree. Because you're not sitting in a room. We know that up to 70% of communication is non-verbal. So, just sitting in a room reading body language, looking around the room, being able to cast eyes, and just see, is everybody done? Is there someone thinking about a question? All of those nuances are just not there when you're online. So, you really have to be, as a chair, really intentional about asking every single board member if they've got any questions, or any comments, because otherwise, there's just sometimes those pregnant pauses. And it's just like, “Okay, are we moving? Are we stopping?” There's no ability to read that. Yeah. It's strange, isn't it. Even in a video meeting, you can still see the person's face, but when you've got half a dozen little screens on your screen, it's very hard to see when someone wants to speak. Whereas in person, it's actually quite natural, isn't it. It is, yeah. I find that quite strange, that it's hard to do in this little two-dimensional face format. But it's so much natural, so much easier, when you're sitting beside each other. There doesn't really feel like... The difference is becoming smaller and smaller, compared to the old voice board meetings, which were really hard to manage. Well, just to clarify that point, our meetings are voice-based, because of the technology bandwidth, right. Right. And so we do. And just because we'll have the papers on the screen. And you're bringing up presentations, and things like that. So, we don't have the visuals of the face. We just have it audio. That makes it very, very difficult. Yeah. It can be challenging. Yeah. I've found in board meetings, and as you say, when I just said two to four hours, and you laughed, because quite often they're longer than that, right. Yeah. I've had board meetings six to eight hours online. Yeah. And in my case, the board that I was on was based in Europe. And so it was early in, - Middle of the night. - middle of the night, late morning. I, fortunately, they were quite compassionate towards me. Yes. That it was either early morning, and would go through to midday, or it was early evening, and would go through to about midnight. There was a person on the board from Canada who was actually getting up at,

board meeting would start at 1: 5:00

00 a.m. or midnight, and go through late a.m. Very, very hard. Oh. Yes. And then that length of time looking at a screen, as well. It's far more tiring than being in a room where you can get up and stretch your legs, and it's. Yeah. Very, very difficult. So, we've talked about the level of engagement, and the differences, difficulties in communication. And voice versus video is miles apart, but video versus in-person is still miles apart. Strangely so. And I'm sure we've all experienced that these days, with business meetings online. It's still quite hard to read the body language, and to determine when people want to speak and when they don't. And you've talked about how it's really important for the chair to ensure that they get, draw the engagement out of each person. Yes. Does the decision making process differ? Does it differ? I don't believe it really does, right. Because your papers are going to say whether something's for information, for noting. Whether a decision's coming. You'll have the presentation, we might have a brief discussion, you'll vote on it. So, the process is still kind of the same. And the voting process that you're used to. I've been on boards where a chair will say,  “Anybody against? Anybody abstain?"Okay, it's all, that's all in favour.” Or, are you taking individual votes? Individual. And I guess with voice you have to. Yeah. So, in that way, the process may differ a little bit. Because in a room, around the table, you can… Still the same process. You do the same process? Yeah, we do. Ah, okay. We just, we make sure we just check in. Because we've got three different languages going on, as well. That's a major. So we, yeah, we do make sure that everybody's on the same page. Yeah. The international board that I was on, I was one of the few people that only spoke one language. Yeah, I hear you. Everyone on the board spoke pretty fluent English. So, we were in a position where you can do unanimous-type decisions, and everyone was confident enough to speak up. So, yeah, interesting. If you are on the phone, then it's probably more important to gauge each person individually. But interesting that you've had a process where you deliberately do that, even in person. Yeah, we do. Right. Does the format differ? Is it, do you find, for example,- Yeah, yeah. - that online meetings take longer, or? Kind of the converse. To your point where, you just said, like being on an online call for 6 hours, 8 hours. It's hard going. And so, sometimes our audit and our risk, because they're on the same day. It can be six hours, right. Yeah. They can be two to three hours each. And you do need a bit of a break in between them. What we tend to do, is we forward plan the agenda through the year. And so, when we're in person, so for me, in February and August, those agendas are much heavier. And February is the heaviest of the year, because of the end of the financial year statements. Our year ends December. December. So, our February year is, the agenda is the biggest one. August, and so our May and November meetings might be slightly lighter in terms of the actual content, because it's easier to dig into topics, and strategy, and things like that, when you're actually there face-to-face. Right. So, I would expect that if you were doing the same agenda online versus in-person, it would probably take longer online. Well, I don't know if it's that it would take longer. I think you're just not going to get the engagement that you, well, - Yeah. The discussion. - it's harder to get the dynamics, right. One of the important factors of a board, is managing not only, we talked about skills, and we talked about