Ideas for those who want to make a difference Richard Gossage Of Whales and Sharks Ideas for those who want to make a difference Richard Gossage

If the risk messages are understood by the board they will do a better job of taking & managing risks Copper Bottom ©

‘Let’s be clear - I didn't become a trusted chairman by trying to please.’

‘Eagles may soar …’ © Copper Bottom Mentoring

get stuck in jet engines’ ‘…but weasels don’t get stuck in jet engines’ - Ricky Gervais, The Office © Copper Bottom Mentoring

Who wants to be an NED? Governance (new in parts) Risk Function Appropriately sized for nature and complexity of organisation Skilled resources dedicated to risk management with clearly defined roles, responsibilities & reporting lines Operationally independent of business lines Appropriate remuneration structure A Chief Risk Officer, who is not the CEO or CFO A Board Risk Committee made up of independent directors, responsible for setting risk appetite, establishing risk strategy AND ensuring there is a sound risk culture Risk Management Framework Prevailing Culture Key Board endorsed documents –Risk Appetite Statement, Risk Management Strategy, ICAAP, Business Plan (new in parts) Policies & procedures setting out how risks are identified, measured, monitored & reported, including modelling & model risk Risk Management Information Systems to capture and report risk information, including notifying APRA of changes & breaches The Board must ensure that a sound risk management culture is established and maintained throughout the institution/group (CPS 220 para 12(b)); and The Board must monitor culture to meet their requirement to certify annually that an effect risk regime is in place and has operated effectively Australian Regulatory Change - Jan 1st, 2015

Tip No. 1 - Shoes

Tip No.2 - The Arc of Mis-Communication What I meant to say Communication Gap What they heard/understood © Copper Bottom Mentoring

Tip No.3 - The Art of Personal Influencing The Model Part 1 Assertion Bridging Persuasion ÙX ÙX ÙX +10 Push Pull +10

Tip No.3 - The Art of Personal Influencing The Model Part 2 Lyrics Music Dance

Tip No.3 - The Art of Personal Influencing Where magic (or disaster) happens Assertion Bridging Persuasion 10 30 60 Lyrics Music Dance

Tip No.4 - Strategic Influencing High Whales Level of influence Eels Goldfish Low Against you/your argument For you/your argument

Tip No.4 - Strategic Influencing High Arthur Jenny Claire Zhang Arjun Level of influence Julia Liu Yang David Jill Steve Low Against you/your argument For you/your argument

Tip No.4 - Strategic Influencing High Arthur Jenny Claire Zhang Arjun Level of influence Julia Liu Yang David Jill Steve Low Against you/your argument For you/your argument

Tip No.4 - Strategic Influencing Arthur Daley – Chair of Risk Committee Assumptions: Recently appointed as Chair and therefore needs to demonstrate capability to make transition. Needs to create and sell ‘own agenda’. Likely to put his own committee members in place – therefore things will change. Small wins, create momentum, no disasters within first 12 months are core objectives. Influencing Objectives: I need to move to ‘trusted advisor’ status but critically to be seen as Company centric not AD centric. Quality of judgment, pro-activeness, and being seen to do the right thing for Company will define my and Risk’s reputation. Actions and behaviours rather than words need to drive my thinking

Tip No.4 - Strategic Influencing Arthur Daley – Chair of Risk Committee Influencing Approach: Be proactive – provide insight and analysis unprompted Consult as appropriate, ensure analysis supports better decision making – but be decisive, role model integrity Consider unintended consequences – invest time thinking in AD’s shoes. Particular focus on AD’s relationships – who is he influenced by? Get to know AD the person. Use bridging skills to develop an understanding of his values and beliefs Avoid situations that put you between AD, the Board, and the CEO. Keep personal emotion at bay, promote transparency

‘When I was your age, things were exactly the way they are now.’ Is this you? ‘When I was your age, things were exactly the way they are now.’

To recap… The role of an NED is not easy, and the penalties for getting it wrong are “sobering”. Understand where they are coming from – walk in their shoes Assume they have maximum intelligence but minimum knowledge Use the Strategic Influencing Tool to work out who are the whales and who are the sharks – using your Bridging skills and Relationship Mapping Develop influencing strategies for the key players – beware of making assumptions with no supporting information Strategy is one thing but personal influencing is upfront and personal – use the Influencing Model Minimising the Arc of Mis-communication is essential to corporate success If you are going to be remembered for anything make it for sound judgment Make mistakes, not excuses. Transparency

Copper Bottom Mentoring For further information please contact: Richard Gossage – richardgossage@copperbottomenterprises.com Copyright: Copper Bottom Enterprises Ltd. All rights reserved. Copper Bottom Advisory and Copper Bottom Mentoring are trading names of Copper Bottom Enterprises Ltd. This document is protected under the copyright laws of Australia and the UK, and other countries, as an unpublished work. The document contains information that is proprietary and confidential to Copper Bottom Enterprises Ltd. It shall not be disclosed or duplicated, used in whole or in part by the recipient for any purpose other than for the purpose intended. Any other use or disclosure in whole or in part without the express written permission of Copper Bottom Enterprises Ltd is prohibited.