Governance Bites #63: recruiting a board secretary, with Dauniika Maclean

In this episode, Mark Banicevich asks Dauniika Maclean about recruiting a board secretary. He asks about the skills and competencies required, and necessary knowledge and experience. They discuss communication skills, interpersonal skills and technological proficiency. Dauniika outlines professional development for board secretaries, onboarding, and pitfalls to avoid when recruiting. She also shares the best advice that she would give to a new director. 
Dauniika Maclean is a professional company secretary, and a Chartered Member of the Institute of Directors, with her own business called Board Administration Services Ltd (https://boardadministrationservices.com/). She is company secretary for NZ Health Group, Unitec and Auckland Grammar School. She also has experience as a director. 
#governance, #governancebites, #director, #boardroom, #boardcraft, #boardsecretary

Transcript

0:00

Kia ora, Mark, and kia ora koutou. I'm Dauniika Maclean from Board Administration Services. We're a company that provides bespoke governance advice and board secretary services to companies that need a little bit of help with their board processes or have a gap in skills there. So, we assist from minute taking to helping with board papers, establishing board processes, implementing board software, really anything that you might need from an administrative perspective. I myself am a company secretary and I've been a board secretary in the past. I am a director as well. I've done my company director's course through the Institute of Directors, and I am a chartered member with the IoD [Institute of Directors] and an affiliate member with the Chartered Governance Institute of New Zealand. So, let's have a conversation about recruiting a board secretary. Let's do it. Hi, welcome to Governance Bites. My name is Mark Banicevich, and today I get the pleasure of spending more time with Dauniika Maclean. Dauniika, thank you very much for your time again. Thank you, Mark. Let's talk about recruiting a board secretary. Starting with the first question, what specific skills and competencies do you think are most important for a board secretary to possess? Well, certainly a good grasp of written communication. They don't need to be creative writers, but they need to, you know, have good competency in spelling and grammar, be able to articulate themselves clearly, and just have a good grasp of vocabulary, especially specific to any industries that they're working in. Right, yes, of course. There'd be a lot of jargon that would be used in the boardroom, and you wouldn't really want your company secretary saying, "What does that mean again?" Yeah, yeah, yeah. Okay, how do you assess their ability to handle confidential and sensitive information? There's so much of that that's handled around the boardroom. I would ask, in the interview process, specific questions relating to that, like how they might have handled a certain situation where privacy or confidentiality might have been compromised. I also test them, before I even got down that track, with what their understanding of confidentiality is. Do they understand the Privacy Act [2020]? Do they understand what needs to be kept confidential and what doesn't? Right, okay. So, to start with, if you're looking for one of these roles, make sure you've done the free learning on the Privacy Commission's website [privacy.org.nz]. There's some really good online courses there. Yeah, there are a lot of good resources out there. Yeah, how critical is the knowledge of corporate governance and compliance for a board secretary? What kind of understanding is required? Well, everything's teachable, so I wouldn't have a lack of understanding as a hard no when you're recruiting, but certainly, it helps if they do have understanding. You can test them on certain areas of this during the interview process, like by asking them if they can explain what a conflict of interest is. Can they explain what a major transaction is, You know, can they explain the solvency test and when it should be used. Kind of just prompt them with those kinds of starter questions, and that'll give you a clear guide as to what their level of understanding is. Again, if they don't know the answer to those things, it's something that can be taught. Right, there are a lot of detailed obligations in the boardroom, and quite often it is the company secretary that may have a really strong handle around those. We were talking earlier about the payment of dividends and having to have a solvency test, of course, and knowing that the company must be solvent after paying the dividend. But I wasn't aware that there was a certificate that they have to complete. Yeah, the directors need to sign a certificate stating that they are confident that the company will be solvent post that distribution. Right. Yeah. And it's quite often the company secretary that knows that level of detail. Yes, yes, it is. But I'll just take a moment to talk about the differentiation between a company secretary and a board secretary. Yeah. Because I think the company secretary will often have a finance position or a legal position as well within the company. Yes. Or they might have a chartered company secretary qualification that they've gained. So they've got a kind of higher level of understanding, as opposed to a board secretary whose role is to run the board processes, the board meeting processes. Right. The board secretary should have some understanding of what's involved, but I wouldn't say that the board secretary was responsible for writing the resolutions for something like a major transaction or a solvency test. That should really come from - The company secretary. - legal or finance or, you know, if there isn't a company secretary in the company,- Yes. - then the finance manager, or. Right. So would larger companies have a company secretary and a board secretary? Normally, yeah. Right. And then smaller companies, as you say, may have their own, in their own executive, somebody in the legal team, the finance person, and then potentially a board secretary, as you say, that runs the processes and the administration? Yeah, yeah. Right. Yeah, the larger companies are generally where you'll find

