Governance Bites #104: maximising your chance of a good board, with Martin Snedden

In this episode, Mark Banicevich talks with Martin Snedden about maximising your chance of a good board. Martin recently studied the board selection process of 9 top Australasian sports, and shares his findings. They discuss the optimum size of a board, elected and appointed board members, and a process for attaining the right mix of skills. Martin outlines the appointments panel, and a sports organisation's skills matrix. They discuss atracting talent, limiting board tenure, board rotation, appointing the chair, and co-opted board members. Martin also shares the best advice he has received during his career.
NZ Rugby Pilkington report: https://www.nzrugby.co.nz/governance-review
Martin Snedden CNZM is a well-known and highly experienced Chief Executive Officer and director, mostly in the sports industry. He is currently chair of Cycling New Zealand and two other not-for-profit boards, is a past Chair of NZ Cricket, and past director of the International Cricket Council and World Masters Games 2017. Martin was CEO of Rugby World Cup 2011, and is a former CEO of NZ Cricket. He was a member of the NZ cricket team, the Black Caps, 1980-1990, playing 25 tests and 93 one day internationals. Martin was made a Compainion of the New Zealand Order of Merit in 2012 for services to sport administration. 
#governance, #leadership, #corporategovernance, #boardcraft, #decisionmaking, #makingadifference, #governancebites, #boardroom , #cgi, #charteredgovernanceinstitute, #director, #notforprofit, #cpd, #professionaldevelopment, #incorporatedsociety

Transcript

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Hi there, I'm Martin Snedden. I'm the chair of the Cycling New Zealand board. I'm also involved in facilitated learning, leading a project that helps out national sporting organisation [NSO] board chairs and regional sports trust [RST] chairs as well. So that's a, I've just got a huge investment in sport governance and trying to help that go as well as it can. Today, we're going to talk about a sort of process and a structure of how you go about giving yourself the best chance of ending up with a good board. Difficult topic, but there are solutions available. Hi, welcome to Governance Bites. My name is Mark Banicevich, and as you just heard, I have the absolute pleasure again to spend more time with Martin Snedden. Martin, thank you very much for your time. Thank you, Mark. You have such incredible experience, particularly in sports governance. You say, as you say, you're chair of Cycling New Zealand now, but you've been chair of Cricket New Zealand. You've been CEO [Chief Executive Officer] of the Rugby World Cup 2011 and a whole lot of other stuff. In fact, ONZM or CNZM for your service to sports admin? CNZM [Companion of the New Zealand Order of Merit]. Yeah, yeah, that was after the Rugby World Cup in 2011. Right. Which of course was a real highlight, and I think New Zealand loved it. But yeah, I have been around for a while. I was a player in cricket,[Black Caps] and I finished in 1990. That's right. And within a couple of months of finishing as a player, I found myself on the board of New Zealand Cricket. Right. And that was under old-style governance, you know, a board that basically was full of direct representatives from the cricket regions around New Zealand. Good people, but the board. Board structure. Oh, just really difficult to get that board operating as it should, and ultimately it found itself in crisis. And in 1995, the board had the sense to bring in an outsider, John Hood. John went on to be Vice-Chancellor. At the University of Auckland, yes. And then Oxford. That's right. Really clever guy. And so he ran an investigation into why we were in crisis and ultimately built a report that just focused on governance and said, "Your governance"is hopeless. Get your governance in order, and if you get it"in order, you will significantly increase the chances of the"sport doing well." And so luckily, everyone in cricket had the sense to say, "Yes, okay, we accept the recommendations." And so there was a major overhaul, and the outcome of it was that a completely new structure of board was adopted. One which ensured that every member of the New Zealand Cricket board was truly independent. They were not representative of the regions. A particular region. So ultimately, that enabled that group to act in the best interests of New Zealand Cricket. It didn't mean it wasn't acting in the best interests of the regions, because that was the role of New Zealand Cricket, was to be guardian of cricket throughout New Zealand. Yes. But it meant that each board member wasn't encumbered by - A particular region. - having to report to a region as well as trying to deal with the national situation. Yeah. Were you partway through your legal career at that time? Yeah, well, I was, and what I found in the end is because the governance wasn't good, that the amount of time that it was taking was just far too much, and ultimately, I had to step aside because I couldn't handle that as well as doing my job as a lawyer. Right, right. But then later on, I came back into it when it was in a much better state, and it was possible, you know, it was possible to handle both, and then ultimately, I left the law and became the chief executive of New Zealand Cricket in 2001, and that just then became a lifetime since then involved in sport. Doing what you love, yeah. As lucky as that. That's really interesting. So the topic du jour, you recently studied the board selection processes of six top sports in New Zealand and three in Australia. What inspired you to do that? Well, I was doing a piece of work for one of the major sports in New Zealand, and they were asking me to ultimately recommend to them how, what constitutional changes should they make to give themselves the best chance