Christopher Wright

Louise Broekman:  Welcome to the Advisor Insights interviews. I’m here with Christopher Wright to talk all things corporatised advisory boards. Welcome Christopher.

Christopher Wright: Hi, Louise. Good to be here.

Louise Broekman:  Great, and this conversation’s really important. So before we dive into all things corporatised advisory boards, can you perhaps share some of your international experience in your background?

Christopher Wright: I have a very rich and interesting background. I’ve just arrived back in Australia after 17 years in Asia and Europe. During that time I ran a couple of large subsidiary companies in China, and for the last 10 years I’ve been leading the ethics, risk and compliance programs for two global multinationals working in 70 odd countries around the world. I’m very pleased to be back and I’m set up a small consultancy and advisory here in that geopolitical and integrity risk space.

Louise Broekman:  That’s great. Christopher, corporatised advisory board usage is on the rise worldwide, but you’ve had a lot of experience over a period of time around corporatised advisory boards. Do you mind just sharing some of that experience with us?

Christopher Wright: Sure. My first entry into working with corporatised advisory boards was back in 2001. I was the marketing director of a large defence contracting firm, and I had a board which comprised senior military offices that had retired and would meet on a regular basis to provide me and my team with insights as to what was happening in the customer environment. So within the military services within the Department of Defence. So it was really a customer advisory board, and they were able to help us build insights that we could use in relation to our strategy and campaign programs that we had running, which of course was the core of our business.

They didn’t make decisions, they didn’t have a management role, they didn’t have a governance role. They worked purely advisory. It was about inputs to help me and my team make better decisions with regard to the campaigns that we were running.

In the last 10 years, I’ve had a different sort of advisory board that I’ve utilized and constructed to work with the audit committee of two different companies, and that was in the risk and compliance space. And in these two advisory boards, their focus was to pull together views on how risk and compliance process and requirements operated or actually impacted within the operations of the company across its various divisions. So they were made up from people across the business, and their brief was to look at how compliance and risk worked and come up with options and recommendations on which the audit committee could then base its deliberations to make decisions around the governance of these areas for the group companies.

Louise Broekman:  That’s a really interesting consultative approach, and that’s using a cross section of employees internally, Christopher, to inform the audit committee?

Christopher Wright: That’s correct. If you think about the two sorts of examples that I’ve given, one being a customer advisory board, which was comprised entirely of external advisors, all with experience working within that customer environment. And then the second one mostly, but not all internal, and I actually had two different types of boards over the course of that 10 years. One was hybrid in the sense that it was internal with a few external advisors included. And again, the role of the external advisors was to bring in that other layer, that outside of the box, outside of the organisation, considerations for us to include in our own thinking before we came up with recommendations for the audit committee. The second was entirely internal, and in one sense it was more strictly bounded and defined with the purpose of coming up with quite clear recommendations to the audit committee around policy and process for the implementation of risk and compliance controls in the group company.

Louise Broekman:  But they weren’t a decision-making model, they were actually providing that insight to the decision makers.

Christopher Wright: Absolutely. Because if you take the audit committee, particularly the audit committee has a very broad brief, it’s getting deeper in terms of the level of detail that they have to be across, across a broader range of issues. And it’s simply not possible, I don’t believe, for an audit committee to reach that level of depth without having the considered inputs of an expert layer, which is informed by the business around how these things impact can be implemented, can be done within the business, otherwise they’re really having to make decisions in the dark to some extent.

And so this committee, these advisory boards, these committees produced recommendations for the audit committee upon which they could base their decisions and in which there was a clear auditable link back to those deliberations so that in the event a regulator asked, why did you make that decision? They could say, well, we looked at these range of options and these considerations, and this is what came up to us that had been considered in depth and that’s why we went that way. So you might dispute it, but at least you could prove it.

Louise Broekman:  Correct. And this is where best practice is heading, isn’t it? We look at best practice frameworks as demonstrating a consultation process in the decision-making cycle within a governance system itself.

Christopher Wright: Yes. Because in the end, within the governance level, you are accountable to your shareholders, but you are also accountable under the law to comply with a whole range of different requirements that are levied against board directors. And in that sense, you need to be able to demonstrate that you have acquitted yourself with regard to your responsibilities, your duties as a director, and therefore you need to have some depth because on these issues, and you might be talking about how you are progressing sustainability in the organisation, how you are addressing AI within the organization or some other technical aspect, which a board cannot, by definition be across in depth in every issue. So how can it show that it has taken Duke care to ensure that it is deliberated on an informed way on these things without having this kind of a subterranean structure to inform it.

