Governance Bites #124: Transitioning to full time director, with Tony Dench

In this episode of Governance Bites, Mark Banicevich talks with Tony Dench about making the leap from executive leadership to a full-time governance career. Tony shares the realities of the transition — from losing the security of a salary to learning to run a small business, build a board portfolio, and shift from operational decision-making to strategic influence. They explore what it really takes to succeed as a professional director, the importance of patience, humility, and listening, and why strategy is never a one-day event. A must-watch for executives considering life on the other side of the board table.
 Tony Dench is an experienced board member and chair with a passion for applying governance principles in a practical and pragmatic manner. He has more than 30 years of combined international experience in leadership roles across financial services, accountancy, and law. As a leader, Tony has a proven track record of delivering impressive results through a hands-on, collaborative style that builds trusting relationships based on integrity and empathy.
 A strong advocate for purpose-driven strategy, he successfully implemented this approach as CEO of SHARE, where profits more than trebled under his leadership. Tony currently holds several governance roles, including Independent Director for Utilities Disputes and SBS Insurance, and serves on the Finance, Audit & Risk Committee for the New Zealand Law Society.
 #Governance,  #BoardsOfDirectors, #FromExecutiveToDirector, #LeadershipJourney, #ProfessionalDirector, #BoardroomInsights, #GovernanceBites

Transcript

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Hi, I'm Tony Dench. I'm a professional director. I've been doing that now for just over three years in a kind of a full-time sense of the word. I sit on five boards, two committees, and I sit on sort of five or six advisory boards as well. I do a little bit of facilitating around strategy too, so it's great fun. Enjoy it. Hi, welcome to Governance Bites. My name's Mark Banicevich, and as you've just heard, I have the pleasure again of catching up with Tony Dench. Tony, thank you very much for your time. When we last caught up, you'd been full-time as a director for about 12 months. Yes. So you've been in it a bit longer. What prompted you to make the shift from executive leadership into full-time directing? I think there were probably two elements to it. One was a push and one was a pull. So I'd been kind of working through the executive career for a while and I'd got to a stage where I'd done everything I wanted to do. I'd kind of reached that point where I could keep doing it and I could do it all over again and maybe in a different role or I could do something different. And I guess the executive element of it is doing everything for one organisation, whereas with governance you get a chance to do little bits and quite important bits but for a number of organisations. And that really excited me. And I've been working towards some of the governance roles and dabbling in a few governance positions. But the strategy bit was interesting. The holding to account piece was interesting. And just the breadth of working with a number of organisations instead of giving everything to one organisation - Yeah. - was just really, really persuasive at the time. So a push and a pull. And I decided to make the jump, it was good. Did that kind of happen organically or did you have this long-term plan that you thought this is something I'm going to do in five years time or how did that transition happen? Well I think the direction of travel was quite deliberate but the timing was organic and it was just a greater and greater sense of having achieved what I wanted to achieve in the executive side of things and seeing through some of the sectors that I was involved in, the opportunity to really add something at the strategy level. So both of those things kind of came together. So the timing was a little more organic, but the direction of travel was quite deliberate. And it's important because I think those executive roles, you can do them for a period of time, and there comes a time when you've got to make a decision about whether to do another one or to call it a day on that. Whereas the governance piece can be as much or as little as you want it to be. So I think of it as starting a business. And that's probably the thing that I hadn't appreciated until I really got into it. It is beginning a business. Right. And if I'd thought about it that way from the very beginning, I probably wouldn't have had some of the skint knees and gravel rash that I had during that initial transition. How do your motivations for governance differ from those that drove you when you were a CEO [Chief Executive Officer] and when you were an executive? Well, I think in the executive career, it is about the performance and it's about the people. So, you know, good people doing meaningful work. And that is something that, I was always quite demanding as a leader in a business and quite ambitious for the businesses that I was in during the executive career. And in many respects, the harder you work at the executive level, typically the more successful the organisation will be. So, in governance, then it changes because, not that