of electing a high-performing board. And so that sort of meant that I started looking at how do, how are other sports doing this? I knew how cricket did it, and I was, you know, obviously very strong supporter of how they did it, but I wanted to find out. So hockey, netball, rugby, rugby league, and then looking across the Tasman at rugby and rugby league and football, just looking at their constitutions and understanding how each of them operated. What I found, Mark, somewhat to my surprise, is that there was very little commonality as to how they went about this. And I developed a view that I thought it was pretty convoluted in most instances and could be straightened out and made a hell of a lot simpler for much better effect. And that and that then got me thinking about, okay, so if I'm going to sort of write down what I think the recipe is for constructing a good board, what would that look like? And so ultimately, I came up with, you know, a list of things that I felt was really important, and they were things that just didn't stand on their own. They interacted with the other parts of what I was recommending, and so it became quite an interactive package that I was recommending that the sport I was working with should adopt. The key to it was a few things, right. One was to understand the really important role that a board appointments panel plays. Yes. A panel that is there to sift through candidates and to put the qualities of a candidate as against what it is that the board needs as identified through a skills matrix process, and then to come up with who they thought would be the best candidates to go on that board. So critical to the whole thing for me was the making sure that the board appointments panel was fully powered to do a really good job. What I also knew though was that in each of the instances of the organisations that I was looking at, they're member organisations. And I have this really strong belief that ultimately the members should have the say on who sits on board. So it became about making sure that the members empowered the board appointments panel to do their job and then ultimately took what they had recommended and effectively have the confidence to accept the recommendations by virtue of their confidence in the board appointments panel. Right. So to get that confidence, they needed to have, they needed to have representatives sitting on that board appointments panel. Right. So then part of what I explained to this NSO [National Sports Organisation] was the best way of constructing your board appointments panel, which ultimately meant that you needed to have a couple of member representatives in there. You needed to have someone from the board of the national organisation who you were dealing with, because that person, and it's usually the chair unless the chair is standing, that person will have discussed it with his or her own board and be able to pass on to the board appointments panel what it is that the board thinks that they need. Yes. And then another critical member of this board appointments panel is someone who's completely independent. Someone who's not caught up in the sport that's at the centre of this, but who is skilled in governance and in sport governance and can come in and listen to what's going on, can probably with slightly more independent eyes look at the candidates that are there and play quite an important part in ultimately the decision of the panel as to who they're going to be. Yes. To be elected. You know, another aspect of this was to get rid of barriers to people putting their hands up to apply, because a lot of sports were requiring applicants to be endorsed by one of the members of the organisation. Well, there's no point in that. That's just a barrier. A really good person who's really skilled in governance may have nothing to do with sport. How's he or she going to get endorsed if they don't know them? And so, and do they really want to have to go cap in hand to a member organisation and say, "Will you please endorse my nomination?" So they can volunteer their time. Far better just to have the whole thing open, people be encouraged to apply, and then allow the board appointments panel to sift through who's put their hand up to work out who's the best people. So you're talking a board appointments panel of four or five people? Yeah, yeah. I you know, I wasn't really stuck on whether it was four or five, but it should be a minimum of four and a maximum of five. Right. Whichever way you want to go, I suppose. Quite often if you know that the members are nervous and they are feeling at risk of being disenfranchised by the process, then it's not a bad thing to have three members, the majority. Yes. And the good thing then is that when the panel goes to the full membership at an AGM [annual general meeting] or whatever to say, right, these are who we think should be on the board, and the members vote on that, the members can do so in the knowledge that their own representatives have been key parts in that decision-making process. Yes. Thing you're really trying to avoid is the members on the floor on the day of the AGM starting to make up their mind about whether they want him or her. They don't know the people. They you know, they're just flying blind, and parochialism and bias and everything comes into play. Whereas if everyone's gone through a board appointments panel process, they've been critically examined by the panel, then the members should not second-guess the panel. The members should just be happy to accept. So in the case of New Zealand Cricket, which has had this this type of structure in place since 1999, I've been to quite a few of the AGMs since that time. The election of board members at each AGM usually takes up about five, six minutes. Right. And it's simply because the members have the trust in the board appointments panel because of the way it's