a company secretary: 5:08

 listed companies, large companies. Yes. The smaller privately-owned companies, NGOs[non-government organisations], not-for-profits, charities, they're more likely to have a board secretary. Yes. They can be quite a big company, but they might be privately owned, and they don't have that company secretary function, but the board secretary is a really vital role. Right, that's a really useful distinction to make. Thank you. So, in recruiting a board secretary, what previous experience would you expect, and how much industry experience is relevant? So, previous experience, I definitely want to see that they've held some kind of administration, high-level, C-suite administrative position previously. Either they've already been a board secretary, or they've been an EA [Executive Assistant] to a CEO [Chief Executive Officer] or a senior executive and have had that contact with the board and board reporting processes. If you don't have someone that's been in an administrative position, you can sometimes find people with law degrees. They've got a really good understanding of corporate governance, and they've got a good understanding of minute taking, and they can be trained into the position. I think anyone with transferable skills that have a high level of written and verbal communication and are easygoing but resilient could be trained into that position. Right. We talked before about the level of jargon that you have in any industry. So how valuable is industry or sector experience? So, I think sector experience can be really valuable because it's kind of like you'll know that they'll already be a pretty good cultural match because they've worked in that industry, they understand it. In terms of the language and the jargon, though, that again can be taught. Taught, yes. It's not critical, so they don't have to have come from within that industry. So, nice to have, but not necessarily a requirement. Yeah. It's more important to some of the other aptitudes that you were talking about earlier. Yeah. Yeah. You talked also earlier very much about written communication skills, about having good grammar skills, good spelling obviously, and a good ability to communicate in a written way. What about verbal communication? I think verbal communication is really important, mostly in interpretation of what's being said. So, they need to be able to understand very clearly what's being said around the board table to be able to minute it appropriately. Yes. So that, you know, English or whatever language the board meetings are being held in, here in New Zealand it would be English, - Yes. - needs to be perfect. You can't really have someone that struggles with understanding. No. Yeah, absolutely. How important are interpersonal skills in managing the relationships? Because they'll be dealing with both board members, senior executives, potentially other stakeholders as well. Yeah, you need to have a certain level of confidence. You don't have to be... It's a tricky one when you talk about interpersonal skills because you get down to personality types. But I think an ideal board secretary would be really easygoing, would be confident, would have no trouble talking to senior people, you know, - Yes. - really, you know, very important directors, people within the company. They need to have the confidence to be able to follow up executives to get their board papers on time, which, you know, you can't be too rough in asking that. You catch more flies with honey than with vinegar. Yes. Yeah, so someone that can kind of manage those relationships and has the, yeah, I guess that's where your interpersonal skills come in. In your experience, having done this for, what, 15 years or something now, - Yeah. - how important is resilience in dealing with some of these executives and seniors? Resilience is very important. I've been told by recruiters that you need to be careful putting that into job ads because you can actually scare people off if you say you're looking for resilience. But I think in the boardroom, there can be, you know, quite robust conversations that go on. You're working under competing deadlines, and you know, people can get a little bit stressed at the last minute, and you can kind of get that snappy behaviour coming directed at you as the board secretary. You need to know not to take that personally. You need to know how to do your job and concentrate on getting done what needs to be done and not be worrying about what someone said. Yeah, exactly. Right. Coming back to the point, the distinction you made earlier between a company secretary and a board secretary, if an entity does have a company secretary, they're very much involved in the composition of the papers as well as making sure that the papers exist. How much, particularly if there's not a company secretary, does the board secretary get involved in,"Oh, the wording of this paper isn't really going to fit with this board, they need a little bit more visual information", for example? Yeah, a good board secretary will be able to do that. So, at the very basic level, a board secretary should be receiving the papers and reviewing them for spelling and grammar and consistent formatting. Yes. As you get more confident in doing that review, you can start to put in practice good practices around what board papers should look like. There are lots of resources out there around how to write a good board paper. They should then start going back to the executive and saying, "Look, I think this is too long," or, "Do you think that you could put this data into a graph?" Feeding back to the executives what the directors have said at the board table. Yes. You know boards are not shy about saying,"We want to see more data. We want more graphs." So actually feeding that back to the execs [executives] who aren't in the room at the time - Right. - is quite a vital role of the board secretary. Yeah, absolutely. Okay. What level of technical proficiency is needed? You know, you're not just talking about, I guess, Microsoft 365 or general office software. What other software and services involved, and what level of technical proficiency is needed? Well, yeah, you touched on Microsoft. You have to absolutely be competent in the Microsoft Office suite. You should have experience with board software, and if you don't, you need to be technically savvy enough to pick it up quickly. Yes. Yeah. Yeah. If you're starting from a different position, and you're moving into that board secretary position, as a recruiter, you need to be really sure that they've got that level of competency and, technical competency, to be able to pick things up quickly. And generally, the board