the executive was ever just about me, but certainly the governance level, it really isn't. It's about the team that's in front, the executive team that are doing that. So I always talk about for a CEO, the role of a CEO is to tell a story and to carry the can. So complete responsibility, but also the ability to tell that story and lead the business. And at the governance level, it's very much a support role. It's very much a support role, an accountability role, and helping the leadership team to do what they're doing there. Okay, right. What was the biggest, you talked about essentially starting a business. What was the biggest adjustment you had to make? I think exactly that. I've been an employee for my entire corporate career since I left university the whole way through to when I left that last executive role. And I'd never ever considered myself as someone who would start a business, who would run a business. So that was a really big adjustment, the notion of suddenly not having security of income, not having that paycheck that comes every fortnight, and the executive roles, you know, those significant paychecks. And when it stops, it stops, and suddenly you're issuing invoices and hoping they get paid. And looking for roles and looking for additional roles and trying to develop the business and change the brand from the executive brand to the governance brand. So it really is, it's starting a business from scratch, learning how to work Xero, learning how to issue invoices and account for them and manage cash flow and run everything from top to bottom. And I enjoyed that, but I hadn't appreciated just how different that would be. Were you seeking to replace your executive level income or was it the target kind of like,"Oh, I can ease back a little bit now. I don't need to pay the, spend as much money on the mortgage." and how long did it take to kind of get to the level of income that you were comfortable? Yeah well I think that was a bit of a shock, as well. I don't think I ever thought that I would step out of the executive role and suddenly have sufficient governance gigs to create that income straightaway but I didn't appreciate just how long it would take to build the governance portfolio. And I was quite deliberate in the way I went about chasing the various roles that I wanted to do, because I wanted to be relevant to those roles rather than just apply for as many as I could and hope that some stick. Right. I wanted to be doing roles in businesses where I thought I could make a genuine difference. So building those, finding those opportunities took longer than I expected it would. And that creates a gap, right. It creates a cash flow gap. It creates a change in earnings. And I knew that would be the case. I didn't necessarily appreciate how long it would take. How long do you think, did it take? So for the first year, I was probably maybe working a couple of days a week. and then into the second year it started to build. But it's taken two and a half, three years to build it to a level where the roles that drop off, because they run for a period of time and then it's time for something new, get replaced by the roles that are there. So it's become much more sustainable now. Right. But it was never about a target salary replacing an executive salary or anything like that. It was really about getting involved with businesses where, yes, I could get paid, but more importantly, I can make a difference and be relevant. Right. How did you navigate the change from operational decision-making as a CEO to oversight and influence of the business? So, I've been more and more interested in strategy, and the economy did us all a favour in requiring quite a bit more strategic thinking over the past couple of years because it's been tough. It's been really, really hard. Whereas in years previously, perhaps, there was as much work there as you wanted to do, so that the firms could simply execute on that stuff. But strategic thinking has been really important for the past few years. And that's really where I try to build the relevance of that. And I worked in and continue to work in sectors where I think I've got some expertise. So financial services really is kind of home turf, and regulation. Banking, insurance, that kind of space. And that's where most of the roles are. So the strategic thinking that's there, I've got enough background to be able to apply that lens. The strategic thinking piece is the bit that I really enjoy. So, what's the environment doing right now? What could it do? And what does that mean? And that's a conversation that we often have at the board tables at the start, at the start of a board meeting. Well, so where are we? What's changing? What could change? And more importantly, what does that mean? What does that mean to the business, brand, and what we should do? You've also done some not-for-profit roles. Yes. Have you done any board roles outside of financial services and how far have you gone from your core? Yeah, well, so to get appointed to the role I guess you've got to have some relevant background so just to have the credibility and just sit at the board table and have those have those conversations, but enough distance to be kind of useful - Yes. - with the diversity of thoughts. So the home turf would be financial services, but I sit on the