Governance Bites #77: CEO working with the board, with Rhiannon McKinnon

In this video, Mark Banicevich asks Rhiannon McKinnon about the role of the chief executive, working with the board of directors. He asks about reporting to the board, the challenge of shifting from management to board meetings, and how to discover and alleviate directors' biggest concerns. They also discuss other issues, such as the benefits for the CEO of working with a board, working with each director, and the challenge of dysfunctional boards. He also asks what advice Rhiannon would give to a new CEO. 
Rhiannon McKinnon helps new and aspiring CEOs step up and thrive. She has founder and instructor of CEO 101 (https://www.ceo101.nz) which provides online courses and coaching for senior leaders which complements her consultancy business, Cassiobury (https://www.cassiobury.co.nz/), which provides strategic advice and counsel. Prior to this, she was CEO of Kiwi Wealth, the KiwiSaver provider and fund manager associated with Kiwibank. Rhiannon held this role at the end of a decade with Kiwi Wealth, Gareth Morgan Investments, Kiwibank and New Zealand Post. Rhiannon has a background in corporate finance, and mergers and acquisitions. 
A big thank you to Alexander PR (https://alexanderpr.co.nz/) for hosting us in their lovely office!
#governance , #leadership , #corporategovernance , #boardcraft , #decisionmaking , #makingadifference , #ceo, #governancebites , #boardroom