software is fairly intuitive, isn't it, these days. It is. It is quite easy to use. Yeah, it is. What about hardware? Is it your board secretary that will often be the IT [information technology] support person for making sure that projectors are set up and those sorts of things? Yeah, often it is. Some of us are lucky to have an IT person on standby, but sometimes it's not. So you need to have a really good understanding of how to turn on the projector, how to connect your laptop, make sure everyone's got Wi-Fi, connect up to Teams or Zoom. People will look to you as the board secretary in the room to be able to problem solve those things. So if you don't know, have an IT person on standby to come. One of the board members will come in with ,an Apple computer instead of a PC and you'll have trouble then, connecting it to everything. Yeah. All that kind of stuff. I think a good board secretary will have a little toolbox with a multi-board and an extension cord and an adapter for all of the different input ports on the laptops. Right. So you can connect those things. Yeah, of course. Phone chargers and stuff as well, maybe? Yeah, probably. What opportunities for professional development should be available to a board secretary? Well, I think board secretaries need to be quite self-directive in their learning because there's not a huge amount of training opportunities that are provided out there. Certainly looking to The Institute of Directors, and the Chartered Governance Institute of New Zealand is helpful. They've got good resources, as do places like board software like BoardPro, have a great library of resources around good practices. Make yourself familiar with the NZX [New Zealand Stock Exchange] Corporate Governance Guide. If you have the ability to sign up to a membership with IoD, they have lots of resources for members that are constantly updated within there, which is really good. LinkedIn Learning does some great courses on minute-taking and active listening. Things like that. Those are the things that I would encourage someone to develop, as well as the, if you don't have that technical proficiency, then start there. So, like anybody else in a profession, you have your professional development plan, identify what sorts of skills are ideal, where your gaps are, and then look for the knowledge to fill those gaps? Yeah, yeah. Our company does minute training and we've done workshops for EAs [Executive Assistants] that are looking to enhance their minute-taking ability, so there's a bit of that out there as well. Great, great. It's certainly a very difficult skill set. The ability to take good minutes. It is, it is. It unusually is. People underestimate it. Yeah, not when you've read bad minutes and good minutes. You certainly don't underestimate it anymore. What are some of the common mistakes to avoid when recruiting a board secretary? Don't underestimate the value that a board secretary brings to the company. They need to be quite highly regarded in the company. They should sit above an EA or a PA [Personal Assistant], and they should be remunerated accordingly. When you pay well, you get good talent, and in paying that higher rate, you can give them some responsibility. Make them responsible for finding efficiencies and improving processes in the board reporting process. You can task them with keeping directors up to date with regulatory changes, just giving them those responsibilities to validate that remuneration. Right, so remunerate well. Remunerate well. Any other common mistakes to avoid? Just that resilience piece, that confidence piece. I think, really test that, - Yeah. - make sure that they are able to adapt to the environment of a boardroom if they haven't really been there. What steps should a board take to ensure a smooth onboarding process? The board secretary should be given access to all of the company records, previous meeting minutes, and meeting papers. They should be given a license to any board software that they're running. They should have the contact details for every board member and all of the key executives. They need to be given booking rights for booking rooms, and if they need to organise catering and travelling, then they should be given all of that information. You've said to me in an earlier discussion that you create kind of a cheat sheet. Yeah. Is that something that you would expect to have when you start on a board, that,"Here's the cheat sheet"? I think that's very helpful for board secretaries if they're coming on board and they don't have a handover from someone who is currently doing the position. Then just writing down all of those points. So, all of the details around who the travel agent is, who the caterer is, how to book a meeting room, who to go to for which papers in the board pack, where the company records are kept. All that key information. Would a handover be common when a board secretary is recruited? Would you expect to have a couple of weeks with the existing board secretary, - Yeah. - or is it less common? It really depends on the incumbent board secretary. If they've got time. If they've given a long enough notice period and they've recruited someone quickly enough. Yes. So, ideally yes. But it's not always in practice what happens. I think having someone else within the company, like the CEO's EA, to be able to handhold a little bit and do some of that buddying is helpful if the board secretary is not there. Yes. Or if they've got a head of governance or legal who's involved in that board process, then. Or a company secretary. Or a company secretary. And it seems from what you've said that one of the first things that, or one of the very important things that a board secretary should do is to create that cheat sheet if it doesn't already exist, or make sure it's kept up to date. Yeah. For all those things, as you said, like flights, catering, accommodation, - Yeah. - meeting rooms, IT [information technology], arranging reports, all that sort of stuff. Yeah, I think it just becomes your bible. If that's not already there, setting it up is going to help you, or the board secretary in their role, as much as it is when the next board secretary comes on. Yes, absolutely. Yeah. Well, one final question for you then. What advice would you give to a new director? I think just going back to that, don't underestimate the value of the board secretary. Yeah. Yeah, right. Yes, get a good relationship with the board secretary, because you'll need it. They are there to make your life easier as a director. Right. Yeah. Okay, well Dauniika, thank you very much again for your time. Pleasure. I look forward to seeing you again soon. Thank you, and see you next episode.