Advisor Insights with Paul Davies

Advisor Insights

Published 27 January 2023

With a diverse background in financial services, Paul Davies has held various roles including board member, president, chair, treasurer, international stockbroker, business development manager, and financial advisor. Currently, Paul is consulting investment managers on business development and the creation of managed funds. Paul also teaches finance and investment at UniSA, including the course Financial Markets and Institutions. As a Certified Chair™, he has a decade of board experience across the not-for-profit sector, with particular experience in the community and disability sectors, and is the resident expert on boards at SA Leaders.

Recently, Paul has been working with an SME construction company that required expert opinion on whether expansion into South Australia was viable. Initially, Paul implemented a Board Starter Program, completing a growth score assessment and a value chain checklist. This confirmed that the company was ready to grow and that a project advisory board would be the best way to help achieve this. Paul greatly stresses the importance of going through a stringent process to evaluate a company’s goals in order to collate a robust and successful advisory board. Even if a company already has a defined set of goals, it is essential to confirm them as it gives the company confidence in decision-making and staying on track when faced with challenges or new opportunities.

In this Advisor Insights interview with Advisory Board Centre’s Founder and CEO, Louise Broekman, Paul goes into detail on why having a clear and specific focus for an advisory board’s inception, through the utilisation of best practice frameworks and programs, ensures a relatively straightforward advisory board assemblage – and the greatest chance of achieving what the company has set out to accomplish.

I think it’s very important that people do go through this process [Board Starter Program] with companies, even if they’ve got what they think is a very defined set of goals already, because if you confirm those goals through a process, I think that gives them a lot more confidence in decision-making going forward.


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Louise Broekman: Welcome to the Advisor Insights interviews. My name is Louise Brockman. I’m the founder and c e o of the Advisory Board Center, and I’m here with Paul Davies, who’s a certified chair and enjoying the advisory board journey. Welcome, Paul.

Paul Davies: Yeah, thank you for having me.

Louise Broekman: Yeah. Well, I’m looking forward to hearing about your most recent experiences, but before we do that, Paul, and, and diving into that, if you’d like to share a bit about your, about your background, that’d be a great start.

Paul Davies: Okay. Well, my executive background is very much in financial services and investments. So having been an institutional stockbroker and then a business development manager for Global Investment Managers too, goodness, what was that, 12 years ago? I graduated from the company director’s course and have since got a lot of board experience with not-for-profits in particular. Then about three years ago, I joined the Advisory Board Centre, became an advisor, and a year later did the chair’s course. Since then I’ve, I’ve worked on a couple of boards advisory boards, one of which I’m chair of. And yes, it’s been, it’s been an interesting experience.

Louise Broekman: Yeah. Terrific. So I’d love to dig into that experience where, where you are chairing and it’s in the construction industry Paul. So really like to hear about what that journey has been like and, and the processes that you’ve implemented for your best practice advisory board.

Paul Davies: Yes. So I mean the company is based in another state and it wants to break into South Australia. So our initial discussions were about a project-based board to fulfil this goal. They’re a well-established company and they would have a turnover, you know, the higher end of the sort of average SME turnover. My approach was that I know nothing about construction, but I do know about running boards. I’ve had a lot of experience and certainly having done the Certified Chair course that really refocuses your attention on what you need to do to chair an advisory board as opposed to a governance board because they’re two very different objectives there. And what I did with the company was initially we start to do the board starter program, and over two months we did the first two parts of the program which meant evaluating their business growth score and also doing the value chain checklist.

And really what it confirmed was that yep, SA expansions definitely needed to grow the company. They need a board to actually achieve this. and then it confirmed the ideal criteria for these board members to be fit for purpose for this particular board. And I think it’s very important that people do go through this process with companies, even if they’ve got what they think is a very defined set of goals already because if you confirm those with the companies through a process, I think that gives them a lot more confidence in the decision making going forward. And when times when maybe you get glitches, maybe the companies pressed for time, so they realise that they’ve got to continue with this process if they really are going to achieve what they want.

