Seven new non-executive directors, a new chair, new vision, new growth targets and new strategies for expansion mean 2019 is likely to be a year of flux and balancing acts for Stone & Chalk chief executive Alex Scandurra. He’s ready for it, he says, not least because new chair Leona Murphy GAICD is well versed in transformation strategy.
The pair has worked together since Murphy joined the board three years ago after she left her role of chief strategy officer at IAG. Scandurra says her elevation to the chair role feels like a natural progression, which realises the strategic direction the pair began to dream up during that time.
The not-for-profit fintech organisation’s constitution stipulates that all directors should be up for re-election every two to three years. Traditionally, the eight spots would be split between representatives of the startups that Stone & Chalk was supporting, and from its corporate partners. But the new vision required a significant effort to scale up the operation and it was decided unanimously to move to a more typical nominated board to get the necessary skills to ensure its best chance at scaling.
”What we are doing is creating a brains trust... We use the board as governance, but also as an extension of the team.” Alex Scandurra
Afterpay co-founder Anthony Eisen and Moula co-founder Aris Allegos are now on the board along with Debra Taylor and Caroline Trotman, the chief operating officers from OpenSparkz and WordFlow, respectively, plus Daisee CEO Richard Kimber. Corporate and venture perspectives come from IAG and Firemark Ventures managing general partner Ron Arnold, and ANZ Digital and Wealth CRO Kylie Rixon.
“From a governance perspective, because we’re resource-constrained, part of the selection process was you had to be willing to have involvement with teams outside of the board meetings,” says Scandurra. “So what we’re doing is creating a brains trust — a board where we can ask, ‘Who’s got great experience building entirely new digital real estate for the business?’ We use the board as governance, but also as an extension of the team.”
Stone & chalk Slate
$330m Capital raised
27 Corporate partners
142 Startups graduated
26 Companies exporting
21 Startups launches
Stone & Chalk differs from other incubators in its approach to funding.
The company takes no equity from the more than 90 startups the company has supported — which have raised more than $101 million in the market. It means the company can remain highly trusted and objective, and play a neutral role in supporting the startups and their 27 corporate partners because there’s no vested interest.
“The downside is that we can’t raise equity capital so we’re always reliant on support from government and corporates to remain financially viable,” says Scandurra. “That’s by far my biggest concern because if all of a sudden [markets] turn, and corporates decide they have to cut all sponsorship, that’s almost the end for us. So how do we protect ourselves from that risk?”
Scandurra and Murphy are putting that question top of the agenda for the first board deep dive this year, having already set the incubator’s 2022 goals: to help residents raise more than $500m; have them collectively turn over $500m annually; have 10 alumni valued at $100m-plus; and ensure residents and alumni are employing more than 2000 Australians. “The cherry on the cake is that one of those has actually made it to unicorn status,” notes Scandurra.
Murphy sees the offsite day as a perfect opportunity to have all seven new directors deepen their understanding of the early development of Stone & Chalk, and its new direction, from the outset.
“The other thing we’re doing is to use it as an opportunity to set the scene for the board dynamic and culture going forward,” she says. “We’re going to talk through values and behaviours, how we want to work together and how we want that to manifest itself in the boardroom.”
She says that discussion will come at the end of the day over dinner, when everyone’s more relaxed. Not because it’s the fun part, but because that “soft stuff”, as she describes it, “is the really hard stuff”.
Sitting in the chair
Murphy’s experience spans leading IAG’s recent transformation program, non-executive roles with RACQ, Liberty Financial and NZ Accident Compensation Commission as well as chair roles at Royal Brisbane and Women’s Hospital Foundation, and as co-chair of the board for the UNEP Finance Initiative for the Principles for Sustainable Insurance.
However, moving from director to chair of Stone & Chalk in November 2018 has required a mindset shift. “In general, I feel a heightened sense of responsibility, but in terms of how I think about issues, in a director role I’ll look at a situation and provide my views as part of the collective and then engage in debate about whatever it is,” she says.
“My focus as chair is less about my view, but ensuring we get all views and experiences heard. That doesn’t mean I don’t have a view, but that I spend less time being the first view.”
She sees her role as facilitator rather than advisor, and says not everyone on a board should play an advisory role. “An important part of being a good director is asking quality questions,” she explains. “If you’re constantly giving advice, you miss the opportunity to ask the powerful questions and it’s the powerful questions that get breakthrough, more than advice.”
”My focus as chair is actually less about my view, but ensuring we get all views and experiences heard... I spend less time being the first view.” Leona Murphy GAICD
During her executive career, Murphy spent time in boardrooms watching chairs such as James Strong AO FAICD and Brian Schwartz AM FAICD “artfully conduct” their roles.
“I would marvel at the way they orchestrated and facilitated outcomes and I learned a lot from watching and observing,” she says, adding that the men had very different styles. She says what makes Strong and Schwartz effective where others struggle is clarity; being clear about whatever is being discussed or what problem needs to be solved, then driving to decisions in such a way that there are no winners or losers.
Murphy’s clarity as chair of Stone & Chalk will be put to use to drive the focus on purpose, something she sees as a continuation of her work at IAG. “All the decisions we make, actions we take and customer experiences we create actually have to line up to this point,” she says. “It’s one of the most difficult things you’re ever going to try to do. And so it should be, in terms of how meaningful the outcomes could be.”
Whether it’s up to the executive or non-executive to ideate that purpose depends on the organisation, says Murphy, but for Stone & Chalk, the board’s reinvigorated vision and ambition to help support another Australian unicorn seems like a good start.