BR: You took on a board position at World Vision Australia while still in the thick of a hectic executive career. Why should executives who are stretched for time look to join a not-for-profit board?
GS: It’s a great way to find some kind of balance. As a result of World Vision I’ve visited probably twelve countries that I would never put on my travel list, and I saw human beings in the context of their own struggle that I would never have seen in my corporate career.
Having seen it, I can tell you that it’s informed, in the deepest way, my understanding of the Australian healthcare system: its worth, the things that we must preserve, like access and affordability, and the importance of an egalitarian approach, rather than a distorted world where many are left out.
“We’re not always welcomed by those in power but we’re there to help the children and to make sure there’s a future for humanity in dark environments and fragile states.”
BR: What are the challenges for a board that sits in Australia working within a global organisation? How do you collaborate with the rest of the World Vision organisations around the world?
GS: World Vision Australia is celebrating its 50th year, this year, and the global partnership model is just over 60 years old. World Vision is very much a group of national partners who believe in the same mission. Some raise money. Some receive it to invest in the programs that impact thousands of lives.
Despite the broad diversity, they all have equal status around the World Vision international board. We have a common conviction, mission, equality of status, irrespective of whether you’re in Kenya receiving money or you’re in Australia fundraising. We all sign up to the same code of conduct, the same statement of belief and faith, and how our faith is expressed in caring for others. We talk about faith in head, heart, and hands.
And so we work in the most difficult contexts. We work in places where the regime is saying, “It’s okay for that family not to be fed today or those children not to get to school. Or those soldiers to run roughshod over those individuals because they’re not citizens of this state. They’re refugees.” We’re not always welcomed by those in power but we’re there to help the children and to make sure there’s a future for humanity in dark environments and fragile states. It is a privilege to serve such an organisation.
BR: As CEO you took two companies through very successful IPOs. Do you have any advice that you’d tell other executives or directors who are listing their company or are thinking about it?
GS: You wouldn’t IPO unless you had a strategy that was worth investing in. Your business strategy and story with its requirement for capital has to have competitive appeal to investors.
Sigma was a 100 year old pharmacist co-operative operating as a wholesaler that also became a significant manufacturer of medications in Melbourne. In that story was the desire to become much more relevant health care player in the bigger system rather than a narrow distributor. To do that they needed to raise capital because co-ops are capital constrained.
With Medibank, the IPO occurred several years after a business turnaround story. It was a distressed government business enterprise when I began the assignment, having reported a loss of $175m dollars. The first part of the story was getting the bottom line right and that took about three years. Then we were confronted with the conversation about what our purpose was. We didn’t have one.
“You wouldn’t IPO unless you had a strategy that was worth investing in.”
Following an extensive consultation with management, the board and employees, we resolved to focus our purpose on better health outcomes. At the time we were 3,000 people with only 20 health professionals. In the following three years we acquired three businesses with strong healthcare capability, Medibank three years later became 3500 people with 1,200 health professionals.
The government owned an insurance company and sold a health care company with a significant enterprise value uplift. The example demonstrates the importance of purpose and strategy alignment that makes for a clear and compelling story that’s linked to performance, and that investors can understand.
BR: Some of our leading directors recently have lamented a lack of innovation or entrepreneurial experience on our boards. Is that something that you’ve encountered as well?
GS: I could use a different set of labels, but they mean similar things. Innovation and entrepreneurialism is certainly some of the language of today, because there’s quite a lot of conversation, even our Prime Minister is talking it, and it’s important. But I would go back to a broader category. Whether we lead in governance or lead as management we need to be invested and experienced in change.
If you are doing board composition, you need challenging voices around the table asking: what are customers wanting in the future? How do we actually listen to our customers? Are we in tune with customers’ future needs and aspirations? We probably could be doing better on that front.