constructed and the way they go about their business. And ultimately, if anything does go wrong, the members do still have the power to say no. Well, they do. And we saw this actually play out in rugby last year, who; rugby at the end of the Pilkington report and the pretty significant debate that happened afterwards ultimately adopted a constitutional model that was very, very similar to what cricket has had for 25 years. Yes. But in the very first time that they then went through the process, the members did actually reject one candidate. Right. Now, that's never happened in cricket. In cricket. And I you know, for me, I would feel a bit uncomfortable about that, but it was reinforcing that ultimately the members do have a say. Yes. Yeah. They just, they should not overplay their hand when they have a say. Yes, absolutely. Moving to the board itself, what do you think is the optimum size of a board of directors and why? Well, I don't think it should be more than nine, and the reason for that is that it becomes far too hard for a chair to facilitate the group in a really constructive way - Yes. - if he or she is constantly having to seek the feedback of 10 or 11. You know, for a number of years, I sat on the board of the International Cricket Council, 17 members, all of them bar three fully representative of the countries that had put them on there. Disastrous, the whole thing. Whereas in the case if you've got eight or nine people around the board table,- Yes. - the chair can manage the facilitation of that group. And so that's a much easier; and you also then have, you don't want a hundred different points of view to deal with. No. If you've chosen well, then your chair's, your group that you've chosen is going to be able to sift through and come up with the pros and cons of whatever it is that they're dealing with. So that's enough. A minimum number, I think probably seven. I've had experience of seven, eight, nine, and my preference probably, funnily enough, is eight. In the middle. Chairing. It's an easy number to chair. Sometimes when you've only got seven, there's just a risk you get a bit light in certain areas, but you know, - Right. - that's, you can deal with that in different ways. But if I'd pick it probably around eight. Yes. And now having read the document that you wrote, but knowing that you haven't read this, some organisations have fully elected boards, some have a mix of elected and appointed board members. The challenge in my experience of a fully elected board without the board appointments process that you're talking about is you end up with a random set of people that you don't necessarily have the mix of skills you need. Yeah. What is the preferred, your preferred method, and why? Well, I hate with a passion constitutions in sport that set up almost a twin system of some elected, some appointed. I think you just leave too much to chance, and you run the risk of the elected members sort of carrying forgetting that once they're on a board, they're there to act in the best interests of the organisation they're on the board of, - Yes. - as opposed to who's put them there. And even the appointed members, I'm not that keen on a process that where a board appointments panel has the right. - Complete authority. - yeah, to appoint to a board. That's where I come back to what I said before is I think the members should have the final say. They just need to exercise that right. So the answer to your question really is what I like is one system where all candidates go through that system through the board appointments process and that the recommendations of the appointments panel are then put to all of the membership at an AGM for endorsement. Yes. The members can exercise a right to reject if they really want to, but the truth is they shouldn't. Because, if they've got trust in the appointments panel. There needs to be a good reason, yeah. And they should not then unilaterally handpick from anyone else who hasn't been recommended, Really, if they want to reject someone, then they should go back through the whole process and allow the board appointments panel to do their job again. So the board appointments panel suggest, or recommending one person for one post or are they recommending a couple from which the members choose? My view is they should recommend exactly the number that's required to fill the vacancies and not more. Yes. They can actually recommend less if they want to. If they don't think through the application process that they have found - The right candidates. - the right candidates, then don't put them on the board. Have a vacancy and deal with that. You can co-opt or you go back through a process if you really want to, but don't just feel like you have to fill in the vacancies regardless of the quality of the candidates. So it's important to have a constitution that's flexible enough to allow that. Yeah. And so that you know, it's not hard to create a good model constitutionally. The other part we haven't talked about yet is the incredibly important role that a board skills matrix plays. That's the next topic. Yeah. Well, I was just anticipating. You know, whatever the deliberations are of the appointments panel, it's got to be cross-referenced against a skills matrix. So can you describe that process? Well what, this is the way I do it. So you start off by working with your own board, NSO board, to say, "Right, what are the key skills,"competencies, experience that we need around our board table to give us the"best chance of having a high-performing board?" Yes. Now, you know, when you first start this process, you'll end up with a shopping list of 25. Then you've got to be smart enough to prioritise what's the most important skills and experience that you need and just focus on those. Don't worry about trying to cover everything. And then, what you do then, is you then ask each board member to assess