Today, BoardPro would like to introduce Craig Richardson, the co-founder of Faraday, a prominent advisory Board and executive learning service in New Zealand. With years of international experience as a non-executive director, CFO and CEO, Richardson has accumulated well over 15 years of traditional and advisory Board experience, lending his expertise to dozens of Boards and organisations.
He has led and advised many companies, from start-ups to multinationals, in many services such as technology, manufacturing, consumer goods, resources and defence.
Among his vast experience, Richardson has held senior positions in companies such as BHP, BlueScope Steel, Vodafone and Coca-Cola Amatil. Today, he is the co-founder and executive director of Faraday and the Advisory Board Chair of six companies. He is also CEO of healthcare startup Autonomy which specialises in undoing diseases of modern life.
Faraday manages and establishes professional advisory Boards to help companies lift their business performance. The company helps directors, owners, and managers understand and solve their strategy, organisation and ownership problems led by professionals in their field. For them, the purpose of having an advisory board is to create value in whatever aspect of your business that matters the most.
We have asked Richardson a few questions about professional advisory Boards, including considerations before hiring an advisory Board, how internal work can be monitored, and how companies choose the right advisory Board for them.
Here is what he had to say.
Q: In your experience, at what stage do people reach out to advisory Boards for help?
There are natural and predictable make-or-break points in the business lifecycle that slow or reverse a company's economic mobility. At these stages, directors and business owners typically don’t fully understand their situation and can’t, therefore, predict the likely outcome of their actions. It’s usually at this stage they look for advice, and increasingly, that advice is coming in the form of professional advisory Boards who can understand the problem and dramatically increase the universe of knowledge available to businesses to solve it.
Q: In what field do you advise? Is there a field where you tackle more than others?
The proven professional advisory Board model Faraday teaches and implements has been successful across industries and business lifecycle stages. We have seen exceptional results in start-ups, SMEs, large companies and family offices. The model we have developed is descriptive rather than prescriptive, and its success is a product of the quality of advisors it attracts and the process we follow to solve problems.
Q: How do you monitor how effective your services are?
Unlike traditional governance Boards, professional advisory Boards established and managed by Faraday chairs continuously measure performance and outcomes. The problems the advisory Board will solve are clearly defined, and once that problem is solved, the advisors are refreshed to solve the next problem. The objective is to create economic mobility and shift the business toward upper quintile performance through a combination of moves that have a quantifiable impact.
Q: How close do Boards get with their chosen advisory Board?/ how much information do they share with you?
Most of our clients have directors (often shareholder-employees), and about 30% have fully functioning traditional governance Boards. The relationship the advisory Board has with the governance Board is agreed upon in the advisory Board charter during its establishment. It's important to understand advisory Boards do not make decisions; that remains the function of the traditional governance Board. In our experience, the relationship has been symbiotic and highly productive, mostly due to clarity of the scope, recognition that advisors bring a new level of capability and exceptional results.
Q: How does one go about choosing an advisory Board? What do people look for, and how do they know an advisory Board is right for them?
Faraday follows a proven three-step process.
The first step is teaching clients the difference between governance and advisory Boards, how advisory Boards operate and what conditions are required for success. We do this in a two-hour workshop that around 500 businesses have attended in the last 3 years.
The second step is a structured 90-day starter program that reviews their governance, endowments, industry trends, strategy and current business capability.
At the end of the starter program, the business is clear on what they have, where to play, how to play, the capability they have and the capability they need to be successful. The gap determines the knowledge, skills and experience they need on the advisory Board, and we give them a selection methodology for appointing an advisory Board chair and one or two advisors.
It's important to understand that the Board (except the chair) are refreshed as each business problem is solved, and a higher level of capability is required to solve the next problem. In short, we create economic mobility and use the advisory Board to leverage it. 20% of companies in most industries capture 90% of available profit, and our objective is to make our clients one of those companies.
Q: As a BoardPro partner, please share why BoardPro’s software is such a handy tool for Boards and organisations
BoardPro is a critical tool in the orchestration and governance of professional advisory boards. It allows the secure sharing of focused information between the company and advisors, tracking of tasks across members and building a valuable, auditable history of the company's solving capability. This has proved incredibly valuable when businesses want to build confidence in their capability, raise capital or debt or are being acquired. The time it saves, the value it creates, and the problems it avoids are measured in bottom-line results and enterprise value creation. We tried competing products and simply didn’t get the functionality or support we have seen in BoardPro.
If you are interested in learning more about Faraday, check out the company’s website here. Learn more and connect with Craig Richardson here.
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