Governance Bites #162: my governance journey, with Dr Peter Crow

What separates outstanding boards from merely competent ones? In this episode of Governance Bites, Mark Banicevich interviews Dr Peter Crow about the journey to becoming an effective director. Drawing on decades of governance experience, Dr Crow shares the lessons that shaped his board career, the misconceptions many new directors have, the habits that distinguish high-performing boards, and why preparation, curiosity and asking better questions matter more than having all the answers. Whether you're an aspiring director, an experienced board member or a governance professional, this conversation offers practical insights to strengthen your contribution in the boardroom.
Dr Peter Crow has a PhD in corporate governance and strategy. Not only is he an experienced chair and director, he has also designed and delivered governance courses in New Zealand (for the Institute of Directors, and Governance New Zealand), and overseas, in countries including India, Kenya, Lithuania and Ireland. He has presented about governance on five continents, and he works with and advises boards around the world. 
#Governance, #CorporateGovernance, #BoardOfDirectors, #BoardLeadership, #DirectorDevelopment, #BoardEffectiveness, #GoodGovernance, #GovernanceLeadership, #ProfessionalDirectors, #BoardExcellence, #Leadership, #StrategicLeadership, #DecisionMaking, #Boardroom, #GovernanceEducation, #ContinuousLearning, #AspiringDirectors, #GovernanceBites

Transcript

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Hi, welcome to Governance Bites. My name is Mark Banicevich and, as you can see, I have the pleasure again of spending time with Dr Peter Crow. Peter, thank you very much for your time. What I'm going to do in a series of interviews, actually – and this is the first one – is to ask some people who are experienced directors about their journey to governance. How interesting. And that's what we're going to talk about today. Yeah, okay. Hi, welcome to Governance Bites.  My name is Mark Banicevich and, as you just heard today again, I have the absolute pleasure of spending time with Dr Peter Crow. Peter, thank you very much again for your time. This series, as I said before, is around the journey that you've had to become a director, because I think there will be a lot of people out there that are saying, "I'd like to do that one day." But how exactly does it work? So, I'll get a few examples. And you are the first of a few I hope to have this kind of conversation with. So, my first question is, can you tell us about what your career was before you became a full-time director and how that came about? Interesting, isn't it. So, the first one, hopefully I'm not too much of a guinea pig for a start, but hopefully this is useful for the audience and for what you're doing with Governance Bites, which is a great programme. So, my first degree was actually a triple major. It was software engineering, manufacturing systems, management. And it was now over four decades ago that I completed it. So, it was just a wee while ago. So, I started off as a technologist. I was doing AI [Artificial Intelligence] in 1984. But I came through software engineering, project management, customers, business development, international. And then it was around about the turn of the century. It wasn't a single moment, but it was a realisation that others had said that I'd have plenty to offer and I probably wasn't going to be a very good chief executive anyway. So, I made that decision to take on what we now know as a portfolio career. So, it was around about 25 years ago. That was the first decision. The second decision was how do I make that work? And because I had quite a run in both project management and innovation, strategy wasn't too far away. And because, as we know now, strategy is something that happens at the top of business. And it was about the time that this word "governance" was going from academia out into now just the general business language. So, I became involved around about 25 years ago on a realisation that this collective of men and women at the top of organisations actually had control of where the organisation went, the culture, and ultimately the strategy and that sort of thing. And that really interested me. My father was doing some board work for a local cooperative dairy company. And that's where it all started. Okay. In your career then, before you took on the portfolio of roles, you said you never thought you'd be a great chief executive. So, to what level did your career go, and what sort of roles were you in before you stepped into that portfolio? So, I reported to CEs [Chief Executives]. I worked for both domestic and offshore companies. So, local scale companies, which globally are quite small anyway. And for a couple – one in particular, a genuinely global company that doesn't exist anymore, called Novell, a computer networking company. But up to that executive sort of level, but not the CE. Right, okay. But through a business development, customer-facing, innovation sort of pathways. Right, okay. Very interesting. Thank you. And you became interested in governance, people telling you that this is something that you could be good at. There, it was, as you discovered, where people are leading the strategy of the business, and you were quite interested in that space. Who are the people who most influenced your thinking about leadership and governance? Fascinating. And the reason you got a hesitation, there's one that stands out, but then beyond that, I've got to think more broadly. So, the one that stands out is my father. He taught me a lot about life, contentedness, leadership, unassuming dairy farmer, community leader. But he was influential in his own right in relation to being the patriarch in the family, but also in terms of community leadership and with the dairy company, those board leadership roles. So, I learned a lot then. But we never called it governance, because that word only came out about 25 years ago. Before that, we just called it directorship. Other influential leaders have tended to be people that I looked up to within the businesses I worked on. So, one is now the mayor of Thames. His name is Peter Revell. Another one is a much more famous person globally called Eric Schmidt – Dr Eric Schmidt. So, he was CEO [Chief Executive Officer] of Novell when I was there, and I had the real honour to meet him a couple of times. Wonderful man – big brain, strategic mindset, engineer. Right now, you did your PhD [Doctor of Philosophy], of course, in governance. Yeah. How far were you through your governance career before you did your PhD? Did you start with the PhD and then got into governance, or did you have some board experience before you did the PhD? The latter. So, first sort of board seats