So yeah, I think the process of that is very important. We found that once we had worked out what we wanted from each board member, it made the hiring process a lot easier. you, we were able to create a position description and from that position advertisement and I found over time when I’ve been hiring people, but also applied for positions myself, you sometimes get this terribly long wish list of things you want from a, from a particular applicant. And really all we did was we actually laid out what this board is trying to achieve. And you know, we were really looking for someone who could just achieve that all. The only criteria we put down was 20 years plus of experience in construction companies, but looking to achieve what we’re trying to do there. Strategic advice on expanding in South Australia, providing a network of contacts and also maybe introducing clients plus maybe people who could actually be applicants for state manager. So that’s really it, we laid that out and the position description, and as a result, we were actually able to get a fairly good field of candidates.

Louise Broekman: It’s a very specific role description Paul. so sometimes advisory boards are, are really quite generic, and then other times they’re really quite specific. So as a project advisory board, that’s the way that you establish that and it had a very specific function.

Paul Davies: Yes, absolutely. And as a result, we’ve got a couple of very good board members who have a lot of experience, and I think we’ve, we’ve, they’ve added a lot of value in terms of you know, once you’ve, you’ve, you’ve hired people, I find that a board induction chat with each member is very important. these two particular members are quite experienced, so they’ve either been on boards or they’ve reported to the boards. and I think it gives them a chance to see the whites of my eyes as chair as well, because I can explain my background, but also just to clarify, you know, expectations from both sides as to, to, to, to how a board or this particular board will run. And that gives me confidence as well as the other board members as well. Because I found on whether it’s an advisory board or governance board, it’s often behaviours which determine whether that board is going to be adding value or not. And sometimes you can get some fairly poor behaviours – we won’t go there.

Louise Broekman: But Paul, you raised a really important point about the orientation before the advisory board really starts, so that you, you remove any of those, those personal biases, but also assumptions about what the advisory board is there to do and not to do.

Paul Davies: Yes, quite right. And then of course it is very important I think, as we’ve been taught in the, in the Certified Chair™ course to also have the right documents as well, but behind a board, so that means a good charter confidentiality agreement again, which I think shows professionalism. and, and also your agendas and minutes, which are very good to get focus for everyone, but also in case the regulators come knocking and you want to share that you’ve actually been an advisory board, not a governance board. And I think that’s important because also your professional indemnity insurance as well is very different, and what you get covered for by your insurer if something goes wrong it’s important for those insurers as well to see that you’ve been acting appropriately. And you’ll find that the premiums are very different if you’re on a governance board. The premiums are, are significantly higher than an advisory board because you are up there giving you don’t have a fiduciary responsibility.

Louise Broekman: Yes. And Paul, it’s interesting that you’ve been both on governance boards and advisory boards. Can I just ask, did the organisation have an advisory board before, or is this the first time they’ve actually been down this past right?

Paul Davies: This the first time? Yeah.

Louise Broekman: And then the whole establishment process how important was it for them to really be educated through that process on what the advisory board was in comparison to their governance board?

Paul Davies: Well, they don’t even have a governance board. I mean they have two directors that set, I wouldn’t call that a board, but yes, they needed to be educated as to what we’re trying to achieve. And the focus that we’re using, and also the parameters of the board and where we’re not going to step into, but what we are going to focus on. I think that’s given them a lot of confidence in having gone through the process, they’ve got confidence in the decision-making.

Louise Broekman: That’s terrific. Well, I look forward to hearing more about the journey Paul as it continues over time. Sounds like a very targeted advisory board, so I’m sure you’re really going for some really targeted impacts.

Paul Davies: Yes, very much so. Yeah.

Louise Broekman: Terrific. Thank you very much for joining me today and look forward to continuing the journey with you, Paul.

Paul Davies: Thank you very much.