tenure previously, in the other session. But it's also that group dynamic, right. Yes. Of, it's not group think, but it's just that everybody contributing, and being engaged, and part of the team. And so, online, that you just have that disconnection. It's harder to manage that. Yeah. Yeah. I mean, you have the relationships. You still know the people. Yeah, of course. Yeah. Yeah. And as you said, the way that you manage those, the length of online meetings versus the length of in-person meetings, is by reducing the agenda in online meetings, to make it more manageable. So that you can cover it off in a period of time where people can still be engaged, and remain focused. Yeah, yeah. The board meetings that I've had internationally, we would have a series of board meetings over 3 or 4 days, if we were in-person travelling across the world. Yeah, exactly. Whereas your online meetings, you do regularly. Small agenda. Yeah. And focused. Right. Okay. That tends to work. Which method do you think, then, of the two, online versus in-person, which is more efficient, and why? Efficient. Yeah, I'm thinking about that, because I actually feel like hybrid works well for us. Yeah. I don't know how many other boards are using a hybrid of online and in-person, or whether they just have that expectation. Everybody's in-person, all the time. Like, for me, I feel like because we talked about the way we structure the agenda, the online meetings are still efficient. And I guess it's the effectiveness-efficiency kind of argument, as well. It is, isn't it. And it's about having that engagement, that discussion. Dealing with the tough stuff. Because, like we just talked about in the break, governance is not for the faint-hearted. Yeah. There can be some real, you know, we talked about group dynamics, and respect. But you kind of have to wade in sometimes. And so, that efficiency piece. It's a difficult question to answer, if you know what I mean. Because governance is, you want to make sure that the processes are right. You want to make sure everybody has a chance to have their voice heard, to have that diversity of thought, to consider all these factors. So, I don't know, efficiency. In terms of, as you say, you're balancing a number of things here. You're balancing the cost of flying somebody from New Zealand to Cambodia, accommodation, the time that you're taking. If you're getting remunerated. Although, I know in that case it's, you do it for love, more than for money. Yeah. But the time, compensating somebody for their time, versus compensating them for a few hours on screen. There's an efficiency there. But to some extent, the conversation is harder to manage, and less effective, than in-person. Can be, yeah. So, it's balancing that. And, as you say, a hybrid of doing alternate meetings. If you're doing quarterly meetings, do it in-person, then online, then in-person, then online. Yeah, yeah. Or some sort of mix, is definitely the best way to go forward. Yeah, I think it works really well for us. Yeah. A technical question: what tools do you use for online meetings? What things do you use to facilitate stuff online? Oh, wow. Well, we use [Microsoft] Teams. Right. Yeah. And we just, we use, we were talking, we use it as audio, rather than video. Just for the bandwidth. So, the video, showing the screen? Yeah. And you share reports or presentations? Yeah, exactly. We put the papers up there, and the secretariat will work through it, and things like that. So, yeah, our tools are pretty simple. I know there are some fantastic board evaluation tools that are online, and some other board package, board material tools. But ours are pretty simple. You're emailing PDFs back and forward, is that? Yeah. A little bit, yeah. Yeah, right. I know that we've got board software, like Diligent and BoardPro, and those sorts of things, that can keep everything nice and secure. PDFs are still, it's still better than the old days of carrying paper, right. Yeah. The last thing we do in the board meeting is sign a pile of resolutions. Oh, man! Is that required for the commercial bank? Yeah. And like, the other day I had to - In Cambodia, not New Zealand. - Yeah, yeah. the Central Bank up there. The other day, there was a document that required a thumb print. So, I have an ink pad, because you have to have a blue thumb print on documents from time to time. Wow. Yeah. That's a really interesting point. That quite often, having similar conversations, just in the commercial world in financial advice, which is where I do a lot of my day job, advisors still thinking that clients have to sign pieces of paper. And you think, well, there's actually not a lot of contracts these days where you have to physically sign. Buying property, I think you still have to sign on paper. But in other countries. Yeah. Absolutely. Physical signatures on resolutions. We've already given approval for digital signature. But they do want the original signatures. Right. So, in your online meetings, you're making decisions digitally, with digital signatures, but they want the follow-up on paper. Yeah. All the resolutions have to be signed manually. Are you then doing that when you go to Cambodia? Yeah. Okay, so when you go, and you're, it's a validation of your earlier decisions, through. Yeah. I mean, it's just a bit of detailed process. It's interesting. Occasionally there's documents flying backwards and forwards, and I have to sign them, and send them back to Korea. Under urgency. Yeah. That's really interesting. For international governance, is different countries with different attitudes towards digital signatures. Yeah. That is fascinating. In your experience, then, and to some extent I think we've already answered this question, how does a board balance the advantages and disadvantages of online versus in-person meetings? I think, if there's an even balance, and again it's how many people on the board? How frequently