Transcript

Matt Heine (MH):
Catherine, welcome to the show. Thanks so much for joining me today.

Catherine Robson (CR):
It's an absolute pleasure. I've been really looking forward to having a chat with you, Matt.

MH:
We've had a couple of false starts in between COVID, man flu, and a touch of bronchitis. It's great to finally be able to have a chat.

CR:
It's the new world, isn't it? We need to be flexible and find new ways of doing things, including being able to reschedule at a moment's notice.

MH:
Absolutely. But I've been really looking forward to this chat. I think your career has been an incredibly fascinating one. I was thinking back to when we first met, I couldn't quite work out the year, but we were obviously travelling around Australia with the AFA, both presenting in front of 800 people probably for the first time, actually. And was it five years ago or longer? Must have been longer.

CR:
Might be a bit longer than that, actually. And you were always a very hard act to follow, Matt.

MH:
Likewise. It was good fun and a good learning experience for both of us. But back then, you were obviously a financial planner, you had a very successful firm called Affinity, and just really keen to hear what you've been up to since then.

CR:
So I think one of the pivotal moments was after I'd owned the business for about six years, I sort of felt like there was a revolving door with staff. So I was doing well attracting and servicing clients, but not doing nearly as well in terms of cultivating a team below me and really recognise that I couldn't scale the business if I wasn't able to do that well. So I really was at a decision point where I could either lean into really developing those people skills or selling the business and passing it to someone that had that capability to grow and scale to the business's potential, because I think we were onto something as a business and that's what I decided to do. So I sold the business to another advisor and then I decided to take some time, but explore a few avenues. I'd thought about maybe starting another business, maybe becoming a full time early stage investor, or maybe becoming a full time non-executive director. And I've done a bit of all of those things, but these days I'm predominantly a non-executive director.

MH:
It's not often that you hear people talking about their... Maybe failings is too harsh a word, but so quickly within a podcast, and I think you've been pretty upfront that you weren't a great people leader, but I think given that financial planning, wealth management is such a people orientated business, I'm interested in how you came to that realisation, because you'd obviously built very deep relationships with your clients but didn't feel that you were able to do the same with your staff.

CR:
Yeah, look, I think... And this is one of the reasons I became a full time non-executive director. It was actually the board. So initially when I started the business, I had an advisory board at Affinity, and then a few years down the road we reconstituted that as a full governance board. And it was actually one of the directors that held a mirror up to me and helped me understand the different leadership styles and said, "Well, when you look at the different leadership styles, I think you're a pace setter," and that's the sort of leader who likes to run fast, likes to give lots of autonomy and just says to people, "Work it out." So I think that was super helpful because I wasn't on my own trying to make that decision. There was directors who had their own fiduciary responsibility to the organisation and not just to me as the business owner that helped me walk up to something that I could have avoided for a much longer period of time.

So I think that's one of the reasons that I love being now in a position to help other business managers have some of those own aha moments. And I had to face into the fact that I really love working. I want to work for a long, long time. So I think I wanted to spend my time doing something that was meaningful, but also really personally satisfying. And I think financial planning is an incredibly noble profession and very much needed. And if you're not enjoying it, then I don't think you're doing a service to the profession to hang around doing it, but not contributing to getting good outcomes for people. It's great to get good customer outcomes, but if you're not getting good outcomes for the people that work in the industry and really fostering their development in a positive way, then go and do something else.

MH:
Thinking about a lot of the people in the industry, the description of pace setter is probably a good one, and I think for many firms it's been a real benefit because there has been so much change over the last 5 or 10 years. But equally, to your point, you need to make a decision, do you do something differently or do you try and build around a team around that particular leadership style?

CR:
I think there's a few realisations that I've had since I sold the business. The first is that you're not locked into one style necessarily, and part of why I'm really keen to continue to grow and develop as a person is you can acquire new skills and you can flex to different styles. I think the other thing is I think technology has a massive role to play here. So rather than expecting one individual to be good at everything, I think technology has this capability to be almost like an exoskeleton for each of us, regardless of what our roles are, but particularly for people who are relatively junior in an organisation, and give them the opportunity to level up and become superhuman in that Tony Stark way, where the hyper personalization that customers are expecting more and more, rather than just expecting our human interface to just stretch more and more and more, and remember more and more, to actually have technology sit alongside them and do a lot of that for them in a systematic way so that then they really enjoy the work that they're doing and that they're most well positioned for.