themselves as against the matrix that we've come up with. And you as a chair, you put a lot of pressure on them to do that honestly, because a chair doesn't know all of the skills that a particular board member might have. So you ask the board members to do that, and ultimately that spits out an end result that gives you a good picture of what skills you have as against what are needed by the board, but it also starts to show up the gaps. If you've got time, what I'd always recommend is that somehow you engage your members in that same process, because it's really helpful if the members themselves can better understand what skills are needed by the national board, what exists and what doesn't exist. So that when they're thinking about, you know, the sorts of people that they think are needed on a national board, then they've been guided by the skills matrix. Right. And then, if you've got an agreed skills matrix, then the next step is if you're just going through your annual board election appointment process, then the national board will provide non-binding advice to the board appointments panel. It's non-binding because they should not preempt the role of the appointments panel. Yes. They've delegated to that panel to make the decision. So don't try and hamstring them or paint them into a corner. But a good board appointments panel will take really careful notice of what the national board says is important. The gaps are. Yeah. What skills they need, what gaps, and that's helpful. It it's all also helpful if the same guidance can be obtained from the members. Now, you have to, you know, there's a, you have to commit yourself to a good communication process to enable the members to provide sensible guidance. If you can get ultimately a board appointments panel sitting there that has sensible guidance from the board itself and sensible guidance from the members, it gives them a huge head start as to how to assess who they need to interview and ultimately who they decide should be on the board. So all of that's vital. And then you also, I mean, you know, I'm going on a bit here, but what you also have to do is you're not just looking at the year in question. You're looking at the next two or three years after that and saying, "Okay, where are we heading? What are we going to need?"Who is up for, what's the turnover of the board going to be or what's the expiry dates of the terms of each board director?" Yes. You know, I have a view that a board director should be there for three years, and then if he or she wants to remain on the board, they then resign and put themselves up for re-election and go through the whole process again. I think that's good governance. And most constitutions by the way, I found do allow for something similar. Three-year terms. Three or four years, but three years I think is a good length of time. So you, what you're trying to do is, in an evolutionary way rather than a revolutionary way, is keep the board refreshed. Yes. And also because the sorts of skills that you might think you need in 2023, when you get to 2025 and you look at what's in front of the organisation, the truth is there's some other skills you're likely to need. And you know, the emergence of artificial intelligence [AI] is a really good example of, it is really helpful if you have AI competency within one or two board members that can help guide the organisation and ultimately the chief executive as well as to how to get to grips with that. So you know, it's, you don't set things in concrete for too long because you don't again want to hamstring the whole process. You actually got to have the flexibility to move. So the skills required are going to be based on the context of the organisation and its strategy, where it needs to go, what it needs to achieve over the next few years. Yeah. And you know, as you say that those things change. Three years ago, I don't know that many people would have said we need somebody with some artificial intelligence knowledge because ChatGPT took off two years ago, right. Yeah. And suddenly it was here, and now it's evolved so quickly. What are the sorts of skills that you would expect to be standard on a skills matrix for, you know, all or most not for profit boards? So what you want, say you've got a board of eight or nine. Yes. It is really helpful if five of those, say, have good governance experience under their belt. You need people around the table that understand governance. It's really helpful if a couple of those understand what it's like to be a chair, and so that you know, that can be brought into play. I've, in recent years, as I've built skills matrix, I have shifted along a spectrum where say, five years ago, if I sat down and mapped out what I thought was an appropriate skills matrix, a lot of the components, say if you end up with a spectrum with say 10 components that you think are necessary for the board, most of those, a few years ago, most of those would have been what I'd describe functional skills. Accounting skills, legal. Yeah, legal skills, that just, you know, functional stuff. Yes. What I've learned in recent times is the value of emotional intelligence and the importance of each board member being able to display a level of emotional intelligence that will enhance the likelihood of them being a good cultural fit for the board that they'll sit on, and the organisation that they're part of. And so the skills matrix has to, in a gentle way, not only cover off on some of the functional skill components, but also encourage thinking about what's the cultural fit of the candidate. Yes. And try and ensure that, you know, you're choosing people that do have good EQ [emotional quotient], because I have this strong belief that the highest performing boards need two different things. One is a really good functional governance platform, but then sitting right beside that, a really high level of