Louise Broekman:  This is where quality and best practice becomes really important in that quality engagement. I think also, Christopher, I’m interested in your take on this because in the landscape of governance in corporatised advisory boards, you have to be really careful about the relationship between the board, the executive external providers, what do you see works and what hasn’t worked and the things that needs to be really carefully considered in the construction of an advisory board structure.

Christopher Wright: The absolutely number one requirement is understanding and defining carefully with clarity, your purpose, why it is that you have this advisory board. It is got to be really, really clear and in that process, being clear around the boundaries. So it’s one thing to say it does not make decisions, but you really have to be quite firm and in making sure there’s no mission creep from what it is the advisory board is doing into that governance space. I mean, the biggest risk I think, for any advisory board in relation to corporate governance is the potential for an advisory board director to become a shadow director of the main board. And so being firm about clarity on the purpose of that board is crucial. Now that means thinking about it carefully, discussing it with lots of different people who are going to be impacted by this, getting it down on paper and testing it around the boundaries so that what are the levels of authority that it exists? Who is the advisory board accountable to? What are the expected outputs of that board?

Who needs to be on that board, the members, all of this, she will derive from the purpose of the board itself. And when you get to that member’s question, well, that’s when you’ll start to say, well, is it only internal? Is it only external? Is it a hybrid between these two? Those are things that you will answer when you look at what the purpose of the advisory board is, the beauty in the corporatized space is that you can get really effective cross business, cross-functional inputs into what can be a quite complex environment that really addresses the question, how is this going to impact our business? What do we have to do in our business to drive this forward? And that’s the outputs that you need to then push up in the way of options or recommendations.

Another thing I think that really helps with driving an effective interface between the advisory board and its client, whether that’s executive management or whether it’s a governance board, and that’s good old-fashioned scheduling, making sure and understanding that the calendar of the advisory board is dependent on the calendar of the client. The outputs of the advisory board become the inputs for executive management or for the audit committee or for the main board. Making sure that such a simple thing, making sure that scheduling is in place really increases the efficiency of moving through the items on the agenda and getting them before the client at the time that they need to be in place.

Louise Broekman:  It’s really interesting when we look at the evolution of best practice more and more and really seeing how these corporate advisory boards work, that golden triangle between the chair of the advisory board, the sponsor and the internal secretary, it functions really important. Not only what happens on the table, but what happens before and after.

Christopher Wright: Yeah, absolutely. And I’m glad you mentioned the before because obviously the framing of the purpose will be driven by the sponsor because they need the advisory board to be able to get these inputs for what it is they need to do. And I remember a very good example where one of the issues that arose for the audit committee was the construction of, or the whole approach to how the group company would deal with internal whistle blowing and speak up reporting. And in that context, they were looking at, well, do we just outsource this somehow and we give it to a law firm to look after? Do we do it in-house? We’ve had various types of internal investigations teams in the past that have worked with different levels of satisfaction. What do we do? And it was in that context that the advisory board that looked at risks and compliance and ethics was able to actually sit down and go through the mechanics of looking at what those different options were, assessing them vis-a-vis the reality of that group company, 70 countries around the world, 70,000 people, lots of languages and so forth.

And very quickly landed on, here are the three possibilities for one of a word. Here’s the advantages, here’s the disadvantages. This is the one that the advisory board thinks probably gets to the front of the pack. And then the audit committee was able to make a decision on that basis. And it’s a really simple illustration. An audit committee does not have the time or the bandwidth to go through and do all of that. And it’s not the sort of thing you just simply want to get your external law firm to give you a recommendation on because they don’t know. They don’t think about 70 different countries in this language and that language and this jurisdiction and this issue and the structure of your remote operating places and how to do all of that, that’s something that has to come out from within the business itself.

Louise Broekman:  It’s so practical when you think about it. But in that simplicity, it needs to be a strong foundation in, like you said, what’s included in it, what’s not included in these advisory structures. But it really shifts the relationships of an organisation informing itself, but then being informed by the market. But it shifts the silo thinking into creating these ecosystems inside organisations. I really love that. Can I just ask about best practice? So you’ve now, as a Certified Chair Christopher, been exposed to the best practice framework methodologies to establish and manage refresh advisory boards. What do you think how best practice really matters in this corporatised space for the future?