do you meet? What's the size of the organisation? What's going to work well for your governance processes? For us, it works really well as a hybrid, where we have half online, and half in-person. We don't often have to have extraordinary meetings, but if we did, that would be online. We do catch-up calls with Cambodia most Fridays, that kind of thing. Just informal, rather than. Yeah. And who are those calls with? Well, as an independent director, I have the head of internal audit reporting to me. The head of compliance. So, people within the bank. Yeah. I deal with the whistleblowing reports that come in. Okay. Yeah. I think that's, there was about three or four things, but I managed to delegate some. But yeah. The reason I ask that question is, when we talked earlier about preparation, - Yes. - I think in our earlier conversation, you talked about having conversations with the chair. Do you also have lateral conversations with other board members? Do you find that, because of the online meetings, you have a bit more informal discussion with other board members? Not so much. Is it just with the chair? Yeah, not so much at the moment, yeah. And is that largely the culture of that particular board that you're on there. Yeah. It's bilateral conversations between chair and board member, rather than across. Yeah. Our chair has a very, well, he has a huge role in Seoul, in South Korea. In a global division role, as well. So, capacity is pretty tight. Right. But yeah, I think it's the operational side of governance, right. When a lot of the work's done in the committees. Yes. And it's preparing the papers, overseeing the papers. And then part of that, when you talked before about doing it for the love of it, it's the development of the people, as well. Yes. You could receive the papers, and go, “Oh yeah, they look okay.” And, “Fine, send them on.” But sometimes, well, very often, reviewing them. And even, we're preparing papers right now. And we're speaking with audit team. And said, “Hey look, there's an opportunity here for us to dig into some of these issues, these findings,"these common things that might be coming out. Here's a different way. What can we do here?” And they were like,“Oh. Maybe we'll look at that for the next paper.” Well, next week they came back to me with like,“Hey, how about we try this.” And I'm like, “Yeah, that's awesome. Let's try that.” Right. So, it's just that constant, trying to invest in your people, and help upskill them, as well. Yeah, yeah. So, and this is not as your role as a board member. It's the role on the subcommittees, the board committees. Yeah, yeah. You've almost got a mentoring role for the people internally within the business. Yes, yes. Yeah. I am quite invested in that mentoring capacity, and things like that. Yeah. Because some of our people have been with us for 10 years, as well. And growing through that organisation. And others, less so, for sure. And it's a really young country. And a really, quite a young workforce, to a degree, as well. Yeah. So, it's just, it's awesome to be part of that. Oh, fantastic. Yeah. Well, one final question for you then. Because I know we can't speak, I'd love to speak all afternoon, but I know we don't have, you don't have time to do that. What advice would you give a new director? Just say,“Yes.” Do it. Just get on board. Learn as you go. Draw into the knowledge that you have around you in the boardroom. Do the preparation. Yes. There's a lot of mahi [work] involved. Yes. There's a lot of prep involved. If you're taking it, taking the responsibility seriously, then it's not a light undertaking. But I just wholeheartedly encourage anyone to get involved, and learn, and do it. Your experience, I think, has to some point framed that advice, I wonder. Because your first experience was, "Yes." And you were on an amazing board, with a tremendous experience. How much due diligence would you do before you said, "Yes"? In the future? Probably, yeah, I'd be looking a bit more at minutes. Trying to get a sense of the other matrix of the, their skill set, - Yeah. - and the people on the board. Their tenure. Having the chance to read through some of the minutes, and get a sense of what's going on. What some of the issues are. Trying to be, maybe an observer, going on for a previous meeting beforehand. And then, yeah, doing some due diligence. Yeah. You've just had such an incredible experience. That first phone call. Yes. That first board that you had. Yeah. I remember talking about this when we were both working at the FMA [Financial Markets Authority], about the calibre of the directors you were working with. And the processes in place. Yeah, it's phenomenal. And I think, if I got that phone call, saying would you like to come on this board, I'd be wanting to find out who the other directors were. What their skill set was. Because it is possible to say yes, and end up on a board where no one knows what they're doing. Oh, exactly. I mean, this was a leap of faith, as you said. Yeah. There were, I had had that volunteer opportunity for a couple of exercises. I had a sense of some of the people that were involved. Yes. While I didn't know all of them that well, or anything, there was a big leap of faith. But it paid off really well. Yeah. Yeah. And, as you say, you knew some of them going in. Yeah. It was amazing. So, Fiona, thank you very much. You're welcome. You've had this decade of incredible experience. And not just governance in New Zealand. Yeah. Cambodia is quite a different area. And quite different to my experience. A lot, as being European-based, in a sports organisation. It's a completely different world. It is. So, really appreciate you sharing your time and experience. Thank you. Thank you so much. Thank you. It's been amazing to share some insights with you. And, yeah. Hopefully we'll continue the conversation. Absolutely. See you next episode. Okay, ka kite [see you again].