Passion, innovation and the Kraken of Doom

The IoD’s 10th annual Leadership Conference got off to a passionate start, and not just inside the room. As directors prepared to dive deeply into major governance topics such as climate action and the impact of geopolitical instability, a small group of climate action supporters gathered outside the Cordis Auckland to encourage directors to focus on climate issues.

It was an interesting reflection on the intersection of governance and the concerned communities that organisations operate within and are part of – a nexus that various speakers would evoke during day one.

Former trade representative and MP Tim Groser was up first with a plea for realism around New Zealand’s board tables.

“We have to ask Miss and Mister Wishful Thinking to go and sit in the naughty room,” was how he colourfully put it.

Groser’s message, based on many years involved in international trade negotiations and diplomacy, was that the geopolitical instability – and hence economic uncertainty – we are seeing today is not going to be resolved quickly. Good governance requires boards to consider, understand and act after taking geopolitical megatrends into account.

Prepare for ongoing tension between our major trading partners China and the US, he said. Which will mean challenges to our importers, exporters and our diplomats caught between the two superpowers.

With the gradual decline of international consensus and international organisations, what can the UN Security Council actually do, he asked.

Streaming in from the US, business advisor and author Andrew Winston picked up the ball to argue that disturbances in the global economy represent an opportunity for boards who want to future-proof their organisations.

Winston is a champion of the idea that businesses can actually be “net positive”, that is they can deliver more for their stakeholders than they consume.

With a swathe of examples, ranging from reducing the deforestation that lies behind palm oil farming to reducing carbon impacts, he shone a light on businesses (and groups of businesses) that are adopting a governance model that actively seeks to find solutions to modern problems.

“Is the world a better place because your business is in it?” he asked the assembled directors to consider.

Given moves in regulation, customer expectations and trends in investor demand, among other things, he argued it makes good business sense to ensure the answer to that question is “yes”.

The next session had a surprise guest, who we’re not going to name because they regularly receive death threats. Possibly the first time a speaker at an IoD conference has felt safe only because their name was not on the programme.

What topic could stimulate such an aggressive response?

Disinformation, and the threat it poses to society, business and democracy itself.

A panel of directors and experts, hosted by former journalist Linda Clark MInstD, discussed disinformation and the rapidly widening impact it is having in Western democracies.

Disinformation is organised like an advertising campaign, well-funded by dark money and impacting industries as disparate as telecoms, agriculture and nursing. The panellists argued this undermines trust in business, politics and science, and has contributed to an erosion of social cohesion.

It also comes with the threat of violence. Clark noted that some female journalists will have security personnel with them on the election campaign trail this year due to the level of abuse and threats they receive.

Adelle Keely from Acumen said research shows there is a trust divide that correlates with economic inequality – poorer communities have less trust in society’s institutions.  In New Zealand, this has led to a polarisation in society – a recent study found only 29% of New Zealanders would help a person in need if that person held an opposing, strongly-held belief.

Neil Paviour-Smith CFInstD

Neil Paviour-Smith CFInstD ran a governance lens over the idea, noting disinformation is an existential threat to business because it is a threat to society. A bit like the climate crisis, really.

He also hypothesised that AI technology will make disinformation even harder to identify. At a minimum, boards should consider what policies may be appropriate should a staff member share disinformation via work emails – or if polarised views create issues in a workplace.

In his view, business should support open debate and understand that staff and customers expect business leaders to speak out on issues such as human rights and inequality.

He also advocated teaching children to think critically to help them to weed out disinformation in an information-rich world.

We then turned to a story of disruption nearly destroying a business before innovation saved it.

In conversation with Anne Urlwin CFInstD, Bremworth Chair George Adams CFInstD described how the business set about reinventing itself after coming very close to winding up.

Bremworth makes carpet from New Zealand wool. It suffered from a perfect storm of disruption that included the rise of synthetics, high wool prices and a trend towards hard flooring. Difficult times saw dividends suspended, debt rise and its share price fall away.

The board sought to strategise a way out of this puzzle and ended up capitalising on another trend – a rise in distrust for synthetics. The honeymoon with plastics was over, Adams said, and Bremworth needed to reach out to modern consumers who were increasingly turning back to natural fibres.

It made the difficult – and courageous decision – to adopt a purpose-driven approach based on a core commitment to wool. Bremworth ditched its own synthetic products.

Reimagining the way the company talked about natural fibres helped turn its fortunes around. And reimagining the company to become a cleaner, greener business operating according to an authentic purpose brought back support and customers.

Bremworth is now free of debt and has the investment needed to rebuild its business, Adams said. It has a supportive distribution network, has survived court cases brought by nervous competitors and has added a leading internal designer to its board.

A self-described wizard philosopher, Dr Jason Fox closed out day one with a humorous musing on leadership culture. Does anyone here surf, or do something else with boards, he asked.

He also required the assembled directors to find the one word to describe the past 12 months of their lives, and warned them that the “Kraken of Doom” was coming to sup on “the sweet nectar of your impending irrelevance”.

But Fox had clearly been moved by some of what he had seen and heard today. Despite presenting an amusing end-of-day speech, he also noted that it had been “one of the most profound leadership events” he has attended.

The fact there was a conversation about the role of governance in reuniting a polarised New Zealand was powerful and most places haven’t got there yet, he said.

Day one of the IoD Leadership Conference also featured presentations and breakout sessions by Andrew Kempson, Guy Waipara, Graham Shaw CFInstD, Dame Kerry Prendergast DNZM, CNZM, CMInstD, Dr Jim Mather CMInstD, Dame Fran Wilde CFInstD, Martin Snedden, Trish Oakley CFInstD, Hamish Beaton, Dermot Conlon and Sir Brian Roche KNZM MInstD.