Equip Super hired executive recruitment specialists Heidrick & Struggles to perform a skills matrix assessment at what was then an $8 billion fund, Equip chair Andrew Fairley recalls. After getting the results, Equip worked with Heidrick & Struggles to implement a strategy to find candidates to provide the missing skills.
“We’ve said that we think we run three businesses,” Fairley says. “We run an investment business, we run an administration and insurance business, and we run an after-care and advisory business.
For those three businesses, you need a broad subset of skills, and the soft skills you then need are understanding the issues of the employer, because $3 billion of our fund is in a defined benefit plan.
“You need to understand the circumstances of members, and you need to be able to understand the superannuation landscape we have in this country. We think that you have to have the skills, but that you also have to have a pipeline of people who are coming through in succession.”
Equip has a policy of four terms of three years, Fairley says.
“Twelve years is probably about the optimal. There’s no hard and fast rule – some say nine years, some say six – we think 12 is the outlier, and it also comes back
to one’s personal experiences.”
Directors need hard skills around finance, risk, understanding of insurance markets, and administration of both a defined contribution and a defined benefit plan.
This led Equip to put an actuary on the board.
“Then there are commercial skills, the entrepreneurial skills – those that understand what drives a successful business, because we’re running a profit-for-member business,” Fairley says. “Around our communications, we identified all those years ago that a key skill was having somebody who understands digital strategy and social media, and the whole idea of disruption.
“Those are the sorts of things we took into account, and [you also] need to have people who are collegial, but also not going to be intimidated by others into not asking questions. Plus, we need people who will fit the culture of the organisation. That’s a really important consideration.”
The need for some of these skills led Equip to change its process for selecting board members, from a direct election by employers and members for the requisite representatives, to a nominating process by employers and members, with the long list of nominees given to Heidrick & Struggles, which then tailors the short list of candidates from whom the board chooses.
“For example, we’ve just been through a member appointment process and we’ve said there are two positions that are coming up,” Fairley says. “In one position, we need an absolute expert in investment. For the other position, we need somebody who is highly skilled in communications, but particularly in digital strategy and digital communications, and understands and can deliver, and appreciates the role disruption can play and will continue to play. We advertised that one on our website, and we got many, many applications – over 20 for each role, including the two directors who were up for re-election.”
Both roles have now been filled.
“We are a fund that is still – at the essence of our director appointment criteria – unabashedly committed to having the skills necessary to run a $15 billion fund,” Fairley says.
For more on board skill retention and trustee tenure, click here.