Australian listed ICT companies are enormously diverse in nature and their boards of directors must operate in ways suited to an individual company's shareholder base and the scale and nature of its business, as well as the particular circumstances it faces.
For a company to thrive and provide shareholder returns, the breadth and depth of the "leadership bench" must be decisive. As the company's strategy evolves to meet the changing market opportunities, demands on the leadership also change. The right skills to grow the company might not be the right ones for competing in a more mature market.
And to be effective the board itself needs a process of renewal and upgrading of its capabilities in the same way as CEOs must develop their management teams.
Many company directors are full-time executives or sit on the boards of multiple companies. Busy directors often find they do not have time to keep up with the workings of the business and to fully digest the information they are confronted with in their board papers, much less have the time to learn more about the broader industry trends that will determine the future of the company.
In small companies the board job is an entirely different animal to that in a mature company. Small companies are hungry for directors who can help them build their businesses before the opportunity and funding dries up. The competitive situation can change more rapidly and there are enormous challenges in getting the right strategies in place. Smaller companies also expect their corporate stewards to earn their fees.
So what should these companies look for in a director? Motivation, energy, and the passion to make the company succeed in today's hypercompetitive marketplace. It's not a time for companies to go for the so-called "business celebrities" who probably won't be able to spend much time with the company anyway. The minor role in the smaller companies is the board meetings themselves; it's what happens between meetings that really pays off. The better boards evaluate themselves regularly in a hard-nosed fashion. The worst are asleep at the wheel, ineffective and weak, although today they have difficulty hiding from shareholders, the media, and prospective investors.
There is always value in developing relationships with people outside the company who can both identify those issues critical to the company's success and assist in focusing decision-making on these issues. It is important that there be an acceptance of responsibility as part of the relationship. Leadership is required that is both bold and imaginative and it is important that everybody is on board and showing it.