Bradley Shearer speaks to three non-executive directors about their advice for aspiring NEDs, what motivates them, and the journeys that led them to their roles
To showcase the variety of roles that actuaries perform as part of our multi-decade careers, this series of features shares stories of independent non-executive directors (NEDs). If you’re performing, or aspiring to, such a role, please consider joining the NED Member Interest Group (MIG) (bit.ly/2DmoiC2), including its LinkedIn presence, to access professional support.
NEDs’ main role is to guide their organisations in a statutory capacity. Seamus Creedon, NED MIG chair, wrote in The Actuary’s August 2019 edition (bit.ly/2GnthUc ) that “corporate governance is the toughest of team sports” and explains that “good NEDs will use their skills and experience to aid the collective understanding of the whole board. A good board will be diverse in terms of the backgrounds, experiences and genders of its members.”
We trust that the experiences and reflections in the NEDs’ vignettes will inspire you to reflect on your own careers and aspirations.
Pensions/retirement and securities brokerage
Tony Lally’s executive career covered financial services disciplines such as superannuation, investment management, insurance and financial planning. Starting his career in Ireland, he has also worked in Japan and Australia, where he now lives. His last full-time role was as CEO of Sunsuper, one of the world’s largest superannuation funds. Before that, he established Deloitte’s actuarial consulting practice in Japan, headed up Retail Fund Management across Asia-Pacific for Deutsche Asset Management, and spent a decade at Commonwealth Bank managing a fund company and life company and spearheading its entry into superannuation. That decade was instrumental in his career, and allowed him to work with and learn from some phenomenal executives, he says.
While at Sunsuper, he fulfilled roles for the Association of Superfunds of Australia, an industry body, including as chair. He was also a NED at the International Centre for Pension Management, a network of pension funds. Both required strong collaboration and consensus-building skills.
Tony found getting NED roles after his CEO role more difficult than he had expected. Reflecting back, he recommends making contacts while still in your executive career – invest time in building credibility and relationships for your desired future. While he has engaged with headhunters, his NED roles arose through connections who referred him to people who were looking. Talk to existing directors and chairs, he says, as “chemistry around a board table is critical. Trust and knowing the person play a huge part.”
Today Tony chairs Self Wealth Ltd and Equity Trustees Superannuation Limited, describing himself as a “professional company director” and coordinating the bigger picture. He’s found directorships a good extension of his industry experience and knowledge, and has enjoyed mentoring CEOs through his boardroom roles. It’s important to use all your knowledge and training and pass on guidance to others. Actuarial training teaches us about risk management: what could go wrong (and how) and what we’d need to do. This, combined with our strategic analysis skill, makes actuaries invaluable on boards, for our numeracy skills or looking across the whole business.
For Tony, success is seeing your senior executives developing, growing, learning and becoming the executives you envisage. One of the most difficult challenges, though, is removing a CEO who lacks the abilities that the business needs for its future. Overall, Tony highlights that being a NED is a very fulfilling and rewarding career.
- Don’t limit yourself – opportunities will come from directions you’re not looking in
- If you don’t trust the board or management team, don’t join the board
- A preparatory course (such as that of the Australian Institute of Company Directors) helps you to understand the country laws the company operates within, and also how to add value
- Don’t commit to too many NED roles – be sure you can really dedicate the time, recognising that chair roles are more time consuming.
Currently based in the US, Hazel McNeilage has lived and worked on five continents. Her executive career spanned insurance, pensions, investment consulting and investment management, and included senior management roles at Towers Perrin (now Willis Towers Watson), Principal Global Investors and Northern Trust Asset Management. Hazel also served as a company appointee on several boards. She joined the (US) National Association of Corporate Directors and achieved its Board Leadership Fellow designation, which she found very useful as it provided great insights into independent NED roles.