And I think from my perspective as a relatively small business, I didn't have the appetite to double down and make the investments that I think were needed. I think also it's four or five years ago now that I sold the business, there wasn't as many affordable, scalable technology outcomes to build that exoskeleton. So again, part of my rationale was take some money off the table and maybe sit with some capital waiting for the opportunity to invest in some of the technologies that might enable us to give our people that exoskeleton.

MH:
And I think you certainly shouldn't shy away from the fact that you built up a very impressive business and a very successful business during that time. I think I recall you saying at the time that you were wanting to be the McKinsey of financial planning, and I've always been interested to know, what does that mean?

CR:
So I think McKinsey are able to flex across a whole wide range of industries and provide management consulting advice to companies in a way that is amazing, to the extent that they come in knowing much less about a business than the business knows, and yet they're able to create enormous value. And they're also able to have people work in McKinsey enormously hard with really difficult nutty problems and retain good people working within the McKinsey framework. So that really appealed to me. That not only could you approach each customer, sophisticated complex customers, and even on day one if you knew less about them than they knew about themselves, you could add enormous value and then create this fabulous extending career path for the smartest people.

And those people would effectively be partnership contenders to own the future of the business. So that was the model I had in my mind, being the very best at thinking about the value being in the advice and not being in income streams through product sales or other business models, that the advice itself was so valuable that people were prepared to pay a significant premium for it.

MH:
No, I think that's really interesting. It's not a model necessarily that I've thought about or heard about historically, but given, I guess, the many challenges that the industry is having attracting new talent and people into the industry to service a huge amount of clients that are actually looking for advice, maybe that's a bit of a challenge for a big firm out there to think about.

CR:
Yeah, I think so. Again, I think you can't just do it with human beings. I think you need to be able to automate a lot of the routine work so that you get really bright people early on in their career that are really unleashed into the problem solving bit of what financial planning is about at the top end. And again, I think people will only stay engaged in the profession if they find satisfaction beyond just money. And I think that's what I see in other domains where people get really excited about the work that they do, that's where motivation and longevity comes from, I think

MH:
Now I've heard you talk about scale and technology a number of times already in the first few minutes of this podcast, probably a good segue into some of the work that you're doing now. Having sold your financial planning business, you decided to go down the path of non-executive directors and you've accumulated quite a good portfolio since then. Do you want to just talk about some of the businesses that you're working with?

CR:
So concurrently with running Affinity private I'd been on the board of a fully owned subsidiary of Equity Trustees. So I had sat on their superannuation subsidiary. So we had been the trustee of a number of different superannuation funds. So I had done that deliberately as a a pathway to... Firstly, I thought it was a good marketing opportunity for Affinity, to be honest, because when you're targeting really top end clients, there's limited opportunities to put yourself in the places where you might meet the best possible clients, and I thought boardrooms might be the place that would be good to feel comfortable. And then I also had an eye to what the future might look like beyond financial planning, so building up some skills as a director.

So when I left Affinity I was invited to join the holding company board, so the listed entity EQT holdings. So I've been on that board for a couple of years, and Equity Trustees provide superannuation services, which I'd been involved in some corporate trustee services. So they're often the responsible entity for some of the managed funds that many of the listeners would know. And then they also provide some traditional trustee services. So they they're the trustee for clients that have been in accidents, for example, and have disability trusts, or philanthropists who set up trusts. So that's a fascinating business and I really, really love being involved with it, and the board is spectacular. Particularly the chair, Carol Schwartz was a role model of mine, so when she was appointed to chair that board after I'd been appointed to it, it was a dream come true.

I sit on the board of a medical diagnostics company called Lumos Diagnostics, and that makes a whole range of different, mainly lateral flow assays. So most often finger prick blood tests, where you get a cassette that sucks in the blood across it, and then can diagnose a range of different illnesses. Their flagship product can differentiate between bacterial and viral infection, and the main use case for that is to reduce the incidence of over prescription of unneeded antibiotics. So that's another business that I'm very driven to the mission of the business. I also sit on the board of Greater Bank, which is one of the mutual banks. So not a shareholder owned bank like NAB or Westpac, but owned by the members. And that's been interesting. So having joined that board, subsequently we've made the decision to merge with cross town rival Newcastle Permanent. So going through a merger in a mutual organisation has been absolutely fascinating, because there's a whole lot of psychological and social issues that you need to nut out.

