At our recent “Chatham House” meeting (graduates of the AICD course in Perth) we discussed the issues of:
1. Some of the great practical advice that graduates of the AICD Company Directors course had been able to apply; and
2. The legal issues and risks of being a director, particularly non-executive

The course is very good at outlining responsibilities and legal issues for directors - highly recommended if you are considering or are a director. Interesting, a number of participants indicated it is significant enough for them to never consider being a director. I have asked many people including various directors as well as Professor Bob Garrett who wrote The Fish Rots from the Head, amongst other books (signed copies proudly on my bookshelf) whether they shared the view that the legal position against directors is too onerous. No one seems to share the view.

In some respects, the purpose of a limited liability company is to encourage considered risk taking. However in recent times a great deal of that risk has been transferred to the board.

I was very pleased to see a great article by John M Green in this month’s Company Director magazine that succinctly gets to the heart of the issue. He also proposes a better way.

As John describes it, the key issue is that non-exec directors fees may be (depending upon the size of the company) from $30k to $200k per year. If the company faces a significant claim, directors can face unlimited liability, a weak business judgement rule and a newly burgeoning litigation industry? So, small amount of fees against potentially catastrophic risk. He makes a very good point.

Non executive directors are always going to be disadvantaged in business knowledge as compared to company management. Those people who have the talent to be non-executives also potentially can add value to companies by consulting - without the legal liability, and with the ability to involve their own consulting firm to deliver on other projects to the company without conflict of interest becoming an issue.

Non execs play an important role however in the governance of companies - and the role is required as more companies take the path of listing to expand their capital base.

John M Green’s suggestions (to apply only if fraud hasn’t occured):
1. Cap NED’s liability in proportion to their fees
2. Consider Charity NED’s and cap a fixed flat amount
3. Consider NED’s shares as part of settlement.

In summary, the reason why many people I have asked indicate that nothing is wrong with the current system is that the penalties are necessary to have big deterrents to avoid situations like HIH. I agree wholeheartedly. The area of reasonable concern is where directors act in good faith, being diligent and genuinely acting in the company’s best interests. Potential consequences are catastrophic but the rate of prosecution is low. John’s suggestions leave the big stick against fraud, but provide a more sensible position for NEDs. I look forward to the outcome of the government review in this area.

What do you think? Please leave your comments on your experience and views.

Check out http://www.resilientfutures.org/2008/06/what-can-we-learn-from-the-wa-gas-crisis/

From that post:

On June 3 a massive gas explosion happened sparking a gas crisis in the state at Varanus – a small island off the North West coast of Western Australia.

About 30% of WA’s energy supply was dependent on the pipeline from Varanus for their energy needs.

Perth is now on energy rations, with large business told each evening how much energy they have for the following day. Casuals are being placed on standby and large mineral processing plants have been shut down – which are the powerhouse for the national economy.

Alan Carpenter, WA’s Premier went on television this week in an unprecedented call for people to reduce their energy consumption – heating, appliances and shorter showers to keep the state’s economy going. The WA Chamber of Commerce has said that as many as 10% of Perth businesses could go out of business as a result of this.

The author, Todd Davies, goes on to discuss in detail the importance of building resilience into organisations so that they can resist shocks more easily.

Whether you call it resilient thinking or plain old fashioned disaster recovery planning, there is a whole area in which online reputation management comes into play. Resilience in reputation is dependent upon the appropriate role that companies play within the communities they work within. Companies that give back generally have stronger brands, attract more staff, are much more highly respected - and tend to be more profitable, and no doubt resilient. One of the things I will be talking on soon is PR 2.0 (See my speaking page for when).

A recent email that has been doing the rounds indicates very strongly that a reckless lack of maintenance by Apache created the disaster, and with a number of photos from the site, would make some - maybe many - people think it is credible. I do not have the facts to form a view - but from a reputation management viewpoint, neither do the general public. Coupled with some recent press from The West Australian indicated that this disaster was predicted 4 years ago, the view is that a bunch of people must have let their eyes come off the ball in a way that is simply unacceptable given the knock on effect.

Back to the point of the post - PR 2.0 effectively is the approach to managing issues online. How do social media come into play? How resilient will your reputation be should an event happen? How do you react particularly when reaction to an event gets near tipping point?

Like all disaster recovery planning, you need the scenarios and responses determined and practised well ahead of time. Communication planning is the same deal. We have seen remarkable little from the company in terms of hands on response. Again without facts, can an audience be blamed for assuming the company may not care?