During the final years of her executive career, Hazel developed relationships that would allow her to explore NED opportunities. Her first independent role is with NYSE-listed Reinsurance Group of America (RGA) – she was approached by a recruitment firm because her skills and experience were a good match. For her second role, with non-profit Scholarship America, her name was put forward by an existing board member she’d worked with during her executive career. With a long-standing interest in governance, she relishes the opportunity to step back from the day-to-day and provide strategic guidance and oversight, as well as to keep learning and developing. The flexibility also appeals: she aims to combine serving on three or four boards with other activities, such as community work. Hazel is actively building her NED portfolio and is open to additional corporate board roles.
Preparation for board and committee meetings “is an intensive process involving many hours of careful review of board papers”. Other ad hoc activities can include participating in senior executive forums at management’s invitation or attending the company’s Investor Day. “It is important to understand the organisation from the outside as well as the inside,” she says. To ensure this, she attends seminars and webinars, and reads industry reports to understand what is happening within the organisation’s ecosystem and stay up to date with overarching governance trends. Examples of her professional development include a 2019 Carnegie Mellon certificate in cybersecurity oversight and a 2020 Harvard cybersecurity programme.
At RGA, Hazel is on the Nominating and Governance Committee (with a lead role in director professional development), the Compensation Committee and the Cyber and Technology Subgroup (which is less formal and focuses on cybersecurity and data protection). Considering the actuarial qualification, she feels actuaries’ skills can be applied to any board, particularly with respect to finance, risk and audit.
- Understand and respect the difference between governance and management, and don’t stray into issues that are management’s responsibility
- Ongoing professional development is key, as all NEDs need to be able to contribute to board deliberations across the full gamut of topics
- Due diligence prior to accepting a board appointment is critical, and being a NED of a well-run company with a high-performing board can be an extremely rewarding experience.
General, life and health composite, and parastatal insurer
Lusani Mulaudzi is president of the Actuarial Society of South Africa, a role he sees as part of his portfolio career, which also includes paid NED roles, serving on non-profit boards, and consulting. His earlier career focused on healthcare: he was a consultant to medical schemes and then CEO of a struggling administrator that he tried to turn around. He gained insight into reporting to a board, preparing board packs and getting input from directors on a company’s direction. In 2018, he was headhunted to join the board of Constantia Insurance, a composite insurer, and now chairs its Risk Committee.
More recently he joined the board of the Road Accident Fund, a parastatal insurer that provides liability cover to vehicle drivers in South Africa. He chairs its Risk, Governance and Actuarial Committee. Other roles include chairmanship of an NGO and serving on the licensing committee for private health facilities. Lusani is also involved with the International Actuarial Association and strongly encourages volunteering, explaining that roles on professional subcommittees are great preparation as they hone the skills that allow you to serve on boards.
Lusani’s NED motivations include his interest in governance, his love for interacting with others, his desire to be exposed to different companies and how they operate, and the way NED roles fit his lifestyle and interests. He enjoys figuring out what the issues are and sifting through the information to get to their core. Listening and making decisions, including convincing others of your perspective, are also pleasurable. He recalls impressive executives who “really know how to do their work, lead their business units and present, and are transparent – how an executive should be”.
One of Lusani’s strengths, he feels, is dealing with instability – he’s able to help organisations move out of those situations. But, he cautions, that can also be the biggest risk of NED roles: you’re not able to influence everything, and if the company goes bust it can affect your reputation. You can also be found to be in the wrong by regulators, so there is a degree of personal risk. Related to this, he says that understanding the professional indemnity insurance in place is important.
Lusani is a strong believer in professional development: “Know what kind of person you are and where you should position yourself. Find your place where you can blossom and be your best.”
- Add value when in meetings – be prepared and know what you should be asking
- Asking questions is your biggest tool. Be able to determine which are good or bad answers. Take opportunities to sharpen your skills, such as conferences and seminars.
- Stretch out of your comfort zone and meet new people.
A rewarding role
We conclude by pointing to some similarities in the reflections and suggestions given. Asking questions is a significant tool, and your ability to pass on guidance is highlighted. Professional development is also crucial if NEDS are to contribute meaningfully. While it’s necessary to recognise the risks and perform due diligence, NED roles can be personally fulfilling and rewarding career options.
Bradley Shearer is executive director of Protagion Active Career Management, actuary and CFA charterholder