The pathway to leadership is service

For director Caren Rangi ONZM MInstD, succession planning isn’t just about having someone lined up to take your place but building a network of talented board members within your organisation and the broader community.

Rangi, who is on the Institute of Directors’ (IoD) Pacific Advisory Group, was appointed an Officer of the New Zealand Order of Merit in 2018 for her services to the Pasifika community and governance. As well as her own career in governance, she has also dedicated significant time and energy to building the next generation of Pasifika directors.

Speaking at the IoD Leadership Conference in May, Rangi highlighted the need for boards to have a long-term approach. “Think about succession when thinking about success,” she said. “What is the optimal combination to get to success – what’s our collective identity as a board.”

She said it is important for boards to look beyond a set of skills, and to consider interpersonal skills such as relationship building. “You need the right technical skills, but you also need to feed the relationships.”

Diversity is well-recognised as a key element of a successful board. Diversity of skills and thinking – culminated from several dimensions, including age, gender and ethnicity – are needed to help tackle the increasingly complex governance challenges boards are facing.

Research shows many benefits of diversity, well beyond equity. These include enhanced decision-making, attracting talent, increased innovation, reducing “groupthink”, more effective risk practices and challenging debate, and strengthened reputation. According to international research from McKinsey, cultural diversity is more than just a societal issue, it is also a robust commercial multiplier. 

Rangi emphasised the role of the chair in encouraging diversity and helping to create an inclusive atmosphere. The culture of the board is a critical element of success, and the chair needs to play an active role in checking on the board “temperature” and managing the dynamics and relationships within the board. “You can’t leave relationship building to chance.” 

The LEAD Centre for not-for-profit governance released a report last year, ‘O le ala i le pule o le tautua (the pathway to leadership is service)’, which arose out of a concern about the lack of Pasifika representation on boards. It notes that Pasifika people have historically low representation on boards in the private and public sectors, other than on Pacific-specific organisations, and that they face barriers to entry, including stereotypes, discrimination, gatekeeping and recruitment processes.

With New Zealand’s changing demographics – according to Stats NZ, ethnic minorities will be around 50 per cent of the population in 20 years – directors need to consider how their boards are reflective of the communities and people of Aotearoa. 

Distinguished Professor Emeritus Paul Spoonley says this change in demographics will impact on our customers, suppliers and workforce, but it also needs to be reflected in senior management and on boards. “You need to identify, train and provide the experience for potential candidates. That’s not a short game; it’s a long game.”

While inroads have been made with regards to gender diversity, encouraging ethnic diversity on boards also needs to be a key part of succession planning. Boards can tend to replace ‘like for like’, but boards need to be thinking longer term about what skills and thinking is required around the boardroom, and to support a pipeline of future directors.

Board considerations:

• • Boards need to be proactive in their approaches to increasing board diversity and consider their recruitment policies and search strategies
  • Engage with future director, board observer or other programmes that support meaningful action towards bringing diverse voices into your boardroom
  • Consider your skills matrix and think longer term about the needs of the board, your organisation and stakeholders
  • Consider the cultural awareness of your directors and the board culture and look to upskill and enhance cultural literacy around the table
  • Encourage diversity throughout the organisation – particularly middle and senior management – to help create a governance pipeline

Find out about the IoD’s Tautua Pasifika Mentoring Programme.