Simon McKeon AO FAICD, in conversation with Alan Kohler at a recent AICD Leaders’ Lunch, shared his views on innovation, boardroom diversity and the energy of millennials. He also finally broke his silence on why he recently stepped down as Chair of AMP.
On resigning as Chair of AMP
The reason, just for all of you, was we said private and changed circumstances. And read into that if you like the fact that I have a constant set of opportunities and things that come my way and don't come my way. And at that particular point in time I said, “No, I would rather do some other things, not this thing.”
That is important because for everyone in the room, I'm just like one of you, we get choices. And if there's only one thing that I say today that you remember, let's try very very hard to do the things we actually think we ought to be doing that actually give something back to us, that get the best out of us.
In this country we do struggle having the right approach to innovation. We don't have enough PhDs or properly qualified people on boards that can actually say, I've been there... Spending money not on bricks and mortar but on something else. To share their risk/return, their journeys, all this sort of stuff. We actually, compared to other boards in other parts of the world, we just have to acknowledge that we don't have enough of that competency on the board.
We are replete in this country with a terrific education system, churning out gifted, young, technically-oriented people all the time and I guess my main point is those people shouldn't be just fodder for startups. Startups are great, wonderful things, happening in parents' garages all around the country, all around the world. That's terrific. But actually that innovation mentality should be just as alive and well in big corporate Australia. Big corporate Australia has the client lists. It has the funding. It has all sorts of things that actually ought to mean that it gets more than its fair share of innovation. But too often we actually just find it too hard. We're too cautious.
The way I'd express it is we don't have enough experience in the senior management ranks and the boards who say, no, let's have a proper and good look at what the innovation possibilities are in our particular industry.
I think [quotas] demean the issue and they demean women. On the board of CSIRO for most of the time I was there we had a majority of females. At AMP we had more females on that board than any other top ASX-listed board. I don't like – and I know I've got many enemies in making this statement, and I apologise to those that see it differently – but I really think the best way to promote diversity, including gender but actually a lot lot more, is to focus on what we can gain by simply getting the best of the best whoever they are sitting around the table, as opposed to saying we'll have a certain number of this and a certain number of that.
I can't recall really the impact I had when I was a twenty-something on the world. I think it was a pretty pathetic impact if it was anything at all. But at Macquarie I choose to be surrounded by 28 year olds and I always have.
And all I'm saying is that at this point I get out of bed with a real spring in my step if I'm actually spending any time at Macquarie here. Because these people just tell me heaps. I mean sometimes I think they're wrong but the point is that they're a different breed... They're exciting. They're not perfect. But what I am saying is somehow whether it's our education system, whatever it is, we've bred at this point in time I actually think a very exciting human being, full of potential.
And I'm just not talking about the technical things at their disposal which they just take to like ducks to water. There's something more again. And all I'm saying is that it behoves business to take an extra minute or two and take a look at the extraordinary and increasingly wise resource that we have in our young people."
On getting out of the boardroom
As a chairman I subscribe to two things: firstly it is important without being silly about it to get the board out of the boardroom and into the places where things are happening and secondly for it not to be a royal tour... Obviously the CEO’s first thought is well we'll take it to a part of the organisation that’s just starring. And I say well that's all very interesting but I want to go somewhere else.
I want to go to where it's hard. I want to go to where the opportunity is but for some reason we’re not really exploiting it. I want to go to a place where we know the management isn't as good as it might be... Every now and then there's a need for boards to get a bit of dirt under the fingernail. Why? Because when we come back into the boardroom the discussion is simply more informed.
On corporate culture
Corporate culture is not an add-on. It's not something that you get to at the end of the day if you've got a spare five minutes... it is the bedrock of outperformance. And why do I say that, well it's interesting going back to the swimming team. That's where they started.
You know 2012 was a disaster in London, they would say because of an inappropriate team culture. And John Bertrand and the others went to work three or so years ago to ensure that the culture of that team was demonstrably better. Now they're only part way through a plan and they'll have a big review and perhaps they'll be better again in Tokyo.
But I have to say they are very pleased today a few days after the swimming finished because they would say as well as everyone trying harder and better diets and everything else that goes into sport, the culture itself played a tangible part in improved performance.
Simon McKeon AO FAICD, the 2011 Australian of the Year, has had a long and distinguished career in Australian business and philanthropy. A passionate supporter of charity, a champion sailor and an elite investment banker, McKeon has also held some of the most important director positions in Australian corporate and public life. McKeon currently serves as Chancellor of Monash University and is a former Chair of the CSIRO and director of World Vision Australia.
Simon McKeon AO FAICD will be giving the final keynote address at the 2017 Australian Governance Summit, focusing on the Summit’s theme: Directing in a complex environment.
Want to find out more about the Australian Governance Summit? View the 2017 program here.