And then where we started, Matt, with the question around Scale Investors, that's a group of individuals who come together to invest their own capital in very early stage technology businesses that are founded by women or have significant female leadership or ownership. And that's been a really special place for me, to be honest. So when I sold my business, it was life changing, but I also felt a bit lost, if I'm honest. I'd relatively early in my life ticked off all the main milestones. All the stuff I felt I'd set as goals for myself had been ticked off, and I wasn't quite sure what my place was after that. So scale was a really unique place where there are other people around you who are highly motivated, really interesting, often who have a little bit of extra time.

So people like me who'd exited other businesses or for whatever reason had the luxury of being able to lean into some of the due diligence and research you need, if you're going to make investments in that very high risk space of venture and early stage investing. So it was a wonderful confidence builder for me, and it was one of the real unexpected pleasures being able to work with people who were outside my industry who'd had different experiences. And it wasn't like a networking thing. You were actually working substantially on doing collective due diligence on companies and doing reference checks and doing technology reviews and a whole lot of things so that collectively you could make a decision whether you wanted to invest some of your money or not.

And through that experience, it's opened so many doors for me, both cognitively, the practical understanding of technology and how it works and how it can be used in businesses, seeing up close, what ambitious founders are working on and thinking about in their business models. And then this whole new network of people that have all sorts of experiences well beyond financial services. So I was lucky enough to be invited to join the board of Scale Investors a few years ago. And then last year was asked to step into the chair role, which I was humbled to do so because our founding chair, Susan Oliver, is an enormous character and had stewarded the organisation from inception to when she decided to retire last year. So that's been a great honour.

 

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MH:
Oh, congratulations on the other promotion.

CR:
I think when you work with a full purpose organisation, you never know whether you're the one that's been slowest to step back, but it is really fabulous. I think we talk a lot about portfolio careers, and that's one of the real benefits of having something other than a full-time executive role. You can make things fit together and invest a bit more time when there's an organisation that needs a bit more of your attention.

MH:
The concept of a club or an investment club isn't particularly well known in Australia. They're popping up here and there. But do you want to just talk a little bit about how it's different, I guess, to a traditional, say, VC model?

CR:
So with a venture capital fund, typically what you do is you identify someone that you think has got the capacity to make good investment judgments, and you delegate all of the investment making decision to them. So you find a good fund manager like the team at Square Peg or Blackbird, for example, and you write them a check and really you then are in their hands. They do all of the work from there, and hopefully they make some investments in early stage unlisted companies. So venture is nearly always companies before they've got to the point that they're listed and have liquidity. And you're hoping that over the span of 4 to 10 years they'll invest that money and then find ways to derive value mainly through exits, either through a trade sale or through listing. We call it an angel network or a syndicate.

That's different because you're basically becoming the investment manager yourself. So saying collectively we're crowdsourcing the decision making amongst ourselves rather than delegating that decision. And the real magic in it is finding that diversity of thought and experience that allows you to make good decisions. So Scale does have an executive team and the executive team certainly does a lot of the work, what we call curating the funnel. There's hundreds and hundreds of great women led businesses, but not that many of them will have the capacity to genuinely scale to something that has possible global significance. And the reason that that's important is it's very, very high risk. There's a probability that most businesses will fail, so if you're going to be investing in that very early stage, you need to have the aspiration that it can really grow to probably 10 X what you put in.

So there's a team at scale that help narrow that down from all of the women led businesses that want funding to the smaller subset that we think we can be most helpful to and we think that have the capacity to scale, and then collectively the group of investors do the research and think about what investments we want to make. We don't all invest in every single deal. So you can decide amongst the group whether this is one for you or not. But increasingly I think we're probably recognising that it's better to invest smaller amounts of money in more deals rather than investing in the very best one thinking that you can pick the Facebook or the Google or the Uber out of all of the deals that you see, because lots of it is hard work and good ideas and good execution.

Some of it's luck too, though. So you've got to have some diversity in the things that you invest in. So I think increasingly we're encouraging the investors at Scale to think about investing smaller amounts more often. And in fact we're thinking about offering our investors the capacity to pre-commit, to say we'll still be involved in the due diligence, but we'll all commit that we'll all invest a small amount in every deal that the group decides to do. So more of that thinking about the crowdsourcing of the wisdom of the crowd.