board of the Master Build Guarantee Scheme and also a dispute resolution scheme for power bills and water and telephones. So again, those are kind of extensions - Yes. - of home turf - Yes. - is the way I would describe that. So still enough to be relevant - Yeah. - and have some decent ideas. But it's interesting getting into infrastructure, into construction, into building, that harks back to my banking days. But it's great fun and it's really important stuff. It's important to the economy, it's important to the country. Right, yes. Did you ever struggle letting go of the management detail? Or were you quite comfortable going, "Nah, it's not"my bag anymore. I'm quite, I just wanna, I'll leave that to them"? And if you struggle with it, how do you overcome it? During the executive career, I had great pride in myself of understanding it all the way down to the base level. Not necessarily being all the way down in the base level, but understanding it to that level. And I can carry that across in the governance career without again necessarily delving into that, across the operational divide and going and doing the work for the leadership team. So I do think it's important to understand, and in a governance sense, staying on the governance side of the line instead of into the operational detail is important. But a director should always be able to delve all the way down to three feet, as well as have a 30,000 feet view, because if something's gone wrong or if something doesn't make sense, drilling down into that detail is actually quite important. So that's about understanding rather than interfering. Right, right. When you first stepped into it full-time, did you discover any gaps in your knowledge? Oh, lots! What sort of gaps did you discover? Well, the first thing I discovered was that I had to work out how to run a business. So that was important. I thought I was quite good at listening, and I thought I had quite a broad sense of economic indicators. And sitting around the board table with the quality of some of the directors that we have in New Zealand, it taught me very, very quickly to listen, because those others around the table had some pretty impressive CVs [Curriculum Vitae] and detail and experience that I could learn from and understand. So I think that was quite humbling, certainly in those initial stages. The governance piece itself and the strategic thinking was kind of where I leant on to try and make up ground around that, because I enjoy that strategy stuff. I really enjoy the strategy discussions and the looking further forward. So the executive career was very much performance in the relatively short term. Yes. And the governance career is much more about, "Okay." Firstly, watch out for the dark clouds in the horizon. But secondly, look for the opportunities. Yes. The opportunities that sit within any economic environment and any business to try and uncover those and approach it with a curious kind of,"what if" mindset. So that was good. Developing that was I guess, really energizing for me. Right. So, a gap insofar as I wanted to develop those skills. But so far, I enjoy it immensely. Oh, excellent. Still do. So interestingly, as you raised, one of the things that hasn't really come up before is as a professional director or full-time director, you are managing a portfolio and running a small business. So it's the actual administration of how to run a small business. It's being a registered company, potentially GST [Goods and Services Tax] registration, invoicing, all that real admin stuff that, with a corporate background you've never really had to do. That's exactly right. And then, as you say, being comfortable as a listener, but then realising when you get into a boardroom with a lot of very talented and experienced people, there's a bit more listening to do than even you thought at the time. That's right. It's a mini-professional services firm. you know, with a dozen or 15 clients is kind of the way I think about it and approach it now, but that hadn't occurred to me before I went into it. Right. How does the workload, the pace and the pressure of your full-time directorship career compare with being a CEO? It's fits and starts, I think, is how I would describe that. So, when it's on, it's on. Preparing for a board meeting, you know, board packs are typically two or three hundred pages. I tend to read those at differing speeds, but probably three times before I'll go to the board meeting and feel prepared. So the preparation for that and the board meeting itself, that's relatively intense. Similarly with an advisory board meeting, which tends to be a little more fluid, a little more dynamic, rather than structured. That's heavy thinking. Yeah. In the time and facilitating takes a huge amount of energy. So if I'm facilitating for a day, at the end of that day, I'm running out. I really am. I'm running out. I'm tired. It's almost a performance and the energy levels required are significant. But that said, when it's on, it's on. When it's not, there are probably two days a week when I'm not doing a great deal. I don't play golf, and I don't intend to try and play golf. But it is nice to have that kind of intense period of maybe travel and board meetings, followed by a little bit of downtime when there's a bit more time for me. So it's more intense when