Governance Bites #128: Strategic thinking on the board, with Tony Dench

In this episode of Governance Bites, Mark Banicevich speaks with Tony Dench about what it really means for boards to think strategically — not just plan strategically. X123 shares practical insights on how directors can lift their thinking beyond operations, keep strategic discussions alive between board meetings, and create energy and focus around long-term opportunities. They explore how chairs can enable deeper conversations, how diversity enriches strategy, and what distinguishes high-performing boards. A must-watch for directors who want to move beyond compliance and drive real strategic impact at 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.
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Transcript

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Hi, I'm Tony Dench. I'm a professional director about three years now into my governance career. I sit on five boards, a couple of committees, half a dozen advisory boards, as well. I do a little bit of facilitating and strategy sessions along the way. And that's the topic du jour, right, around strategic thinking. Yes, indeed. Hi, welcome to Governance Bites. My name is Mark Banicevich, and as you just heard, I again have the pleasure of spending time with my friend Tony Dench. Tony, thank you very much for your time. Thank you. Looking forward to digging into this topic. It's one that will interest me very much, as well. When you talk about strategic thinking, what does strategic thinking mean in the context of the board of directors? So I think the strategic thinking is about lifting up a level and getting out of the day-to-day operations of the business and thinking, what's the environment look like? Where are the opportunities within the environment, and into the longer term? So instead of six feet in front, looking six months, six years, six decades in front, where are the opportunities? So a longer lens and at a higher level. And how would you distinguish between strategic thinking and strategic planning? So I think strategic planning is you've worked out what your strategic goals are for the business and the strategic plan is about how you're going to go about reaching those goals. The strategic thinking is often more around an environment scan. What could come and really damage the business? What could come along that would be an opportunity that could transform the business? Right. Why is strategic thinking such a critical capability for boards? Well, the speed, the cadence of business in today's modern world is so fast that the executive team often just don't have time for it. They're very focused on delivering the here and now, keeping the team running, working their way through. So the board table is really the place where the strategic thinking can evolve. And it's the role of the board to deliver that and to work with the executive team to build the strategy and to keep that on the radar. I think one of the challenges is that often strategy is seen as an event at a board table rather than a continuum. Yeah, okay. What are some of the signals that a board's spending either too much time, which I don't know how often that happens, or more often too little time on strategic thinking? I think you can see it sometimes in the agenda for the board meeting. So if it's a very traditional agenda which looks at the minutes of the last board meeting and perhaps a little bit of risk management and minimise health and safety events followed by a review of last month's financials, that will feel like there's not a lot of room within there for a strategic discussion. If the agenda perhaps is more of an environment scan at the top and you know, what are you seeing? What's happening in the environment around? Where are the headwinds and the tailwinds? That fluid discussion can often lead into, what does that mean for this business? And so when you see that in an agenda, I think that that's much more likely to deliver a strategic mindset and a strategic discussion and that longer lens around the horizons for the strategy, and the opportunities, as well as the risks that could come along, which prepare the business for addressing either one of those two things, or both. I've had a couple of conversations now with people who are very much about putting your strategic conversations at the front of the board meeting and following up with the operationals. How has the performance been in the last three months? And the minutes of the last meeting being the last thing on the agenda. And I really like that approach. What do you think in terms of, say, a percentage split, do you like to see of the time spent in a board meeting on strategic thinking versus, what happened last month? Well, I think it will often depend on the state of the business at a particular time. But less about the time spent and I think more about the energy spent. So, reviewing last month's or last meeting's minutes and looking at last month's financial accounts, it's often not the most dynamic and energetic element of the meeting. Whereas an open discussion and a fluid discussion around, what's happening at the moment? How do we think about this? How will this impact on this particular business for good or for bad? Can generate a different energy. So I think it's more about the energy spent in a meeting and the split of the energy, than it is about the time, because the review of those standing papers might take the same length of time, but probably not the same amount of energy. Yes. It's difficult to have a really deep strategic conversation. It's hard thinking. And it can be exhausting. But it can also be energising whenever you get to the opportunity pieces of it. And I think because of