MH:
As you say, it's pretty hard to pick the next Facebook or even the next 10 X. What's your current hit rate? Are you finding it to 1 in 10, 1 in 20, 1 in 30? Which businesses go on to good success?

CR:
Look, I mean at Scale we're really happy. I mean, we've had a more than 30 X return in one of our exits, so that carries the fund, if you like, for a while. So we're pretty happy when you look at the hit rate through that lens. Having said that, we're still pretty early on in the journey. We've been around for coming up to nine years, so we've had a few moderate exits, one exceptional exit. And in terms of how many we fund, I mean, we would probably fund 1 in a 100. So in terms of scaling it down from how many we look at to ones that we actually invest in, that's a pretty small ratio. And then in terms of getting to exit, we'll probably start to see, over the next five years what that exit rate looks like. But you are usually expecting one or two to do exceptionally well, maybe three that maybe just return what was put in, and maybe five that return nothing or negative returns.

So that's why you need to have the one or two that are exceptional and make sure you don't miss out on those. And I think with venture the mantra is less about the ones that fail and more about the ones that you miss. I wasn't involved in Scale at the time, but the CEO of Scale very early on knew Melanie Perkins and was encouraging her as a female founder to come and pitch to Scale, and for whatever reason she didn't, and life would be honestly materially different for a lot of our investors if we had have put some early stage funding into Canva, given that it's tens of billions of dollars of valuation today. So it's the ones that get away as much as the ones that fail that really shape your returns.

MH:
It's amazing how many funds actually claimed were being early investors in Canva these days.

CR:
Yeah, or could have been, or were going to, or whatever, but it's like the number of people that claim they're at Woodstock. It couldn't have been that many people. But yeah, I think for us, we try and hold on to that story, to the extent that you can... Particularly if you're like me and you come from public markets, I worked in financial markets for a long time, and mostly it's about not making dumb decisions and not losing money. That's really what you focus... I felt like my job as a financial planner was mainly trying to be the guardian against clients making stupid decisions cause you never want to lose money. And that was one of the great things about playing around in venture. It was sort of like being Alice in Wonderland when everything was turned on its head.

So everything I thought I knew about the principles of good financial management felt like they were turned on its head. So I think that's... It's sort of like learning a foreign language. I think you understand your native language better when you speak a foreign language and going to work in venture was a bit like that. I felt like I understood more about financial management playing around in a totally different asset class where I was the dumbest person in the room, because lots of people had lots more experience in this than me. And I think that keeps you as a human being really connected to that feeling of being a constant learner when you go back to the beginning and go back to the start in something. So yeah, as I said, that whole experience has been really, really fabulous for me.

MH:
I can imagine. And talking to financial management, given that you are early investors, there's often no financials to speak of.

CR:
Correct. And one of the things that the Victorian government has been fabulous in supporting is investor education. So through their agency LaunchVic, they provided some funding to Scale a few years ago to develop investor education. And that's exactly right. How do you value a business if it doesn't have any cash flow and it's pretty much just a business plan and a couple of founders with an idea. So there's lots of making investments on expectation as compared to fact, and you've got to feel comfortable with that, but equally... And I'm glad that I'm married and I have a husband who's not involved in venture because he's good to keep me in check because you've got to make sure it is a small proportion of your portfolio. You can absolutely fall in love with lots and lots of good ideas and find that you invest more and more and more in highly illiquid, highly speculative investments and find that you fall into the same traps that you've been trying to warn your financial planning clients against. So it's really fun, but sometimes you can pretend that there's science when there's not much more than just intuition.

MH:
And speaking of that, what are the most important things when you're evaluating an idea or a new company? Financials obviously aren't there often. Is it the founders? Is it the idea? Is it the addressable market? What's most important to you?

CR:
Yeah, I think it's a combination of all those things. I think the founders and the founder resilience is probably the most important thing because most often the path to success is not linear. So the founders' determination and their capacity to be able to bounce back when things don't go their way. I think that's probably the most important thing. I think the connection that the founder has to the problem that they're solving. So why are they the person that can solve a problem that other people haven't recognised is a problem or haven't been able to solve? And that just restless energy, that they can't imagine doing anything else, and they can't lie in bed because there's more work they want to do on whatever this problem is. So I think the personal characteristics of the founder are probably the most important thing. And they really imbue the company with that culture and whatever that energy they bring to it is.

