Why boards should be going abroad
It was a trip to Shanghai with the ANZ board in 2017 that gave Graeme Liebelt FAICD, Dulux and ANZ non-executive director and Amcor chair, a powerful sense of the impact of mobile technology and the rapidly changing consumer preferences at work in Australia's major trading partner.
Visiting ecommerce giants like Alibaba in nearby Hangzhou, and seeing the pervasiveness of mobile payment, showed Liebelt what a cashless, connected economy looks like. "Most enlightening was how young people live in Shanghai, absolutely no cash — transport, shopping, banking 100 per cent on mobile devices; the most connected people I have seen anywhere in the world."
"Visiting places where disruption is happening motivates you to move quicker and utilise contemporary best practice in consumer marketing and tech." Kyle Loads FAICD
The same realisation hit members of the NRMA board when they visited Shanghai and Shenzhen, China's "Silicon Valley". Former NRMA chair Kyle Loades FAICD says, "It was mind-blowing to see the capacity they have and the speed of the technology. There's no doubt that visiting these places where disruption is happening motivates you to move quicker and utilise contemporary best practice in consumer marketing and tech."
More boards are finding that immersion in the dynamic technology ecosystems of countries such as China, the US and Israel is an invaluable way to fast-track digital and tech knowledge for boards, galvanise strategic plans and underline the cultural change needed to encourage innovation.
Christine McLoughlin FAICD, whose boards include Nib Holdings and Suncorp, has visited Amazon and the Boeing factory in Washington State, IBM and its Watson Data Platform on the East Coast, and Tesla in California. She says the trips have been transformative when the board takes on strategic challenges, specifically around what is possible in big data, cognitive computing, AI, automation and robotics.
Penny Winn MAICD, who has travelled with the Caltex board to the US and Israel, says: "In both locations, we picked up some great wins for fast implementation into the business. More importantly, we also established longer-term relationships that will generate future benefits."
The Chinese connection
China has become an important destination for directors. The mass adoption of mobile payments and the dominance of platform technologies gives boards a vision of how connected economies can operate. Its various regions also offer insight into the growing middle class — important customers for Australian products like food, tourism and health.
"When you visit China, you realise the relevance of the country to the global economy; its economic power that will not be distracted and the incredible impact it has on global growth," says Melbourne-based Michael Wachtel, who went to China often throughout his executive career with EY (Ernst & Young).
Jingmin Qian FAICD, a director of the Australia China Business Council and Abacus Property Group, says no-one working in the digital space or consumer products can afford to ignore China. The Beijing-born Qian believes infrastructure and health boards will also be adding China to their travel plans.
"If you are in the infrastructure space, there are many projects and partners throughout China working on the One Belt, One Road government initiative to improve logistics for import and export with other parts of the world."
Israel: the startup nation
With drawcards including technology, cybersecurity and a startup ecosystem that has seen more Israeli companies listed on the Nasdaq than in the whole of Europe, Israel has also become popular for boards.
The Australia Israel Chamber of Commerce runs multiple trade missions each year. Christine Holman GAICD, a director of building products company CSR, and media and entertainment firm HT&E (previously APN), joined a renewable energy, water and technology mission to Israel led by Macquarie CEO Nicholas Moore. Not only did the trip generate immediate contacts and ideas for CSR, it also brought an understanding of ways to tackle strategic issues around future energy generation.
"Australia has an innovation culture, but the difference in Israel is that it is so much across every aspect of their society that it creates a high intensity of new and emerging companies in a very concentrated geographical area," says Holman.
A personal interest in cybersecurity took Michael Wachtel MAICD on an Israeli mission led by ANZ chair David Gonski FAICD and Commonwealth Bank CEO Ian Narev in 2017. "Cyber is the single biggest global threat we face in the near term and, as the Internet of Things becomes ubiquitous, those threats will increase. Israel was the perfect place to see how companies are responding," says Wachtel, whose boards include the Future Fund.
The approach to innovation in Israel was more impressive than the US, according to Penny Winn. "The US felt like it was corporatising innovation, whereas agility and clever thinking was everywhere in Israel. The Israelis are more driven to innovate by local circumstances and there is an energy I haven't experienced anywhere else."
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