Debby Blakey: The new look of leadership

HESTA chief executive Debby Blakey is already seeing the benefits of building an internal equities team.

With its in-house Australian equities team now active and plans to include fixed interest and cash later this year, Blakey calls the internalisation program a "truly clarifying event."

The head of the $68 billion industry fund for health workers says the internal asset management team is bringing the fund closer to capital markets, with its bottom-up company insights improving decision-making while also achieving cost efficiencies.

"As a very long-horizon investor, bringing this market intelligence to the table helps us make smart investment decisions and identify that next wave of successful companies."

Blakey is aiming for a combination of in-house investment management and external managers.

"We have terrific relationships with some very long-term asset managers who will continue to be key partners," she said.

Interestingly, she argues that managing a portfolio of assets directly further improves those partnership relationships.

She should know. HESTA was on the UN PRI leader group (global) in 2019 for setting and monitoring external managers.

Importantly, Blakey's direct equities team can more easily see carbon pressure points and opportunities in the broader portfolio.

"I think having this internal team managing equities one floor above where I sit has brought a sharper focus to the concept of a low carbon future and possibly given us more confidence about what we stand for."

Companies have already set longer-term milestones on the pathway to net-zero by 2050.

Blakey cautions that members want to keep seeing progress. While 2050 was a long-term goal, the fund is sharpening its focus on 2030. "That's the first target, and we need clarity on how we plan to deliver net-zero targets along the way," she adds.

Taking a stand

Formulating strong views and acting on them is a hallmark of Blakey's leadership style.

She has long been vocal on many social, political, and moral issues arguing that super funds should take a stand, saying now is the time for investors to act.

"I feel so strongly that this is the time to get ahead of the carbon tsunami that will hit if we don't deal with net-zero this decade," she says

"After 2030, we leave enormous problems for the next generation, and I think we are better than that."

HESTA's more than 900,000 members are passionate about the fund taking a leadership role in many social impact initiatives, specifically climate change and gender equality.

Blakey fervently believes that investing with impact helps super funds engage with members at a much younger age. In her view, ensuring their super is a force for good matters to their own identity and how they see themselves in the world.

Vital to engaging younger members, funds must put these words into action.

"These members are very focused and passionate," she notes.

"If you have promised them their voice will be heard, they need to experience this. Or, they will leave."

Addressing persisting gender inequity is another hot-button issue for Blakey, who wants to see the next government take urgent action to prioritise gender equality and create an inclusive and diverse workplace.

Comments from Canberra are anything but clear on the future of women and super.

Blindspot

The HESTA chief executive says Australia's retirement system has a blind spot when it comes to women and urges the incoming government to act swiftly to deliver reforms that will address long-standing gender inequities that ensure women retire with 30 to 40 percent less super than men.

"There is an enormous opportunity for us as super funds to be gutsy advocates for the equity agenda to help women face the future with confidence and make good decisions.

"We've recently announced our policy priorities for the next term of government, which include paying super on paid parental leave, a super carer's credit to re-build the balances of those taking unpaid parental leave, and universally accessible, affordable childcare."

She is also calling on more listed companies to sign up for the investor-led program 40:40 Vision which seeks to revamp how the ASX 200 companies build their executive teams and run their businesses.

A year after the launch, 17 companies - representing close to 25 percent of the market capitalisation of all ASX 200 companies - have signed up to help achieve gender balance in executive leadership.

While conceding that Australia needs to do more to improve gender equality, she concludes that the $6.3 trillion in funds under management and advice supporting the 40:40 Vision gives investors a real opportunity to work on gender diversity at the executive level.

Blakey points to Bankwest Curtin Economics Centre and Workplace Gender Equality Agency research showing a 10 percent or more increase in the share of female 'top-tier' managers led to a 6.6 percent increase in the market value of Australian ASX-listed companies.

She claims that a culture of inclusion would help companies avoid reputational issues, especially those related to sexual harassment. "I believe that a very inclusive and broad executive team would have a different way of looking at these issues and make better decisions."

Leadership has shifted

Meanwhile, her leadership focus has shifted in the last year or so.

"A large part of what we do as leaders is about influence which has become increasingly evident through Covid," she adds.

According to Blakey, the role of a chief executive is so much more about leadership and less about management, which is very significant.

"As a leader, the rise of remote and hybrid working has made me even more conscious of the need for our employees to feel connected to and inspired by our purpose and vision for the future.

"Our shared goal is to protect and grow our members' retirement savings, ensuring they have the brightest financial future possible while also having a lasting and positive impact on the world. It's why more than ever I've been very focused on helping our people connect the impact they can have with the broader benefit we're creating for members."

For leaders like Blakey, a commitment to responsible investment is fundamental to attracting and retaining top talent.

The biggest shift she's seeing is how central purpose is to why people choose to work at HESTA.

"People want to work for an organisation with a clear purpose, which links to the work they do so they have a sense that they are part of something bigger and that the work they do every day has a meaningful impact," she says.

"Moreover, if you don't have a strong purpose and meaning for what the company is doing, you're not going to attract and retain top talent.

"As we emerge from Covid-19, we need strong leadership, which, in turn, attracts strong talent."