Whilst at CeBIT there was plenty of discussion about content management systems and in a session I sat in there was a discussion about the difficulty of getting them to work appropriately. Indeed I spoke with someone prior to the session who was about to implement their 3rd tilt at content management in 4 years…. clearly this is a challenging area to get right.

The presenter was pretty strong on all of the challenges and problems with implementing CMS - and even though many of those issues exist organisations have really very little choice - they must implement a content management system to meet various record keeping requirements and retain sanity. Our Perth team at Ross has assisted 5 organisations in Perth implement CMS successfully and in two cases the pages being managed is north of 8000. Without a CMS you are history.

But what about the lower end of the market? Whilst there are plenty of open source systems (I don’t have any personal experience with them other than Wordpress), the big challenge is getting the software out of the way of the communication.

So, when my son’s junior football club (the Kingsley Junior Football Club) asked me to help them with a website (more correctly, my wife who is on the committee told them I would do it!!) here is what I did:

1. Created a new in stance of Wordpress at Mediatemple (which is where I host this blog) and setup the MySQL database. Fortunately the Wordpress instructions are very good (get the detailed instructions, not the overview). Fair bit of mucking around here, but would be much, much quicker second time around.
   There is a load of hosting providers for Wordpress. Mediatemple does have a one click install of Wordpress - but it is an old version. With the various warnings in the market at the moment about the risk of not keeping Wordpress current, you need to log in manually and follow instructions to update the appropriate files by FTP
2. I found some Wordpress designs that had elements of what I wanted in the design
3. I then sketched up (yes, using old fashioned but very efficient technology - a pencil on graph paper) exactly what I wanted and where
4. Reach for your favourite web designers (in my case, the guys at Bam Creative) and I provided them with a formal brief of what I needed. I also provided them with the log in details so they could upload and test the template. After some tweaking we were all set. This was set up with left hand and right hand Wordpress widgets
5. Add Flickr widget - create a new Wordpress widget and paste the widget code you get from the Flickr site. Fiddle with the size settings until you get what you want.
6. And ditto with the right hand side.
7. Once all done, put in your Google Analytics code and you are away at your test domain.
8. Migrate your domain (this is currently sitting with a different registrar but will be moved -big tip, make sure that the domain details haven’t been lost, it is a real pain to migrate the domain)

So, all up the site we were trying to emulate in the WA Football League would have cost circa $20k to $30k. We got this one away for under a few thousand dollars and around 50 hours of my time. The Club is now managing and adding the content, and I think it looks pretty good. The latest edition of Wordpress is easier to use, and well worth considering….

Thursday 22 May 2008 was the big day of Transaction 2.0 and Techramp. What a hoot….. up at 5.45 having worked on my content until 1am, quick run in the gym to get the blood moving and off to CeBIT by 7.30 to ensure everything was honkey dorey and to meet Ivan Kaye from Business Strategies International at 8am.

It started with me introducing Jackie Taranto, MD of Hannover Fairs Australia to officially open Transaction 2.0. She was telling me prior to the introduction about some of the things that she was involved with to try to grow the industry and the work that Hannover has done in this regard. A down to earth dynamo is a good description.

Then I introduced Paul Slakely of Google to talk about cloud computing, interesting topics that ran for an hour with all the questions from the people that attended. Great speaker who was very candid about where this is going. Make no doubt about it, Google is going after providing a huge range of services for businesses. Nice to be able to tell him that Gilad Greenbaum and I collaborated on a Google Spreadsheet to set up the conference.

Then Transaction 2.0 split into 2 rooms with me chairing Techramp. First up was Jason Calacanis who promised to convince everyone that they should fire everyone that is average and good in the business, and how he had mathematically proven it. Got people thinking (intentionally controversial) and he has spent a lot of time thinking about this topic. Whilst it may sound brutal and a tad unkind, his analogy was sports. We all know that we expect coaches to fire – quickly – average performers and transition your good performers to excellent performers. Watch mahalo – let’s see how he goes. Was fun trying to explain his presentation in 4 minutes at the airport to Richard Giles of scouta

About this point my brother who was in the audience came up to say hello. With a “know this bloke?” I turned to find my father who had surprised me by coming over from Australind in Western Australia to check out the day. Paid full fair to get to Sydney and full freight for the CeBIT ticket. What a huge and wonderful surprise, nice one Dad…

Mick from Polenizer then got up to talk about focus (good book on that, see Focus from the book link above) as it relates to startup companies. Great talk and right on the money for mine.

I felt like I was trying to steer the speedboat from the ski’s with trying to keep the thing to time. The audience strapped themselves in and hung on, and I think enjoyed themselves immensely.

Quick caffeine break and back into it. Txt messages to Gilad back and forth to keep ourselves running during the day (damned if I know where he gets his energy from).