it's on than an executive career. But it's not on all the time. Right, and does that sort of cluster around end of quarter type scenarios for? Yeah, the board meetings will have a cadence through the year. So we've just come through AGM [Annual General Meeting] kind of season, working through the AGM piece. Immediately after the AGM piece, the traditional run of things is, well, we'll have a strategy day. And one of my little hobby horses is, well, strategy's not a single day out of 365, or even two days. It's impossible to do strategy as an event. It's a continuum and something that should be happening. But the strategy sessions tend to happen around now. And in the January and February stage, we're into approving budgets and making sure that shareholder expectations align with the budgets, and then into execution. So the cadence of the year tends to line up across all of the boards, and that can be useful. because the thinking styles can then - Yes, right. - translate across all the boards. It's funny what you were saying about facilitating and how you feel like you're performing. I taught at the University of Auckland on contract for a number of years, and the crazy thing was when you're filling out your IR [Inland Revenue], I can't remember which one, which IR form it is [IR330C]. But you're selecting for your provisional or for the tax [withholding tax] and, resident withholding tax is what it was, and the box you tick is entertainer [Activity number 10]. I'm not sure how entertaining my facilitating is but anyway it seems to work okay. You might find that's the category. Now what advice would you give to executives considering a move into full-time governance? Oh I think the skills that you gain working through an executive career are very transferable into a governance career, so long as you go through that transition period. Probably the greatest challenge in it is the change in income and the change in expectations around the change in income. It takes longer than you might think to do it properly, and to do it well. But I'd encourage any executive thinking of trying to get into governance to start doing some governance roles. Right. Or even some governance exercises. So if it's some of the risk management processes that sit within the executive team that they're working with, that will be useful. if they're then moving into the board table. So understanding how the risk register is put together, how all that works. Risk register, what about the opportunities register? You know, that opportunity mindset across that. Some of the committees that will sit within larger corporate organisations, I'd encourage executives to get on those and, again, start to develop that governance muscle, because that's the piece that will become relevant whenever they're putting together a governance CV, which is entirely different than an executive CV, and demonstrating that you do have some track record across some of that stuff. And then the only thing, the only other piece of advice I would give is at some point you've got to jump. At some point you have to say, "I'm making"the transition and I'm going to make a success of it." Because executives who are in a full-time role where it requires that degree of, I guess, attention and time, don't have the time or aren't perceived to have the time to be able to give to the governance positions. So they'll struggle to get those appointments until they free up their time by stepping away from the executive role. So I would say pick a time and jump. And have a cash buffer to prepare yourself for that first 12 or 18 months. Are there any pitfalls or common mistakes that former CEOs make when they first become directors? I've seen some CEOs step across from CEO into the board of the business that they were CEO of. And that's a real challenge. That's very difficult. Firstly, for the transition for the team, - Yes. - because they're used to dealing with this person as an executive and now they're on the board. It's difficult, too, for the person because it's so easy to drift between the operations and the governance, because they've been so familiar there. So I guess I'd encourage maybe not to go down that road. Try something entirely different to start with. Yes. And maybe come back to that at a later date, whenever there's been sufficient time to have completed that transition. A bit of distance. Yeah, right. Okay, one final question for you. What's the best advice you've received as a director? Oh, the best advice, I received this a long time ago, but it's entirely relevant as a director. If you make a decision and it's wrong, make another decision. So that's the best advice I've ever been given. So if you've got it wrong, be prepared to make another decision and make it relatively quickly. Holding on to, particularly at a board table, holding on to a decision because that was your opinion before, is not great. You've got to be able to be persuaded either by facts or by argument, and change your mind if you need to. Right, and I expect that may happen particularly when new information comes in. Right. Absolutely. Tony, thank you very much for your time. Always love catching up with you, mate. Thank you, Mark. We'll see you again soon. Yes, absolutely. And see you next episode. Thank you. 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.