emotional intelligence, highly attuned. And I think it, a good functional platform will enable you to sort of mechanically run the board, complying with what the requirements are. The emotional intelligence creates the magic. It's what will help you understand the opportunities and understand the risks, and you know, you need to understand both, and you need to have highly attuned risk identification mechanisms. You need to be able to see what could jump out at you because there are issues that, it just might only be one issue, but it's of significant enough importance that it completely derails a board and an organisation. Yes. So an example of that is if I go to cycling, the death of Olivia Podmore and the circumstances that surrounded that death was so catastrophic that it completely derailed the organisation and the board. Yes. And it's incredibly sad, and I sat through the inquest into the circumstances of Olivia's death, and I have just sat there and thought, the board of Cycling New Zealand didn't get this right. They didn't read the tea leaves well enough when this young woman was really needing the right sort of support. And then you get an outcome which is not only incredibly sad for her and her family, but you know, came close to destroying the organisation. And so a board has to have highly attuned EQ so that it can manage situations that are in a, you know, a sporting environment is by its nature fast moving, volatile, a little bit all over the show. You know, boards need to relax into that but stay really focused on looking at what's in front of them and including as I say identifying the risks as early as possible and then putting in place or ensuring that the right sort of mitigations are put in place as early as possible. Yeah. So that's where I say EQ is, when I've been constructing these board matrices more recently, skills that relate, softer skills, come to the fore, you know, where you really are requiring each candidate to be referenced is against a soft skills as well as a hard governance skills matrix. Yes, right. Now, you raised a really good topic there around the experience and the competence of the board members, because in sports organisations quite often the people that are most likely, particularly in the less tier, the lower tier sports, tend to be people from the sports organisation itself, and it's quite hard to make sure that you're getting the right mix of skills and talent in the board. How does an organisation attract the right talent to its board? So the first thing that is necessary is that the availability of the opportunity to apply for a position on the board needs to be really visible so that people who have no connection with the sport know,"Hey, there's an opportunity there,"and I'm interested in governance, and therefore I might consider putting my"hand up for that." And so you need in your, the way you run your whole process needs to start off with real clarity about how you get that visibility across various platforms. You know, you can put it on Seek [seek.co.nz], but you you're going to need to have it on Appoint Better Boards [appointbetterboards.co.nz], which is a really good platform that exists. Sport New Zealand have platforms, the NSO [national sports organisation] itself will have platforms. You may choose depending on the importance of the whole thing to advertise the vacancy in things like the Herald [nzherald.co.nz] and whatnot so that people know it's there. The second thing is you need to be really clear when you are advertising what skills you're looking for that year. Yes. Don't, there are a whole lot of really good quality people out there, but they may not have the specific skills you're looking for. So you've got to be quite clear, this is what we're looking for this year. Yes. So that they know straight away, and then you just, you know, no one is going to, well, whether or not a candidate, a potential candidate is prepared to put their hands up will depend on their assessment of, from a distance, of the reputation of the organisation. They don't want to take personal risk walking into it before, you know, because of what cycling's been through before I was prepared to commit to a process to stand for the position of chair, I did a lot of due diligence, and in part it was to satisfy myself that they had genuinely learned a lot from the mistakes they made around Olivia Podmore's death and were well on the way to doing, putting in place what they needed to have in place to prevent a reoccurrence. So you know, if I had looked at them and they had been a little bit ambivalent about fixing things, then I probably would have said, "No, I'm not interested." But I was satisfied enough by what I saw to know that I wasn't going to be putting my reputation at more risk than was appropriate by offering to get involved in that. So that's actually quite important that the reputation that you look at the values of an organisation, and you're still looking at a distance if you don't, if you're not in the middle of the sport and trying to assess whether, do they live up to their values? Are they a good organisation that you would be proud to be part of? So that comes into play a lot more than what might be understood. So you know, there's a whole lot to this. There is absolutely. The board itself. What are your thoughts on tenure of board members? You've talked about three-year terms. Do you think there's a period of time after which board members should be required to stand down? Should they be allowed to stand again at some point in future or? So despite the fact that most of the constitutions I looked at had all sorts of variations about how they piece together their board matrix, the one thing that was reasonably common is that a director would be appointed for a specific term, be it either three years or four years. I prefer three years because I think it's easier to manage the