Great panel on user centric design, thanks Ruby, Oliver, Peter and Russ – particularly Russ for seizing the initiative in getting the session off to a good start by flying some questions around to the panel members to get us thinking.

Then we got stuck into Hells Kitchen with Phil from Pollenizer.

Vishal Sharma chaired a panel discussion on Web 2.0 trends, great job and a great panel – Duncan Riley, Gilad Greenbaum, contributions from Mike Cannon-Brookes from Atlassian.

Finally it was time to get onto the final 5 best Aussie startups. 6 minutes plus 3 minutes of questions. Interesting technical startups.

All of the presentations were interesting and showed companies at really different stages of their thinking. I think each one will have gone away with lots of really good feedback and ways of moving forward. All to be commended on having a red hot go and having the courage to put themselves out there. I’m afraid I just couldn’t stretch out the winner announcement ala Australian idol but was pleased to announce Good Barry unanimously

CEO Peter Cooper and Founder and Executive Chairman Marc Lehmann have really zazzed up Saasu, and this is an app IMHO going big time. I first signed up for an account ages ago to check it out after following a link from 88miles.net from MadPilot Myles Eftos - also from Perth - (see my earlier post on that product here).

Saasu is accounting software available as a service. I used to use MYOB when running my own business previously, and frankly that takes quite some time to get to grips with.

The Saasu interface has improved a lot from the last iteration, and if you are in the market for accounting and finance software this is one you must put on your shopping list. Solid .Net infrastructure (our Perth Ross Consulting team also mainly develop in this environment, so we know the environment well) and continually improving the product. 

I was introduced to Peter and Marc by Gilad Greenbaum whilst at Cebit, and got to have a few cleansing ales with them. Marc is formerly from Perth and was here recently for Barcamp. The photos here are at the Awards night at Cebit. For the second year in a row, Saasu picked up an award, so they are obviously doing something right.

I think they are on the money with this offering, so keep your eyes on it.

Last week I attended, along with around 1100 other people, a presentation given by Kerry Stokes as part of the Business News Success and Leadership breakfast series.

Kerry and Peter Gammel approached Business News to hold the breakfast with a key aim in mind - to attract solid support from Perth’s business community for his bid to obtain two board seats on the West Australian Newspapers’ board. Judging from the support and response that I heard from the room, I got only the view that his approach had worked.

He made some interesting points, which I quote here from memory:

• The West Australian Saturday edition is likely to be outsold by The Sunday Times very soon - something I never would have dreamed would ever happen when I was involved in buying significant press for clients in my advertising days pre-2000
• Distribution to regional centres is solidly falling due to deliveries arriving far too late
• The supply chain is just not getting a fair share of the revenue slice, with no increase in payment in many years

His personal contributions and business success have been very positive for Western Australia, and innovations, such as giving media training to apprentices working at Westrac so that they could effectively communicate with customers, are simple and clever.

So, what of the strategy - effectively attacking the board for not driving better performance with the underlying message that management isn’t innovative enough, customer focussed enough, nor is the content interesting enough.

Much of the criticism can be laid at the feet of editorial direction, which has taken a real issues driven approach. The Sunday Times has made leaps and bounds in improving its product (which frankly used to be terrible) and deserves the success of improved readership.

However, some of the issue is the changing demographics of the readership audience. The West used to be compulsory reading for me daily - but my readership habits have changed.

I now getting my morning fix of news from:

• A news site such as www.news.com.au or www.smh.com.au
• Snippets off my 3 mobile phone if I am out using Planet 3 business or m.businessday.com.au - but mainly sport related news
• The excellent Business News email service
• The Financial Review - which I do read cover to cover
• And for more in depth stuff, well good periodicals like the Company Director magazine

As you can see it is the business stuff that I prefer to read and need to be across. I lost my faith in The West when I heard a journalist ask the CEO of Coca-cola Amatil if they were looking at the then Peters and Brownes milk assets. The CEO responded, “we are not particularly looking at them, but if something were presented to us, and we felt it was a fit we would consider it”. Guess the headline, “Coca Cola Amatil eyes Peters and Brownes milk assets”…

Having had my shot there (bearing in mind that in dealing with the advertising folk at The West, I found them very helpful, very customer focussed and keen to ensure results - I didn’t have a negative experience with anyone there at all), perhaps it is worth looking at the other side of the argument.

