I always knew that when I retired from my day job, I wanted to be a company director. I never imagined how hard that would be – after all, if governance is at least in part about strategy, and I’d made a very good living shaping strategy for my many corporate and public sector clients, why would I not be highly desirable in the governance pool?
Well, it turns out that the drive for diversity in governance doesn’t actually extend to recognising the value of people who have started and grown their own businesses. In the traditional governance pool of potential, I am labelled by what I am not: not a corporate C-suite executive (past or present), not a partner (current or ex-) in a major law or accounting firm, not a high profile academic, not a has-been politician. (Note that I do not say “not a man”, because I remain convinced that my female-ness is not the actual barrier. It never has been – but that’s the topic of another rant yet to come.)
But undeterred by my obvious disadvantages – the things that I am not – I embarked on a concerted ‘networking’ effort. The director community was, I have to say, extremely generous in giving me advice and encouragement – but in reality, I am reminded of our exhortation to angel investors to just be honest with founders and say “no”, quickly and firmly.
Nevertheless, in the absence of a clear ‘not in a million years’ message, I persevered. Alongside building up my interests in young companies through mentoring and investment, I discovered that the easiest directorships to get are on those early stage company boards – positions of low prestige, massive challenge, and massive opportunity to ‘make a difference’.
This appealed to my values. In my business, in place of our company vision and values, there was a simple statement on the wall: “I am not just here to make a living. I am here to make a difference.” For me, helping entrepreneurial, high growth start ups succeed, is the one thing I can do to ensure that New Zealand does not become just another Pacific Island – a place where old people live, and young people visit to holiday or see their whanau. I’m here to make a difference.
And so it is that I have developed a bit of a following as ‘a font of knowledge’ – note, I do not say “the font of all knowledge” – on the topic of governance for start up companies in New Zealand.
With 8 ‘early stage governance’ workshops under my belt, attended by over 100 aspiring early stage directors, I guess I can lay claim to at least being in touch with the issues of governance for the early stage companies that I and my fellow “angel investors” support with what we like to call “smart money” – investment dollars that bring with them time and involvement to help the business grow faster, and spread further, and hopefully make us, and the founders, richer!
New Zealand is the ultimate ‘upstart’ nation: at the top (or close to the top) of the World Bank’s list of the easiest places to start a business, to do business. My fellow ‘angels’ and I invest in some 120 start-ups a year, and with the investment comes the requirement to establish a governance board, a board of directors to guide the company to the future.
This is where I have cut my governance teeth – in an environment where directors are donkey deep in the doing, where ‘noses in, fingers out’ has no meaning at all, where the primary concerns are ‘runway’ and ‘burn-rate’, and we, the directors, are standing shoulder to shoulder with the entrepreneur; believing, risking and literally sprinting from one milestone to the next.
The war stories are legendary, the battle scars raw… early stage boards are not for the faint-hearted. But as I observe the dialogues in the traditional governance community, I can’t help but reflect on the palpable lack of enterprise; the investment in the established status quo; and, honestly, the lack of support for what is, in effect, the ‘sub-culture’ of directors getting down and dirty to help grow NZ Inc.
While established companies generously offer internships to ‘future directors’; while the Institute of Directors offers ‘mentoring for diversity’; there is a large pool of governance talent cutting its teeth in the most challenging of environments, in companies that will ultimately make a real difference to New Zealand’s future. With minimal resources, minimal access to advice, little but their intelligence and native smarts to guide alarmingly frequent decisions based on limited information, these early stage company directors are making decisions that will ultimately shape our economic future. If we’re going to build another 10 Fonterras (and I truly hesitate to hold them up as an example of anything), start-up land is where that begins.
“What about the risk?”, I hear you ask. The reality is that risk management is not about minimising risk. It is about understanding the level of risk you’re willing to take to maximise your opportunities, and nowhere is that more clearly understood than in the startup sector.
Perhaps we on these start-up boards should be offering internships to more traditional, experienced directors, to experience the reality of governance life at the coalface of the future.
But meanwhile, how ironic is it that the easiest entree into governance is in companies which have the biggest challenges, the least resources, little or no access to professional advice, and the least ability to pay their directors what they are worth. Nevertheless, I and my fellow start-up directors persevere, not just to keep a beady eye on our investments, but to make a difference for these companies that we believe will ultimately make a difference to New Zealand.