I think then the next thing is scalability. So it's great if you've got an idea, but if it's very heavily reliant on human beings, honestly, if it takes the addition of lots of additional costs for each dollar of revenue, then that's not terribly appealing given how high risk it is, and that's why you often see people very attracted to software businesses, because once you've built it, you can sell a lot of it without a lot of additional costs, so it's highly scalable. Addressable market is related to that, to the extent that you've got to have a lot of people that will buy whatever it is you're selling, if it's a highly scalable product. And then I think that the final one is just that they're being set up for success so that the founders are surrounding themselves with people who can respectfully challenge, and they're not surrounding themselves with sycophants that think that they're a genius.

And also that there's investors that have invested in a way that makes the company appealing for future investment, particularly for venture investment. So often the trajectory of an early stage business is the founder gets some money from their friends and family and they invest their own savings, and once they've proved out a minimum viable product or some sort of prototype, then they take it to people like us at Scale, they say this is a prototype and we've tested it with some early sales or some early customer feedback, and we put in a small amount of money for them to take it to the next stage. And most often that next stage is venture capital. So part of our job as investors is making sure that the company is set up in a way that later investors will find it appealing.

MH:
One of your key differentiations at Scale is obviously that you only work with or deal with female founders. I'm sure there's lots of research on it, but interested to know, do you see that as a competitive advantage?

CR:
Yeah, absolutely. So a very small proportion of venture capital is invested in women led businesses. And look, you can interrogate statistics to make them say whatever you want, but often where you have underinvestment somewhere, it means that there's overlooked opportunities. And that's certainly what we're seeing with some of the research that comes out of women led businesses. Often they're addressing markets that are not well serviced by male only teams. So they understand problems that relate to women or that maybe wouldn't be immediately obvious to male teams. Often they're not afflicted by overconfidence, which is sometimes an affliction that male only teams have. So that often means that they don't raise as much money and they're more economical in their approach. They're less likely to be extravagant, so their money goes further. A lot of research suggests then that the returns to investors are enhanced because they make the money go further.

And they build really strong teams, and because it's a often a problem that's something that's highly personal to them, they get really highly motivated teams to work with them. So all in all we are involved as investors because we think it creates a more just society to have technology and particularly decision making technology created by a diverse group of people. But also because we think that it's a great place to make returns. It's like anywhere that's underinvested, most often there's excess returns, and ultimately we expect that to be arbitraged away and in some respects we're happy to be put out of business by everyone recognising what we've already recognised, is that this is, in a high risk space, a de-risked opportunity.

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MH:
One of the hot topics at the moment, crypto. Are you investing into any crypto products or businesses?

CR:
It's funny. I have this debate with some of my director colleagues on some of the boards I sit on, and I probably would put myself in the camp of being a believer. So I think blockchain technology has a remarkable and transformational possibility in front of it. I haven't personally been an avid cryptocurrency speculator, but I think it's important to dabble a little bit here and there to get your hands dirty, to buy an NFT, see what it's about, see how it works. But I certainly have not invested any meaningful amounts in it personally. And it's interesting, in the startup world, you go through fads. So there was a period of time where everything, didn't matter what company it was, it was something something something blockchain, because it felt like everyone wanted to invest in that space. That's really dropped off.

And I think this redefinition of it being not just Bitcoin to being Web3 and thinking about the different developments of the internet age and this whole distributed technology and all of the different ways that it might be able to be used, I'm really, really fascinated by it. And again, I'm really keen to learn, and I think that the more, as you get older, you can put yourself in situations where you're forced to become familiar with something and force yourself to learn about something, the more mentally you stay agile. And I think the more it puts you in contact with people you wouldn't necessarily socialise with and puts you in contact with people with diverse views, including different age cohorts. So I think that's really important. Younger people are really attracted to blockchain technologies and I'm really keen to spend time with younger people who are really agile in that space.

MH:
I could spend hours talking about this topic. Just before we move on I've got a range of other questions, but you've got a podcast where you interview founders. Do you want to just tell us a little bit about that?

