Making the leap from executive to chair

Harvey Kalman resigned from his job as a top executive of Equity Trustees after 21 years and joined the $1 billion Raiz Invest as chair. Now sitting on half a dozen boards now, he discusses making the leap from executive to a highly effective and sought-after director.

What triggered your decision to quit your job as an executive at Equity Trustees and move to non-executive roles?

I reevaluated my priorities when the pandemic hit. For me, a job is necessary for my mental and financial health, but I figured I could do things differently after being in a job for 21 years, and now is the right time to take advantage of that. Plus, I couldn't travel and mine was a global role at Equity Trustees.

I wanted to stay in the industry but focus on southeast Asia and Asia because that region is the growth engine.

I have received multiple different opportunities to move to the next phase of my career, but interestingly, the non-executive side began to really open up. I could see where I could use the skills and insights I developed at Equity Trustees. I'm on half a dozen boards joining all except one in the last three months. I sit on two not-for-profit boards and have picked up three boutique fund managers and two fintechs.

As a responsible entity expert, I'm good at solving problems and finding solutions for rules-based compliance regulations. I can probably solve most problems either because I've experienced them or can I have enough knowledge to identify someone who can help and get what is needed before bringing everyone into the tent to solve the problem.

Why did you choose fintechs and start-ups? Are they more exciting?

They should be more exciting because of the hype associated with them but the reality is they're no different from any other board. I wear a suit and tie for meetings and I'm the only one who does. It's my uniform. This sets me in the right headspace and I operate accordingly.

When you're looking at the company boards to join, it's the underlying business that excites you, not because someone brands it a fintech.

I knew the Raiz Invest founder very well and had followed his career but hadn't realised exactly what he had achieved with the app until I started investing with it. Then I saw that it was brilliant not just because of what it does but also because of the markets it is selling in.

Anyone can set up an app, but very few people can attract 500,000 active clients and $1 billion of managed funds. Raiz is in Australia and southeast Asia - one of the biggest growth areas for non-compulsory savings.

I loved what I saw. Then, it became about understanding the fiduciary requirements inside the company to deliver on what investors expect. Consumers want the person running the fiduciary component of that company to be above reproach and ensure that money exists when they want to access it.

I will soon chair another fintech that connects the fund managers' websites to their registries electronically. This helps solves the AML/CTF, KYC problem as well as the DDO (design and distribution obligation) which came into force last quarter.

What do you bring to a board?

I'm the new kid on the block with most of my boards, so I come with a fresh pair of eyes. 

Companies hire me for my unique governance background, my unique fiduciary background as well as my network. I have 6000 LinkedIn connections.

I bring a strong sense of fiduciary and corporate governance to each position. It's important as best interest versus self-interest is not regulated, and at times there will be conflicts of interest. These have to be disclosed. We can then work through the issues and check that everyone is on the same page. 

Boards must ensure a diversity of opinion and experiences as 'Methink' or 'Followthink' doesn't work well when a complex situation arises. You need people around the table to help you solve the problem. 

Being flexible and being able to multitask is what every good director brings to the table. However, in some circumstances, boards just need directors who know their space very well because that's the skill set or that part of the matrix they're trying to complete. Having a good skills matrix ensures you don't get the Groupthink and you can foster a safe environment where people are free to challenge opinions.

Fintechs are different because they don't have the same staff numbers or HR support as larger companies, so everyone has to be educated on how culture and people work in different environments. With multiple locations such as those in Malaysia, Indonesia, Thailand, and Australia, culture and operations become more complex as local culture, including local corporate culture, need to be taken into consideration.

How do you choose the right board to join? What are the challenges?

You want a board that helps you grow as that becomes part of a career progression. To get there though, you have to start understanding how a board operates, so joining a not-for-profit or local cricket club board is not a bad place to start as you learn board procedure and understand how to work with others when you don't control the agenda.

The biggest thing about being on a board as a non-executive is just that. You're not an executive. You don't have a casting vote. I'm one of several directors, and my job is not to make decisions but to chair the meeting and ensure the issues are fleshed out and moved to resolution.

Just because you are chair doesn't mean you are top dog - you are just another director. As I see it, the chair's role is to facilitate the conversation to enable good decisions rather than bad decisions in the best interest of the staff, shareholders, and the community in which we operate. Sometimes, it's a balancing act between these three stakeholders.