ongoing process, but four years is okay. Then I also agree with what was in most of the constitutions, is that in circumstances where a director gets to the end of that first term, they should be entitled to, they are being forced to retire by rotation, but they should be entitled to put their hand up again. If you are working on four-year terms, then I think you can only do that once more, so that eight years becomes the limit. If you're working on three-year terms, then I think you can do that twice, so that nine years becomes the limit, and a lot of organisations are working on eight or nine years now. A good constitution will still allow for exceptions, where if there's a particular director that is so vital to the health of the organisation, there should be a constitutional ability to use exceptional circumstances to further extend that person's term. Maybe by one year, maybe by two years, you know, that's something to be judged, but by and large, if you've had nine years on a board, then you've given it what you've got to give it, and it's time to move on and allow someone else to come into play. You do ask an interesting question though about should they be allowed to reapply at a later date, and I think probably the answer is yes. And I think of my own circumstances in that, you know, I started off on the board of New Zealand Cricket in 1990. I did a term and then finished in '92 or '93. In '98, I reapplied and got appointed, and I don't know whether I completed the first term, but if I didn't, it was because I then became chief executive, so I resigned from the board. Then I went into Rugby World Cup and got out of cricket for the time being. Then I reapplied in 2013 and stayed there then for as it turned out 10 or 11 years because there was a reason they needed me for a little bit longer than nine years, and so they enacted that. But I think, you know, my gut feel is that in nine times out of ten, the director would have given what he or she has to offer within that nine years, and it shouldn't be extended beyond that. What sometimes becomes a problem is that a director almost develops a sense of entitlement that at the end of a term, if they have the opportunity to reapply, that they should be more or less automatically rubber-stamped through. And I don't agree with that either. No. Because the reason you create that break is to enable the organisation to look at what it's got, and to look at what it needs for the future, and make decisions for the future. And sometimes even someone who's been a good director for a period of time, may not be perceived to be of critical use going forward. So that the organisation should be free to move on. They just need to handle those situations empathetically, but they should have that right. Absolutely. And with a board of nine three-year terms, you'd be thinking that, would you be thinking then that three people would be up for renewal each year? Yeah. So you got a continuous roll. So that's good because, you know, if you do it that way every year you are creating three opportunities, and so that gives the board and the appointments panel good flexibility. Also, you know, when you're sitting there as a board director and you're on a board for a while and you start to get a bit tired of being on the board, it's quite nice to come to the end of the term and be able to comfortably say to everyone, "Thanks, you know, I've done my time." Yes. "I've loved it, but I've got"to move on." And so just having that break means people can do that, and the whole thing to be done respectfully. And you also get continuity of a significant, the majority of the board remaining there during that refresh. Yeah. I was involved in an international board, you wouldn't believe this, 11 people on the board then moved down to 10, I think, and everyone's term expired at the same time. Yes, that's, you know, that's why these things have to be planned out, you know, boards have to have rotations sorted out well in advance, so you know what's going to happen, in terms of, you know, the timing of everyone and to, you know, it's so vital just to completely avoid the situation you just described. Catastrophic for an organisation if just about everyone walks out the door at the same time. Unless they've been sacked by the members, and at that stage is probably a good thing. A needed refresh. Yes. Which probably occurs because they've all been there for more than nine years and become quite stagnant. But often it's just the, you know, the stuff up of how it's been governed and they haven't had the sense to realise it, and so the members say, "Well, we've had enough, and we want to start again." Now, I've been through that situation, and fortunately, on the occasions I've been through it, the members of the board have read the tea leaves and said, "Right, okay, we realise our time's up. We'll move on." Right. You know, they don't have that attitude, it can get a bit messy. Yeah. Coming back to the appointments panel, what sort of turnover would you expect in that panel? Well, if you work on the theory that you've got say four or five on the appointments panel, that one of those comes from the NSO board. Yes. And that it's the chair, effectively that chair should sit on the panel every year unless he or she is standing themselves, in which case they shouldn't. If you've got an independent member, it is really helpful if that is also the same person for say three years in a row, because that person then, who's only popping into the organisation for the purposes of helping out with board appointments over a period of time, gets to better know the organisation, and secondly sees what's happened as a result of some appointments he or she's been a part of the year before or the year before that. Yes. Now, with the members of the panel that come from the members of the organisation, say the regions, I think it's really important