CR:
So this is part of a broader project we're doing at Scale Investors. So one of the things that is feeding into this problem of women founders not raising capital at nearly the same rates as men, it depends on where you're taking the study from and over what time period, but it's 10%, probably, or less of early stage capital is invested in women led teams. So that education piece about how do you make sure you're investment ready? How do you know, actually, whether it's a good idea to raise capital and where you should raise it from? So we've received some federal government funding to build a programme which is about educating women founders. And part of that is a podcast called Connect to Capital, which I currently host. And we're actually interviewing investors, so mainly VC managers that we talked about earlier, so professional investors, but some other angels as well. And it's really so that... We often say to founders, "Make sure you do a lot of due diligence on your potential investors, and that they'll be the right people to be invested with for a long time."

So we talk about venture investing, being a bit like a marriage. You take a check from someone and then they're sitting as a part owner of your business for up to 10 or more years. So you want to make sure that you really like them and that they share your values and that they're not going to engage in behaviours that are destructive to your potential business value. And it's actually really, really hard to do that if you need the cash and you don't have lots of options. So one of the ways that we're tackling that problem is to profile what we feel are really great investors. So if you're a founder of any type, particularly a woman founder, listening to a person talk for half an hour, an hour about their personal story helps you make your mind up if that's the person you'd love to have an as an investor in your business. So that's what we're using it as part of a holistic education piece for founders.

MH:
Excellent. I'll be definitely adding that to my watch list. Catherine, before we go, chatting to a number of people in the industry they're considering diversifying, I guess, from their day job and looking at some of the things that you've talked about, but the question often comes up around what, what is the role of a non-executive director? How can you have influence as a non-executive director? And also the differences between profit and not-for-profit boards. Love just to get some thoughts on that before we go.

CR:
Yeah, so I do think it's a really important role. And as I said, it was great to experience it myself from the other side first, to feel the value that was created for me as a business owner by having directors who didn't have really a stake in the business but wanted to see the business thrive. I think you stop doing the doing as a non-executive director. You can't actually get in and create frameworks or templates or hold meetings, or do any of the things that you might do if you were the CFO or the CEO of a business. And it's really different because it's collective. So you don't personally do anything, really. You can have an input to the broader committee or board making a collective decision.

And I think you have to have really exhausted your desire for that hands on executive work before you move to non-executive roles, because I think that can be one of the things that can be frustrating if you have board members who actually are trying to get in and run the business. I think in my mind the most important thing that boards can do is help management teams take a step back from the day to day doing and reflect on why they're doing it and reflect on the longer term horizon. So I think, especially at the moment, there's just been this incredible intensity of urgent work that needs to be done. And I always talk about, it's lots of focus on making sure that the car is going as fast as possible, and the board's role is to make sure that you're driving the car in the right direction and not driving it off a cliff. So it's great to have a fantastically performing car, but you're all dead at the bottom of the mountain if you've driven off a cliff.

So I think from my perspective, I did have a little bit of experience with a not-for-profit organisation on their board. That was the first board that I joined before then joining a superannuation trustee board. I think if you're a full-time executive, probably one board is the most that you can handle. So sometimes a not-for-profit board is a good spot because it won't conflict with your day job. But it is a position of enormous responsibility and risk, frankly. So you take on effectively all the liability of the company. So you really have to make sure that you can trust the management team, that there's reporting that comes to the board that has the level of transparency to give you confidence that what's going on, and that you can trust what the management team is telling you corresponds to what that reporting is telling you.

And I think, if I'm honest, not-for-profit boards often have significantly less in the way of governance support. So in terms of company secretary and management reporting and that sort of thing, because often they're resource constrained. So while sometimes not-for-profit boards can seem appealing, especially if they have a really noble mission. I think it's one of those things you need to make sure you have your eyes wide open in terms of how much time they will consume and what disciplines are in place and also that your fellow directors are there for the right reasons and are able to invest the right amount of time and energy into the organisation.

And then if you really like that, and as I said, if the desire to be doing it and implementing yourself is something that you've moved beyond, then then full time non-executive work. If you're still in the stage where you want to earn money, then for profit companies are absolutely something that... In my mind, this is the most fun I've ever had working. It's just been lots of variety, lots of opportunity to really feed your curiosity and to learn, and lots of opportunity to sit alongside someone and both look at the same information and assess the same issue and come to completely different conclusions and have completely different perspectives. And that is just the most rewarding experience because when you have the opportunity to have your own opinion shaped by other people who are super motivated, intelligent, experienced people, that's just such a privilege. So yeah, it's fabulous work and I think it's important work.

