Director rotation is an art
Having joined the ranks of the unemployed this week I decided to spend my first morning digging out the drains on our front paddock.
Water supply had overwhelmed drainage capacity, resulting in a swamp that not only laughed at my piddling little shovel, but also ended up swallowing my aging Landcruiser.
An hour of my efforts to free two tons of Toyota from the vinegar-smelling gloop served only to bury the beast up to its axles so I trudged out to the road to see if I could scare up a tow.
The only vehicle to be seen was a Meridian Energy Prado driven by their civil engineer, Damien.
Damien was happy to help, and with the assistance of a strop and some battens my Cruiser soon popped out of the gloop.
If you've ever been well and truly stuck, you will appreciate the sheer joy that comes from being unstuck.
There was also an ironic sense of galactic karma going on, as I have previously penned some yeasty prose on Meridian's approach to community relations as they have gone about constructing the Mill Creek turbine farm down our valley.
To be fair Meridian responded with grace to that criticism, with CEO Mark Binns personally sorting things out.
But last Monday any actual and imagined wrongs that Meridian may have ever committed evaporated as Damien towed me out of that swamp. He was, in every sense, the right man at the right time.
Notwithstanding the many fine qualities of my good wife, for a brief period of time I could have married Damien.
The concept of the right man (or woman) in the right place at the right time also seems to be something Rod Drury has got right at Xero, as the infant terrible of the accounting software world has moved from start-up, to grown-up and fixes its sights on the American-based giants of the digital bean-counting industry.
After cutting his teeth on email database tool Aftermail in the early 2000s, Drury and the other big shareholders seem to understand the import of selecting the right basket of directorial skills at each stage of a company's growth, something that isn't always the case when it comes to appointing and retiring directors.
Xero floated on the NZX in 2007. At that stage it was chaired by Phil Norman, and had other directors of Graham Shaw, Guys Haddleton and Sam Morgan.
With a background in emerging companies and the venture capital industry, Norman was a solid choice as initial chair.
However, as Xero continued its trajectory to being a global company, it became prudent to source a more statesman-like mainstream player.
In 2010 Sam Knowles had just finished 10 years as chief executive of Kiwibank and provided a respectable business patina to the maverick Xero. Initially joining as director, by December 2010 he was chairman.
By the end of 2013, with a US listing clearly in their sights, Xero moved again to ensure it had the right people around the board table at the right time.
In February of this year two new directors joined the top table, both of whom seem fit for purpose.
Chris Liddell now chairs Xero and brings with him credible US experience as chief financial officer at General Motors and senior vice president at Microsoft. He's also more likely to challenge the strong willed Drury than the affable Knowles.
The other director who joined in February was the US-based Bill Veghte, general manager of HP's $27 billion enterprise group.
What this means is that just seven years after listing about three quarters of the board has changed, with only Morgan and Shaw surviving from the original IPO line-up.
Some may criticise the rapid turnover of board members as mercenary, but in terms of horses for courses it seems to me Drury and the other big shareholders have been adroit at getting the right people at the right time.
At the recent AGM, Xero made clear that once it had passed the US$100 million ($119 million) annualised monthly revenue figure it would look at a US listing.
Given Liddell has recent experience taking GM through a US$20b listing, it would appear that Xero is in the right hands for such a move.
A paper presented at the American Accounting Association last year suggested nine years as being the appropriate tenure for directors actually providing value, a figure that struck me as fairly self-serving at the time.
I reckon for fast-moving growth companies, it's likely to be a lot shorter. More like half that and likely involve a few less accountants.
Apart from appointing chief executives, the other two key roles of a good board are to provide meaningful governance in terms of risk and opportunity, and help set the strategy and monitor its implementation.
Hopefully examples like Xero might make other companies look more carefully to see if they have the right people at their top table to carry out these duties, and take a fresh look at tenure periods.
Apart from sheer stupidity, the main reason I got stuck on Monday is I had the wrong tyres for the job, so slipped backwards instead of going forward.
The same is likely to be true of companies with the wrong directors for the challenge in front of them.
Mike "MOD" O'Donnell is a professional director and growth manager. His Twitter handle is modsta and he's currently after a set of 16 inch mud grips. Disclosure of interest - MOD is a shareholder in both Xero and Meridian Energy.