were community roles: 5:31

church, school, other. And I realised that there was way more to learn. As a population of directors, we knew far less than what we thought we knew. And this connection between what we did in boardrooms, and then what happened in terms of the performance of the organisation – we didn't understand that linkage. So, that's what I wanted to get, not to the bottom of, but to really advance through. So, it was in 2012 that I started that. So, I was 10 years in. Okay. And I did it concurrently with a couple of board seats, but slowed down the advisory and other work to make space for that study programme over about four years. Okay. Right. What misconceptions did you have about governance before you joined your first board? That it was easy. That we voted on everything. That boards of big businesses were generally lazy. There's some reasonably good starting points, isn't it. Provocative, but. Yeah. Right. And some of those misconceptions were over time or fairly quickly contradicted? Oh, look, some of them have gone away, and some of them are very much nuanced now. Yes. So, most directors are absolutely well-meaning. Some directors – and we're just talking a portion – are relatively lazy. They'll turn up at board meetings. They'll back themselves to have quickly read the papers the day before and work through. Some people might say that's a little bit cynical, but I've seen it. You can generally tell by the types of questions they ask or the low engagement they offer in the meetings. Right. For example. Yes, yeah. And you've, in one of our first conversations actually, you talked to us about your approach to preparing for board meetings. You read the board papers thrice, I recall. First time through quickly, second time through going through and making detailed notes, and then a third time through to cement your thinking and questions and so forth. Yeah, yeah. That's well, that's how I do it. I hear about directors that are using AI-assisted stuff now, which is fine. I tend to be the more traditional way. Yeah. And I don't know which is better. Sorry, I interrupted. No, no. It seems from the conversations that I've had so far – and I think there was a recent paper actually from the judiciary in Australia talking about the use of AI for directors. I haven't come across the paper or read it, someone just mentioned it to me – that you are expected to know the content of the board papers, and you can't rely on AI. Which we'd expect, right. You know, AI is a really good tool to be able to go through and query it and try and draw connections and find out what you've missed, but it's not a substitute for reading the papers. No, it's not. And it's particularly no substitute for judgment, reasoning, intuition, and ultimately decision-making. Because AI, in terms of let's just say computer machine learning – so let's just take the phrase away – it's really good at repeatability. It's really good at patterns, and it's really good at finding links in seemingly disparate data. Yes. So, stuff that humans are less good at, it can do that grunt work for us. But then we still need to bring it together, put it in today's context, ask the why question, and then project forward. Yes. And that's where maturity and wisdom becomes a considerable aid to our contribution in boardrooms. Yeah. Now, just coming back to the topic of your journey, you've of course done your PhD and started in 2012. Yeah. Did you do other governance training before that, or have you done other governance training since? Yes. Can you tell us? You asked two questions, and yes to both of them? Yeah, okay. So, Institute of Directors – I've not done the five-day course, but I helped write the second generation of content of that course. I'm very familiar with that course. I've studied at Wharton Business School, University of Pennsylvania, and done a number of other programmes around the world to really try and enhance my understanding of what governance is, the role of the board, and how governance should be practised, or could be practised, given its situation when you've got social interactions with people. Yeah. So, I've done a number of studies beforehand, and I've continued in my learning journey since. Right. Right now, you sit on a few boards now, but you also consult to many boards around the world. Yeah. How long did it take you to build this full-time portfolio when you first decided to go into this portfolio role? And a separate question, particularly in your case, I would be a little bit broader than your own current portfolio given the other work that you do. How many boards is full-time, would you say? Oh, full-time's easy. So, if you – let's start there and work backwards. Yeah. Shall we do that? Absolutely. So, in terms of full-time, when I'm asked that question, if they're substantive companies, substantive boards, and all of those constructs we normally expect to see in a board – four. Right. So, one week per board per month. And by, listed companies or a listed level of complexity, so large privates, right. Yes. State-owned enterprises, four. For me, the answer today is one group. So, there's a holding company, two subsidiaries, and one of those has got a 50% shareholding in another subsidiary. So, there's four in that group.