Copied directly from the West Australian site:

• There is a significant risk that Mr Stokes and Seven Network may gain effective control of WAN without paying a control premium
• Seven Network is a direct competitor of WAN, creating potential for recurring and systemic conflicts of interest
• The criticism of the board and the company by Seven Network and Mr Stokes ignores WAN’s strong underlying performance and profitability
• The focus by Seven Network and Mr Stokes on recent results ignores the fact that WAN’s recent dividend payment was affected by abnormal events and that the final dividend for the 07/08 year is expected to be significantly higher than the interim dividend
• The company has a clear strategy in place to generate significant value for all WAN shareholders

The above points are explained in more detail here and worth a read, particularly given the similar approach taken by Kerry Stokes to secure his place into Seven would appear almost identical, and that there is absolutely no question that Seven and WA News compete for media dollars and increasingly will be competing more and more online.

Whatever the outcome, there will be plenty of pressure on the board and management to improve results.

The author does not have shares in either The West or WAN, nor Business News.

This week I had the great pleasure of meeting Professor Bob Garratt, author of the above book amongst others. He was in Perth to present on “Directors and their homework: developing strategic thought”.

The presentation was interesting and through provoking and particularly highlighted the ever growing demands on directors, as the scope of what is considered to be doing an appropriately thorough job continues to grow and the essence of what constitutes good governance becomes clearer.

One of the many things covered that I found refreshing was his bias to jargon free simple statements of strategic direction and intent, and using tools such as PPESTT analysis as a board developmental tool.

PPESTT is:

• Political environment
• Physical environment
• Economic Environment
• Social environment
• Technological environment
• Trade environment

His suggestion was to work in buddy pairs with a director and senior executive and address one of each of the above in real detail with quarterly feedback sessions to the board to constitute no more than 4 sides of A4 paper, thereby covering all of the above over 18 months.

The real purpose in doing so is to get quite a different macro view of the world and really lift up to another helicopter level. Further it will make board members consider the daily news intake in a different light in relation to the critical job of setting and guiding strategy.

A good idea - and also a book worth reading.

I asked him at the close of his presentation about how the nature of board relationships had changed since he published “The Fish Rots From the Head”. Interestingly there are now organisations that are monitoring board interrelationships, which is important in assessing independence. He went on to say that whilst there was a big improvement in this area, nurturing new talent is an important and ongoing job. In addition, the evolution of corporate governance is far from complete with financial market players, their machinations and their impact on share price being a key issue needing addressing by market regulators.

I’d go one further and ask how the role of independent audit by the top tier firms still leaves only the directors exposed in a meltdown, even if the auditors should have uncovered the issues.

The Startups Carnival runs from March 3 to 17 2008 and is a great opportunity for those people trying to get a new initiative off the ground in the technology space. With an initial focus towards Web 2.0 / Social Networking but also inclusive of other technology environments, initiatives in green technology, it will be a good opportunity to showcase some of the new great ideas that are on the verge of fruition.

So how does it work? Here is an extract from the Startups Carnival site:

How it works:
It’s an online (web based) carnival, starting on March 3, 2008.
On receiving the applications/registration from various startups/ventures, profiles/information will be compiled in a web format. These profiles /information will be published on the carnival portal, starting March 3, 2008. Three/four profiles will be covered everyday on the portal.

So please keep watching the space and make sure you have got your feeds subscribed as we have some grand plans on this to take it further.

In terms of what participants get are:

• New ventures learn about other ventures and people behind these across Australia.
• We are finalizing Judging Panel of 3 to be announced by Monday Feb 18, 2008. The panel is going to judge all the ventures on originality, simplicity, technology and marketability. They will select the top three. They will also provide some suggestions to all participants.
• We are also working on with some sponsors on offering some form of prizes to the top three ventures and few freebies to others. Once finalized it will be published on site.
• We are also working on getting some famous global bloggers to write about this initiative and people/ventures who are participating.

I’ve been fortunate enough to be invited as a judge along with Duncan Riley and Ross Dawson

So if you have a venture, then check it out and be a part of it.

I’ve been looking around at some online timesheet tools and Miles Burke at Bam Creative suggested 88 Miles from Mad Pilot

Having looked at a heap of timesheet tools, this looks like a really good tool - and by good fortune developed in Perth.

Some of the features I was looking for included:

1. Web based (a given really)
2. Allow multiple clients
3. Allow multiple projects
4. Allow multiple consultants to work on any mix of the above
5. Provide individual timesheets
6. Provide team reporting
7. Be easy to use
8. Fairly priced

Some new features coming are likely to include additional reporting and adding your own logo to timesheets.

So far I’m impressed and have started using it, worth giving a try….

You can get the gist of medical insurance if you have been through life insurance quotes. However to comprehend something like a cheap car insurance, you will have to read the relevant insurance quotes.