MH:
And given the variety running through your current portfolio from medical devices through to superannuation trustees and financial services to Scale Investors, do you need to be an expert in the field before you join a board, or is it very much about the governance, the structure, the strategy, and learning then on the job?

CR:
Yeah, it's really interesting. So I'm lucky enough to be participating this year in the AICD chairs mentoring programme. So they match directors who were relatively early in their journey like me with a very experienced ASX 200 chair. And part of why I wanted to be involved in the programme is to do exactly what you're saying, is move beyond being a subject matter expert director to being an expert director and having transferable skills across multiple different domains. And I think you see that in the very best and most respected directors, they can add value to a company in any different industry. So long as they feel passionate about the sector and the company. So I do think in some respects, your subject matter expertise gets stale really, really quickly.

So you don't need to have stopped being a financial planner or a heart surgeon or a tax practitioner for more than six to 12 months and your skills are no longer entirely contemporary. So you can't rely on just being a subject matter expert on a board. The three things I think you really need to bring to all of your board roles are insight, judgement , and also network. So help to connect your fellow directors, and more importantly, you management team to the expertise that they need. And I think in lots of ways, my experience with Lumos, which is so far outside my background, it's been helpful to appreciate those things that are transferable.

And then obviously you need to get to know the operational area of the business pretty quickly, but as you say, the capacity to think more broadly about strategy, and I think also the capacity to bring insights from other industries actually is really valuable. Because your management, team's always going to know more about their particular business and the industry than the new ever will because your skills won't be contemporary because you're not sitting in the business all the time and even if you've got the time, you shouldn't be sitting in the business all the time because you're an independent non-executive director and you're supposed to have that higher level of perspective, because you've got that distance.

MH:
And for those sort that are thinking about taking on a board role, either profit or not-for-profit, what advice would you have?

CR:
Think about why you want to do it. So I think it is actually a high risk, and in terms of... In some respects it can seem like a good financial choice because you might be on a board that pays you X dollars and you only have to go to six or eight meetings a year and you think, "How hard could that be?" But I think you are taking that ultimate fiduciary responsibility on, so you have to be able to make yourself available when crises emerge and where there's peak surge capacity. So asking yourself why I want to do it, do I have the time to commit to it?

And then I think I would talk to a whole range of different people who do have experiences as a director and ask them what they think the pros and cons are. And then I think engage in some training. So the AICD has a range of different training courses and there's certainly some really good... And in fact, I've just engaged in a course at MIT called the digital savvy director's course, which is uplifting director skills in digital domains. So there's lots of ways to build your skills as a director.

MH:
Fantastic. Catherine, we're going to run out of time any minute now, but before you go, like me, you're a tech and also fitness nut, and I'd love to know what your favourite fitness device is at the moment.

CR:
So you and I both are avid Oura Ring wearer's, Matt, so I think sleep is a real enabler. I think if you invest in getting good quality sleep, as well as enough sleep, then that really makes a lot of the rest of your life work well, so you can exercise more effectively and think better and make better choices and have better self control. So I think self control is one of those things that also compounds over time. I really like the idea of habits and good decisions. If you make small good decisions often enough, they compound into really good outcomes.

The high intervention thing that I really like doing is cryotherapy. So that's where you go and lock yourself in a super chilled room for three minutes. Negative 110 in your swimmers for three minutes. And that's that the most euphoric I reckon I feel in any point of the week. After you do that you just feel fantastic. I think it's one of those areas I'm happy to spend time and money, because again, I think it allows you to be a better contributor in all the things you do in your life, as well as being good company if you feel good in yourself.

MH:
It's interesting you say that. Anyone that's spoken to me for at least the last couple of years will have been bored listening to me talk about sleep, so I'm glad I'm not alone.

CR:
Well, it's funny, I was listening to an athlete... I listen to a podcast by Peter Attia, and he was interviewing a very well known long distance runner, and he was saying, "Oh, I don't feel like I competed for my country. I feel like I slept for my country." To perform at world champion level, you just had to sleep and sleep and sleep. And I was like, "Oh, that sounds like me." If that's the performance there, I'm happy to take it.

MH:
Maybe before we put people to sleep talking about sleep, we might finish there. Catherine, thanks so much. Absolutely love that podcast. Really good chatting to you as always, and I look forward to catching up soon.

CR:
Fantastic. Thanks, Matt. Really enjoyed it too.