But it's governed as two board meetings: 11:44

one with the wholly-owned subs and parent, and then one on the 50% where we have a different meeting cycle. And that's it, simply because the advisory work is also that balance. And as you've heard, I subscribe to the view that you've got to do the job well, and so I can't take on a full-time, if you want to call it that, set of board seats and serve those well, if I'm also doing the other stuff. No. And vice-versa. So, when you first decided to go portfolio, how long did it take to kind of establish this as a full time, fill up the diary. Full-time? So, the first thing is we went cold turkey, so I resigned from paid work. And then I went to work, which was 10 seconds down the hallway at home on the Monday. And so, it was literally that cold turkey. Initially, it was advisory and community volunteer sort of boards. But building that up was a five-to-eight-year journey. Okay. Yeah, that's a really interesting number to get your head around for somebody who at some stage may want to become a full-time director. Giving up an executive salary, you've got to know that it's going to take you some time to build that up. Well, yeah. And many people get lucky, or maybe it's not luck, just much more fortunate than me. I was quite cautious as to what I took on. I wasn't looking for listed boards. I've been approached a couple of times, but I've disqualified myself simply because the structures, and the requirements, and the culture in a listed board service, for me, is more constraining. I'm more interested in privates, family, export-oriented, aspirational, which doesn't include the big ones, but it doesn't have that Stock Exchange listed sort of scrutiny. And that's just part of the decision process that I went through. But when people ask me today, "Have you got any advice for them?"– because this journey for me is five to eight years, right. But for others it could be five to eight weeks, and for others it could be never. I encourage people to breathe. Slow down. Because you can't go from knowing nothing to being an effective full-time director of a portfolio of three, four, five, six boards in a week – maybe not a month. You've got to build that knowledge over time. You've got be, and draw on your pre-wisdom from that. And I encourage people to think of it as a quest or a journey. Yes. Yeah. No, that makes perfect sense. Could you tell us about your first board appointment? First volunteer one, first paid one? Whichever. Let's go from the beginning. Yes. Right, so at the beginning, it was a local church board. Looking back now, you'd say, "But it was a treasurer's job." Yes, I had the job of going from the 14-column ledger book to the computer. But it was also group decision-making, so to say it was a board is technically accurate. But to say that we had the building blocks of governance is probably a bit of a generous sort of statement. But it gave me a whole lot of baseline understanding in terms of negotiation in the boardroom, decision-making – having influenced or been influenced. That the collective decision is what holds, and we commit to that collective responsibility and to take that decision, not seek to relitigate. So, some of those principles that are core to us in board roles, those formations were there in 1998, 1999 when I was getting those first things. I don't think that's uncommon even these days in some, particularly not-for-profits, to really not have their foundations of governance. So, it is the president, the secretary, the treasurer, and a couple of reps [respresentatives]. Yes. Yeah. And with that, we need to be really cautious that we don't take a big company's inappropriately formal style and put it into a small not-for-profit, because it just doesn't work – nor vice versa. Yes. So, one of the early challenges I found, I know others find, and I discuss it openly when I'm doing curated programs – is best fit, or fit for purpose. It is critical to discover where and how that sits so that you can get the right level of intervention, or a right enough level of intervention, to get the job done. Yes. Yes. Those early experiences, what did you find most challenging as a new director? You don't touch anything. That was easy, wasn't it. It was. When you, in executive roles and in working roles, you've got jobs to