Louise Broekman: I’m here with David Williams, who’s a Certified Chair and very experienced in advisory boards. David Williams, welcome to the Advisory Board Insights.
David Williams: Thanks very much, Louise. It’s a pleasure.
Louise Broekman: David you have a long professional history. Do you want to share a bit about your story?
David Williams: Yes. I’m a lawyer by trade, one of those. I’ve been in the industry for nearly 40 years in and around legal firms. Within that, I work in the SME market with business owners.
I come from a family involvement in business. In fact, we had a business where there was four brothers including myself, I was the only one not working in the business. So I’ve always had a deep appreciation for how businesses operate.
In that business we went through a number of cycles. Small business coming from Cairns in the north, then to Brisbane. Opening an operation here with brothers running the other offices. There were basically three main ones, Cairns, Townsville, and Brisbane.
We went through this process of looking for cash because we’re in the industrial markets. We had dealerships of all sorts of tractors, trucks, you name it. We had an outside shareholder, which was back in those days, BLEC, which was a forerunner of effectively the guys who started BLEC, also started Quadrant, which is one of the biggest and largest private equity. So we had them as an investor, we had outside shareholders involved. It was a governance board, of course. Then we bought them out.
David Williams: From that, I’ve been on a lot of advisory boards, in education, and currently I’m on five boards — four of them are advisory boards and fifth is a governance board. Four of those are in fact chair positions and one an advisor on an advisory board.
Louise Broekman: David, what’s it like to be sitting on advisory boards as an advisor and as a chair?
David Williams: It’s very rewarding and it makes it a life very interesting. Much more exciting than boring legal work. It’s not an onerous thing but you really have to connect with the business. If you can’t connect with the business, you’re not going to be useful to them. Advisors sometimes reach their use by dates. We’d just gone through a review on one of the boards I’m on and I’ve been on that board for some time. It was a bit of self-assessment but we all agreed that we liked the idea of advisory boards. It’s really good but I think the starting point is you’ve got to connect with the business owners. If you don’t connect, there will be a disconnect in regards to how you can actually help them. As advisors, you’ll need to help them really facilitate their growth and creating value.
Louise Broekman: It’s interesting that you’ve been on those governance and advisory boards. Why have some of those businesses gone down the advisory board route? Why have they gone down that track and not a governance board or a different type of advisor engagement?
David Williams: There’s probably two sides of the coin. One is the not really wanting to be having outsiders on the governance board, even though the governance board might not actually do a lot of governance. The board may effectively only declare dividends and sign solvency certificates.
I think the reason they establish an advisory board is that you can be far more targeted to what you want. You could have an advisory board as narrow a field as you want or as wide a field as you want.
Advisors tend to be probably attracted to advisory boards because there’s a reduced liability potential, but it also brings up the shadow director, that as I’ve said to you, advisors are not shadow directors because they make recommendations. Effectively, it’s a business relationship between the advisor and the directors in the company to assist them in the challenges that they face.
Louise Broekman: Being a Certified Chair and chairing boards, what’s that experience like for you and being the chair of the board versus being an advisor on a board? Because you’ve filled every role around the table.
David Williams: I think that the key for a chair is to allow discussion but keep it targeted, whereas an advisor is targeting a specific area. What I tend to do is as a chair, I do the minutes, because businesses don’t. They don’t have the time to record minutes and the minutes are really important because it actually becomes a to do list for the business. There’s one of the boards I’m on where I don’t do the minutes and the biggest problem they have is that the minutes come out so late. You know, I try to get them out within 24, 48 hours purely because I’ve got a resource that I can use.
Louise Broekman: David, I guess just to wrap up with, you know, growing up in business it’s great to have that background to it because you’ve lived it and breathed it as well. But what tips do you have for business owners and what tips would you have for advisors?
David Williams: Right. Business owners, I think one of the things that they need to do is to use their advisory boards. It’s also down the next level in management. Like it might be just the owners. What we’ve actually gone through and one of the advisory boards is that the next level down don’t know of its existence, of its creation, of its help. So one of the big issues is that owners don’t utilize the advisors outside the meetings. That’s probably one of the big issues from the owner. An owner has to really be prepared to allow them into their lives because it’s garbage in, garbage out. If they don’t let the advisors know about what their business is and what are the challenges and things like that, advisors cannot assist. If they’re protecting information which could be critical in strategy or making informed decisions and making informed recommendations, that’s not good for business owners.
David Williams: On the advisor side, I think they’ve got to show interest. It’s not just the turn up to the meetings. You know, to check in how you’re going, is there anything you want or need assistance in regards to? And really also advisors having the mobile numbers of the owners so they can actually give them a ring and and see how they going. I mean showing interest I think is one of the big issues. The owners will then actually open a further line of communication, I think, which adds value to what the advisory board does because everyone reviews at the end of the day whether or not it adds value to the business.
Louise Broekman: So everyone’s independent of each other and wants genuinely the best for somebody else because there is no other agenda.
David Williams: Yes, that’s right. I mean the agenda is to help … from an advisor is to help them. From an owner. They need really to, they want to create value and the reason they want to set up advisory boards is to either grow the business or become more profitable or whatever the reason would be. It’s a two-way street. The parties have to embrace themselves. You know, as I say, head for the try line and score. Because you know, the owners want to at some point exit, one would assume. If the advisors do their job well, they will have a very good exit, which is a good result. So win-win.
Louise Broekman: David, you’re always so generous with your time, so thank you. I love having you as part of the advisory community too, so we’re all learning together. Thank you for sharing your insights today.
David Williams: Not a problem, Louise. Anytime.