that that is rotated so that you don't get someone from a region who grabs hold of this and manipulates the process unfairly. Yes. So in cricket, for example, and I do keep going back to cricket a fair bit, but it is a good example, the six regional members of cricket, each year three chairs sit on the appointments panel, and then the following year the other three chairs sit on it. Right. And so that's rotated every year. Every year. Now, that's helpful because you don't get stuck in one mentality coming from that group, but also I like having regional chairs exposed to the whole process so that it helps them better understand the national organisation, because you know, the mistake I think that is made by a lot of regional organisations is they think the national organisation is just simply a bigger version of themselves, whereas usually, particularly in the bigger sports, the business of the national organisation is hugely different than that of the regions. You know, part of it would be the same, but actually more than half will be internationally facing. Yes. You know, and so quite different. So it's really useful for the chairs of the regional organisations to actually be put in a position to better understand that that's the case. Right, right, okay. From the board itself, how should the chair be appointed? I think it's critical that it's the board itself who appoints the chair. And has the unilateral right to do that. Yes. There are some constitutions that give that right of appointment to the members, and some constitutions that require whatever decision the board has made to be ratified by the members. I don't agree with either of those things. I think the board is generally best placed to know who its leader should be. Now, what they should do, the appointment of a chair should only be for a 12-month term. And then and you're going by AGM [annual general meeting] cycles here. Yes. So typically what happens is that a chair goes through 12 months, an AGM happens. At the AGM, there are the board elections. So you know at that moment who your new board is. Yes. That new board should meet, preferably on the day of the AGM after the processes have been completed, and the very first thing it meets to do is to appoint its chair for the next 12 months. Right. Almost always, if the incumbent chair has done a good job, then that's just simply rubber-stamping that person for another 12 months, and that's the right thing to do. But the board should always have that right every 12 months to determine. Who its chair is. Yeah. Yeah, that makes a lot of sense. Yeah. What are your thoughts on co-opted board members? How should they be used? I think there's a place for them. Most often it will be in circumstances where for whatever reason an existing board member has had to vacate, you know, by illness or death or work commitments. You no longer have the full contingent of board members. So you've got a gap there. The board itself should be entitled to fill that gap, but only for the period from then through to the end of. The next AGM. Yeah. And then if whoever they co-opt on wants to continue, then that person needs to go through the process and be appointed and elected in the right way. Yes. So I think that, you know, generally I think that works pretty well. Would there be any circumstances where you'd have your board of nine and you'd co-opt a 10th person for a meeting or two? Well, you need to carefully examine why you're doing that. I mean, is it because there is a specific purpose or skill that you want access to? That's the most common. Yes. My question would be, do you actually have to appoint them, co-opt them on the board to get access to that. Or would you just bring them on as an adviser for a meeting or two. Yeah. Hook them in somehow, right, without them needing necessarily. Because a lot of people who have those sort of individual skills quite often don't want to be tied up as a board member dealing with the whole thing. No. They just want to offer the skills they've got to help. Yes. Yeah. And so you make it easy for them, as well. Right. So you know, co-opting is, it's a useful tool used wisely. Right. I've got one final question for you. In your quite extensive career of governance, what's the best advice you've received? You know, it comes back to governance is an art that needs to be learned. You cannot operate on instincts. You have to devote yourself to learning how governance best operates and understanding what good governance, great governance actually looks like. I feel quite sorry for a lot of directors, particularly inexperienced directors who actually, they've only had one experience of governance. They've got no idea whether that's good governance or bad governance or just mediocre. And what I find in sessions that I run, is you start to explain to them what good governance looks like, and you see their faces and the pennies start to drop that, hey, the environment they're in is not actually that flash. So that's a bit unsettling for them, but it's part of the learning process, is you need to be able to distinguish between what's good, and you just don't know that. You've got to learn how to do it. Yes. So governance is it's a bit like learning how to coach a top sports team. I was a player. If I then wanted to go on and be a coach, I have to learn how to coach. Yes. I wouldn't know how to do it just because I was a player. I would need to learn about it. Well, it's the same when you're a director. You might have lots of skills and experience in your life that are really helpful for being on a board, but you have to learn about how to be a good board member or a good chair. Martin, thank you very much for sharing your time and expertise. I really really appreciate it. I hope we can do this again, and I look forward to seeing you next episode. Thanks, Mark. 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.