Christopher Wright: Well, it’s an interesting question, Louise, which of course is why you’ve asked me right up front. I would say, let’s put aside for a moment the question of best practice and why you might want to use it. And simply, I ask the question, why does doing your best matter? Because that’s a question that becomes a no-brainer for all of us. We go, well, of course we’re going to do our best because these are important issues that have an impact on the performance and the reputation of our company, and we’re not going to pursue this with half measures. So if you want to give it your best, then it’d be useful to know what the best is, what’s the yardstick, what’s the framework by which you can define what makes best in an advisory board setting. And that’s where the work that you’ve done on developing a best practices framework slots right in because a lot of the work is already done for you.

So if you are a sponsor in a corporate setting and you are thinking about what do I do to better address these issues that I have? I don’t have the time, I don’t have the expertise. I can’t have another seven people on the board or on the executive committee to cover all of this stuff, but I can have an advisory board how best to go about doing that. And that’s where turning to the ABF101 framework is a fantastic tool to help in that process. And I have no doubt that as corporatised advisory boards become more common, then the level of captured learnings that you will be able to incorporate into the updates to the best practice framework will simply multiply. And that’s going to make it so much easier to do this. Now, I have to say, when I first started working with advisory boards, there wasn’t anything out there. I mean, it was a blank piece of paper. And few mistakes are made along the way because you find that you can be inefficient very easily once you form committees. We all know how committees can become the graveyard of good ideas.

And so you really, you’ve got to think carefully about how you structure this and then how you manage them. And even sometimes ask that question, has this advisory board fulfilled its usefulness? Is it time to retire this and move on? And that again, I think is going to happen in the corporatised space as much as it happens in any other space. But I do think at the moment with things like sustainability and developments in tech where the level of expertise that is required and the potential impacts across the business can be quite high, then the need for an advisory board or the desirability of having an advisory board to better understand those impacts, to then therefore inform executive management or inform the governance board is just so obvious.

Louise Broekman:  And Christopher, in your area of expertise too, around geopolitical risk organisations managing global operations, it’s not straightforward and increasingly becoming complex. You can never take that part of the market for granted. One of the things that we’re seeing is in organisations, either multinationals or organisations doing business in international markets, having a CEO in market with us, an advisory board supporting that CEO in market, and then supporting that strategy because then they get that localisation. The governance board itself may not have that localised knowledge and experience.

Christopher Wright: And I think that particularly once you’ve gone offshore and you start to work in a different legal jurisdiction, a different cultural environment, a different economic environment in terms of the mix of suppliers and buyers, then you really have to go local. If you don’t go, then you’re going to shrivel on the vine fairly quickly. And that means, in terms of our discussion today, that you can do that through the employment of an advisory board rather than simply turning your whole management and governance structure local, which can have deleterious effects when it comes to control. This is one way of separating that question of what you need to know from how you control.

Louise Broekman:  And it’s a risk minimisation strategy too, where you’ve got not just one voice supporting the local executive team. You’ve got a few. So you create this intellectual honesty from people who really are within the market.

Christopher Wright: Yeah. True enough.

Louise Broekman:  Christopher, what are you looking forward to with the corporatised advisory boards and then now with the lens of best practice and being part of the Advisory Board community, how does that shift your thinking about the way that you do things?

Christopher Wright: Well, for me personally, I think it’s very exciting the prospect of the next few years, particularly working with the advisory board community, because I think we have a lot of expertise and insight locked up in individuals across this community that can really be deployed working with different companies and in different environments to assist in that process of building better advisory board structures, better linkages between insights and decision, and that the world is your oyster in this space. Because the level of complexity and the rate of change is such that I don’t really see an option to address all of this without following this through to its logical conclusion, which is having a much richer layer of advice that is tailored to the needs of the business that is pertinent to the challenge, whether it’s tech or sustainability or governance. And that delivers an auditable, creditable set of inputs that executive management and or governance can depend on, rely on and point to if the questions ever asked.

Louise Broekman:  It’s exciting times. Christopher, I’m very grateful that you’re part of the Advisory Board community and the Advisory Board Centre. Thank you so much for sharing your insights. I’d like to do this again in a little while down the track so that we can really compare how that’s really working and in the market over time. So thank you very much for being part of the Advisor Insights interviews, Christopher.

Christopher Wright: Absolute pleasure, Louise. Absolute pleasure.