that, it needs to be at the front of the meeting. And it needs to take, quite a bit of the energy of the meeting, and it sets the mindset. Yes, right. It's another good reason to do it at the start, because you don't want to be onto this when everyone's exhausted from having looked at the financials for the last few months. Exactly so. And so as you say, get up front, dig into a couple of really detailed strategic issues and get your hands really dirty on those. And if you have to kind of spend a little bit less time and a little bit less energy on the stuff at the back end, then that's not necessarily a bad thing, right. Okay. It does have to be relevant. Yes. So it's not a general chat about the latest gossip in the economy or the international geopolitics. But that can be part of it, but it has to be relevant to the business, because otherwise it gets theoretical and quite irrelevant quite quickly. So bringing it back all the time to, and what does that mean for this business? The way that I've, or a way I've seen that done that I really like is actually having a couple of strategic topics on the agenda. So this is a topic we're digging into now. You spend 20 or 30 minutes discussing it, make some decisions, and then go on to the next topic. Great. Yeah, cool. How do you see the role of the chair in enabling effective strategic conversation? Asking the right questions. So the chairing piece, saying relatively less. But leaving space for others to talk and asking the right questions. So creating that environment for that conversation to flourish, without it getting off track and becoming into the less relevant area of it. And bringing it back all the time to, and what does this mean for this business? So the chair touching the conversation and steering it into that right area, and then leaving room for everyone around the table to talk and to contribute. Of course, the other piece of the chair has to do is make sure that everybody's voice is heard, so it's not dominated by one or two in the room. And often if it's an economic or geopolitical type discussion, there will be directors at the table who are stronger in that suit, and maybe directors around the table who are more technical for the particular area of the business. And they might say, well, I need to defer to these others who know more, some of the insights that will come from those directors who are maybe a bit quieter, can be stunning for linking it from what's happening in the environment, so what does it mean to the business? Right. Absolutely. What structures or tools or processes best support boards in thinking strategically rather than operationally? Well, I think having it in the agenda to start with, deliberately putting it on the agenda, we are going to have a strategic discussion. And often there will be either a topic or a news item or a report that's been released that can be the starter for 10, the start of the conversation. And maybe it evolves and it goes away from that and into other places, it gets linked to other places. But I think that's a good tool to have something on there, firstly on the agenda and secondly with a starter of the conversation. Very difficult to say, "Oh, let's have a strategic conversation," and off we go. Something to start the conversation and to anchor it. And again, to bring it back to, what's it mean for the business? So something like a board paper or as you say an article, or something like that, to get people started. But not an academic or a theoretical discussion, always tying it back. Right. How do you ensure that short-term pressures don't overwhelm the long-term time, the time that's spent by the board on long-term issues? if there's a crisis, if there's something going particularly wrong or in the middle of a project, something going particularly well, it's the focus of the board at the time. Sometimes that short-term element will overwhelm it. And that's okay because that's the thing to be dealt with at the particular time. So long as that's not every time. So that the strategic discussion does actually happen. Because otherwise there will always be something that will be - Exactly, yeah. - the topic of the day and we'll focus on that and we'll push a strategy discussion to another day. And that's whenever strategy ends up being the one or two day strategy session just before Christmas, when the sun's shining and everybody's tired, and it's not as effective. And strategy can't be, you know, one day out of 365. It has to be there. more often than that. And that's a neat way to do it. But it can be overwhelmed if, there's a crisis, if there's a particular topic that the board needs to address. It just might not be the time to, "Well, let's have a strategic discussion before"we get to this big issue that we need to deal with." Right. So as you say, if there is a crisis, it may be important to dig into that and try and resolve that early. If you find that over time you're spending insufficient time on strategic thinking because of crises keep popping up, what you maybe schedule extra meetings to make sure you've really focused on that. Absolutely. And as you say, not just a strategy day once a year, - Yes - but more regular time dedicated to it. So it'd be about watching the minutes and making sure that the discussions are happening. Right. What personal qualities or mindsets distinguish directors who excel at strategic thinking? I think many directors are optimists. So having an optimistic view of the world, so deliberately looking for opportunities. And sometimes the perception of boards is that a board and a governance body is there to slow the business down, to govern the business, to manage the risk, to make sure that the business doesn't do things. And in a strategic mindset, it's