do, tasks to do, projects to run to deliver whatever, it's on you. You are using your brain, your hands, your physical, your mental strength to get the job done. In a board situation, you're doing all of that and ultimately making a decision, and then you're giving it to somebody else to do. And when you've had a career of doing things, and getting things done, and watching them take a while – or being done in an odd sort of way(that might have been more a reflection of me, because it was just different from how I would have done it) – those are the sort of challenges. Learning to become comfortable with the rhythm, not only of the board cycle, but also of the running the business cycle, or running the enterprise cycle, was something that just took a little bit of a while to - Yes, yeah. - get in my head. Right. When you started out as a director, and at that stage you hadn't had the extensive governance training, what mistakes did you make early in your career? Lots. I did not appreciate the value of preparation. It's easy to do a baseload of preparation, and I did that. But I didn't realise the nuances, and that additional preparation could really elevate the quality of the decision, and the quality of the discussion before the decision. And so, the mistake was I probably, my touch early, was too light. That's not to say I was trying to run the business, but understanding was something that you need to invest in. Yes. And so I was too light on that early. I think the other one is I misunderstood or underestimated time. Because the board makes a big decision. Because managers make the everyday decisions. Yes. And there's complexity. And there might be competitive forces or compliance forces or other, that stand between our decision and whatever happens as a result of that decision. And so, for somebody who's enjoyed a career of making things happen, getting things done at a reasonably high gait, and then just getting to synchronise around those rhythms – the mistake I made was I was probably too hard on myself and others in terms of speeding up. Today, we call that a virtue, and we give it a name; it's called agility. But because there's no one right way. No. And it's just synchronising that up. Okay. So there's two. Yeah, right. If you could go back to your first board role, is there anything you'd do differently? Yes. I talked about preparation, so there is a bit of a theme on that one. I'd prepare better. I would, now, with the benefit of hindsight, I would make sure my management and operational type questions were addressed before the meeting, because they've got nothing to do with the meeting. And so that distinction – And so I've read the papers, we've got a question about X, I'd ask the chief, and make that inquiry beforehand so we're not bogging down the meeting with what's, in effect, in the scheme of things, a triviality. Okay. What advice do you wish someone had given you before your first board meeting? You know how I talked about breathe? That. Just take your time. We live in a fast-paced world; things are changing quickly, so they say. But last time I looked out the window this morning when I was getting up in the hotel room, the sun was there – or wasn't there yet, because I was up before the sun. But there's a whole lot of stuff in this that's remarkably similar to what it was 5, 10, 15 years ago. But as we come through as young people, we try and make a difference because we think the old ones don't understand. I'm now one of the old ones! So, we need to learn to slow down. There's advice around that and a big insight around that. That's not to say inappropriately slow or bureaucratic. I just want to make that distinction. Right. Just taking your time to consider and make decisions well. And don't assume you know everything. We know less than we think we do. Yes. Collectively, we know less than we think we do before the conversation. Once we've had the conversation, so long as we are prepared to hold things lightly, we should get to a better decision, so long as we've indexed it to strategy or what we're trying to do as a company. And that in itself is a point of contention in many boards, because they simply don't know collectively, and have not agreed collectively, where they're trying to take the organisation. Right. Loose ends all overy the place, eh.