Transcript

0:00

Hi, my name is Rhiannon McKinnon. I am the CEO and founder of Cassiobury and also CEO 101, which provides coaching and online courses to aspiring and new CEOs. Thank you, Rhiannon. So, let's have a conversation about a CEO working with the board. Okay, brilliant. Looking forward to it. Hi, welcome to Governance Bites. My name is Mark Banicevich, and as you just heard, today I'm lucky to spend some time with Rhiannon McKinnon. Rhiannon, thank you so much for your time. I really appreciate it. It's a real pleasure. I know you've got an insanely busy day, so I really appreciate you fitting me in. The first question I have for you is, as you've had the experience moving from an executive to a CEO, how does reporting to a board differ from reporting to a CEO? I think the big change is that you go from having sort of one boss to multiple bosses all at the same time. So, even if you have a very strong relationship with your chair, ultimately the board are all equally responsible for the outcomes of the organisation, so you're actually dealing with multiple bosses and trying to kind of please multiple task masters all at the same time. So, getting your head around that shift is quite important. And also, they're quite remote; you know, you don't have a daily manager who's sort of watching you and making sure you're on task. You sort of meet them maybe once a month or less often than that, so that's a big shift in delegation and, you know, sort of getting on with your day-to-day job without interference from your boss. Right. One of the other challenges, I think, would be, as a CEO, as you say, you're involved in or running the day-to-day operations of the business, and then very often stepping into a board meeting, which is quite a different level. What do you find is the biggest challenge of that shift, and how do you deal with that? Yeah, I think it's a really big gear shift on the day, and I certainly found that when I was early in my stage as a CEO. You'd go from like running the business and leading it, and trying to sort of show everybody you knew exactly what you were about and, you know, leading with vision and conviction and confidence, and then you'd get into the boardroom, and suddenly you'd be the young grasshopper again and everyone's asking you all the questions, and you feel quite junior. So, I found that quite hard on the day, and I think as I got better at it, you start to see, you know, the board less as task masters and bosses and actually, hopefully, potential allies. So, you know, if you begin to build their trust and they get to know you, then you've got actually a whole bunch of supporters who really want the business or the organisation and yourself to do well. So, going into the meeting with that mindset, rather than 'how are these five people going to tell me off,' is a really important shift and step change, and you can get a lot of energy from the board meeting that way, rather than sort of worrying about how you're going to be told you're not doing things right. Are there any challenges of moving from the minutiae to suddenly going to strategy and risk management and those sorts of areas? I don't think there's a real challenge with that. I mean, I was chatting to someone earlier today, and actually I think as CEO, you're switching, you know, almost every hour between meetings, between like detailed technical things or sort of large strategic or vision or communication; it kind of switches all the time. So, I think that switch up into board mode, I think, is probably a welcome one and quite a nice one to kind of step out of the day-to-day and start thinking more long-term, and checking on whether what you're doing on the daily is actually making sense from a long-term perspective. What do you tend to find are the directors' major concerns, and how do you, as a CEO, alleviate those concerns? Well, when I was sort of thinking about it as I was writing this course around how to deal with directors and get the most out of them, I was thinking about what are they concerned about. And I think, you know, the risks that directors take on these days are actually, you know, very important and grave in New Zealand. So, I think getting them to trust that you've got all the legals and the risks covered first, I think, is really important. And trying to look at it from their perspective in terms of, you know, when it comes to risk management, they sort of delegate away that kind of monitoring of risk. But ultimately, it still comes back to sit with them. So being really, you know, sort of sympathetic and empathetic to the fact that they're trusting you with a hell of a lot of authority for the daily, to make sure that you're giving them the information they need to feel — what's the word I'm looking for — comfortable that you've got it. And then they can move on to the next level of like, how do you really make this organisation purr and spin and sort of deliver what it really needs to. But that first level is, you know, are they safe in their role as directors and, you know, can they trust you to deliver what they really need? Have you ever had a situation where the directors, as you talk about their liability, that would have to lend itself to some form of conservatism, and as a CEO, sometimes you want to drive the company forward? Have you ever had a situation where you found the directors are being more conservative than you really need them to be to achieve what you want to achieve? That's an interesting question. I think, yeah, once you've built that trust, then you can really start to stretch the kind of vision together. I think if they feel that, operationally speaking, you're slightly out of control, then they are going to tend towards the conservative. And I think, you know, looking back at my time and my tenure as CEO, as the trust built, then you could start to take greater risks and push the boundaries more together. Right, right. You alluded to this before, but I think, I'm sure you've got more to say on this point. What are the greatest benefits that a CEO can obtain from working with, you know, the skills and experience that you have in a boardroom? Well, I think, yeah, exactly, the skills and experience. So, I think, firstly, I think that remote nature actually kind of, you know, the flip side of that is that they have fresh perspective all the time. So, they know the business well enough, hopefully, to be adding value at those board meetings, but they're not in there in that minutiae. So, it really helps you to get up and look at it from a kind of an eagle's eye view and to be looking, you know, from 30,000 ft. I think the board members can do that really well. And then they always have a range of skills and also networks that you can tap into. And so, networks, I think, sometimes they can introduce you to people who can really help you unlock particular problems, and that can be really helpful. And then with skills, I think you, you know, I only brought, you know, my own level of skills on to the board — not to the board, to the CEO role. They come from a whole breadth of skills and experience, and trying to use those without them kind of stepping into management, I think, is a real asset. We had someone on our board who was, you know, a real technologist, and so he ended up chairing the technology committee, and that was a great way to kind of use his skills while staying in a governance role. Yeah, fantastic. Boards, as you just mentioned, tend to be populated by quite diverse people. As a CEO - and different people have different communication styles and so forth. As a CEO, how do you try to get the most out of the skills of each individual director? I suppose it's like with any team; I mean, it's sort of an upwards team rather than a downwards team, but you have to get to know each of them individually. You know, when I was reading up about this, you know, the American style, you know, advice is to take them all out for dinner and get to know them. That's probably a bit much for a Kiwi, but certainly a coffee with each person to understand, you know, what their concerns are, what their skills and attitudes are, so you really understand, you know, what they can kind of be useful to you as a CEO, but also what really concerns them so you can be useful to them. Yes. It’s a two-way street. Yeah. So, spending time with each of them and, yeah, understanding that it's not just the chair you're looking after; you're really looking after a whole bunch of people there. How frequently would you have those one-on-one conversations with each of the directors? You know what, it was variable for me because what you do as a human is you speak to some of them individually quite often because you get along with them, and some of them you probably keep more at arm's length than you ought to. But I think if you're stepping up into that role, you should try and talk to each of those board members in those first few months and maybe on an annual basis, at the very least, for those board members outside of the chair. Right, yeah, that’s, I think, a really good takeaway. I don’t know whether you've ever found yourself in this situation — hopefully, you haven’t — but I know you've had conversations with people about this. What should a CEO do if they ever find themselves in front of a dysfunctional board? There's lots of people who find themselves in front of dysfunctional boards — not me! I think, you know, in the first instance, if you're lucky enough, if the chair is not part of that dysfunction, then you should sort of voice your concerns to the chair and say, "I'm a little bit concerned about, you know,"this director or the way that these guys are sort of chatting off to the side," or whatever it might be. And hopefully, it's really up to the chair to sort that out. Yes. If it's the chair themselves, or it's the whole board is a dysfunctional board, I suppose, first of all, I'd probably try and keep my head down and deliver what you think is genuinely best for the organisation and sort of hope that that kind of fire at that upper level kind of sorts itself out. And hopefully, it does. Otherwise, there's going to be a point where it’s going to be difficult. It gets untenable after a while. Yeah, it would make the role really hard to live with, wouldn’t it. It would do. Yes. That's been great. I've got one final question for you, if I can. Yeah, sure.

And this is really in your wheelhouse: 8:45

what advice would you give to a new CEO about working with the board? I'd give them a few bits of advice. I think going with that kind of mindset, I think, is so important, to go from recognising that it might be quite scary in that boardroom to begin with, but try and, as fast as possible, build that trust with the board and then really turn them from, you know, five, ten, however many bosses, to actually allies to get the organisation sort of working together. So, maybe, yeah, look at them as an upwards team rather than your downwards team. So, yeah, that energy, that mindset, and how you work with them, I think, is super important. Like you've been assigned seven mentors and make the most of it. Yeah, that's a great way of putting it, yeah, I like it. Yeah, right, cool. Okay, Rhiannon, thank you very much for your time, I really appreciate it. I look forward to catching up again soon. Yep. And we’ll see you next episode. Thanks so much. Thank you for watching this episode of Governance Bites. We have more episodes on YouTube and your favourite podcast channel, where I interview directors and experts on various topics relating to boards of directors and governance. We'd love to see you back, and please like, subscribe, and share the videos and podcasts.