very much around, well, what can the business do? What could the business become? Where could it go? And that optimistic outlook, I think, is quite important to the lens. Because it would be really easy to, you know, look at geopolitics or the environment or the economy or even the competition, huge competition within New Zealand, and get a very kind of compliant and small mindset around,"Well, let's do as little as possible, because if we try to do that,"it might not work and then that wouldn't be a good look and that"would be a problem." I think that is often the perception of where boards operate. Whenever those people on the boards who have that optimistic, curious mindset, what could it become, where could it go to, can often energise the leadership team, as well, and uncover opportunities for the future. Or at least areas where you can defend against a particular risk, rather than worrying about it, not doing anything at all. Yes, yeah. And I'm sure that must be the most rewarding conversations. They're the ones that I'm sure I would really enjoy, as well. How do diverse perspectives enrich strategic debates? So in terms of diversity on the board, diversity of thoughts, diversity of background, those sorts of things. How do they enrich strategic debate. Yeah, it is interesting because having that left field view, that you think you're having a conversation amongst a good understanding, and then someone comes along,"Well, how does that impact this?" And you can almost sense in the room, and everybody sits by and goes,"Oh, that's a really good question." And that diversity of thought, which often comes from someone who starts the question with, "I'm not really sure I understand this." And then they demonstrate that actually, they understand it really, really well. They've got a really good perspective on it. And that can kind of stop a conversation in its tracks and make people think. And it's in that area where they're thinking and considering that different perspective that often the creativity piece comes through, and you can start to uncover the opportunities that can come from that. Or the problem that you will,"We need to tackle that problem before we go any further. I'm really glad we"spotted it because it would have stopped us in our tracks later on." Right. What are the most common mistakes boards make when they're trying to engage in strategic thinking? I think perhaps maybe trying to do it too deliberately, in too structured a way. Being comfortable with the unstructured conversation and letting the conversation flow, hearing all of the different voices, often even voicing or listening to what appears to be the idea that just couldn't possibly work. The silly ideas or the silly questions or the,"Oh, I don't understand," when they do. I think allowing the room for that to happen at the board table is really important. It's like trying to force yourself to be creative, right. Yeah. It's got to to be a bit more organic and things. Being comfortable with that unstructured part of the conversation, because often a board meeting, in particular, is quite a structured conversation. So that unstructured element is probably where it's most creative. Yeah, that makes sense. What have you seen high-performing boards do differently when it comes to strategic thinking? What stands out? Well, I think it's the same piece. Deliberately having the strategic conversation and leaving scope for it to happen. Because it can be an uncomfortable space. And then having the ability to bring it back to, and what does it mean for the business. So the high-performing board will bring it back, and bring action points out of it, whereas the board that isn't quite at that level can just meander and get lost and have what appears to be a strategic discussion. But without the outcomes. Yes. Without reaching any kind of conclusions about the question, what does that mean for this business? What could it mean? What do we do next? To summarise the themes that have come out of the conversation so far around this point, firstly, dedicate time to it in the board meeting. Yeah. Secondly, be comfortable with letting the conversation flow and go in directions you didn't expect. And thirdly, bring it back to what's relevant to the business. Yes. And then finally, get some action points. Yeah. Okay, that's quite a good summary. I did well. You did. What advice would you give to a new director who wants to strengthen their contribution to strategic conversations? Well, I think read widely. So try and relate what you're seeing in whether it's reading the business media. or just observing what's happening in the economy locally and abroad, and trying to draw those parallels. And then ask others, "Oh, well, I've seen this"happen in this market overseas. Do you think that could happen here?" And the conversation that will flow from that will build the thinking. And understand that in strategy, there's not necessarily anybody that's got all the right answers. So in many respects, that the contribution that a new director has to make is with fresh eyes and fresh thinking. But really everybody's thinking freshly for strategy. The interesting thing, as well, I find about strategy is, as you say, there's no right answer. So with the best intentions, with the best process, with the best thoughts and discussions, you may still come up with something that doesn't work. And as you said earlier in the conversation, be prepared to change your mind. Yes. When new information comes in, be prepared to adapt. Cool. Yeah, Tony, cool conversation. Great, thank you. Fun catching up with you, mate. Thank you. Look forward to catching up again soon. Excellent. And see you next episode. Cool. 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.