A related question: 22:45

what has been the most important governance lesson you've learned over your career? I'm going to answer a slightly different question because it links in with what I think you're asking with governance lesson. The value of a really, really good mentor. Okay. In my case, two. It's easy to read books, it's easy to believe that "best practice" is best. But to have somebody who's walked this path before you and is prepared to say, "Peter, that's fine, but have you thought about...?" Yes. It's that mentoring sort of role – that guide, that longer range set of headlights that we, that rightly understood, that we're there to provide for the business. The role of, the mentor and the lesson, is really around taking a longer view, and learning about the superpowers that boards have. Those being how to ask great questions. Because questions are that, the role of the question is to expose stuff that we can't see, before we ask the question, right. And also that seeing around corners, or as some people say, seeing beyond the horizon. Because if our job is take the business into the future – and I think that's right – we need to pick up still weak signals, because management is trying to pursue strategy and run the business. They're not looking a long way in front. So, we can add value in that regard. And so the mentor relationships that I had and continue to have helped me in that regard. No end. You've got one mentor in the UK [United Kingdom] and the other one here, is that right? You've got a good memory – Bob and James, yeah. What's the biggest myth about governance? That there is a single best way of doing things. That best practice is always best. Boards are social enterprise. If there were no men and women in the board meeting, it would be easy, but then we wouldn't have a board. And so, the myth being that if we achieve best practice, we've got it sorted. The only problem is when we come back next month or next quarter and have another board meeting, the world has changed. Yes. We've had 30 or 60 sunrises or 90 sunrises in between times. The weather's changed, the competitor's changed, the market's evolved, the Strait of Hormuz is open or closed today – all of that sort of thing. And maybe somebody cut me off in the car while I was driving to the meeting. All of those factors, social and environmental, play in on my mind and how I contribute on a board. So, to hold that there's one best way, I think, is a crock. But understand principles, and applying them given that situation – that's where the rubber meets the road. What do you know now that you wish you'd known at the start of your journey? I learned it pretty quick. We don't know it all coming in. Collectively, we don't know it all, and we've got to ask questions. The board meeting, at best, is a conversation. That receiving presentations, my tolerance for managers presenting to the board in a stream of slide decks, and my tolerance for that now is zero. The assumption that I would ask, and particularly if I'm chairing, I make explicit, is the papers are read, the slide decks are read, so we don't want to talk about that. What I want to talk about is the implications of what you've written, and use that as the launchpad for the conversation. That's the key insight that I learned relatively early, reinforced through the doctoral and other work, and then continue to take it forward, and where I can, share it with others, as well. Yeah, the board meeting is not a place for reporting. It's a place for discussing and solving problems. And ultimately making decisions. Making decisions. Big strategic decisions. And at the end of the day, every decision you make is going to come up with a "Yes, we agree," "No, we disagree," or "Wait," because we're lacking information or we're not ready to make the decision, so we kick the can down the road a little bit. Yes. That's it. Yeah. It sounds remarkably easy, eh. It does. I've got one final question for you related to this topic. Sure. What skills will future boards need that today's boards may not have? At a high level, exactly the same. And that's going to be contentious because we're busy talking about cyber and climate, and AI [artificial intelligence]. They're technicalities, I hold, and they present for us specific risks or specific opportunities which boards have been facing for hundreds of years. Yes. So, I hold that's the same; it's just different risks, different opportunities today compared to 25 years ago, compared to 50, 100, 150 years ago. Yes. Okay. At a high level, we still need to receive and make sense of information, work with the management team, make decisions, hold accountable, management to account having set the direction and ensured we've got the right capability. Right. So, all of that's remarkably the same. The skills that I think we need to continue to develop – not new, but continue to develop – is how do we do that well, given we've got a changing environment with cyber, and climate, and AI, for example? So, making sure that we've got that, I talk about innate curiosity. We've got to have that inquiring mind. Many directors, when I serve with them, stagger me at how well and how advanced their thinking is, and their curiosity has taken them, and the value that brings when they make comments in the boardroom. And I aspire to that. And I think that at a population level, we can and should continue to build the type of capability. We just need to be better at learning how to work in a social group, because ultimately that's what it is. So, there's a big behaviour piece in there that we need to continue to develop. Great, Peter. That's been really cool. Thank you so much for your time. No problem. I'll look forward to our next conversation. And we'll see you next episode. 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.