Tony Carter: 6+3 years for Directors, At least 5 years for CEOs

Tony Carter, Chair of Air New Zealand and a director of Fletcher Building and ANZ Bank, spoke at an Institute of Directors function recently.

I was interested in his comment that a CEO really should stay leading an organisation for at least 5 years – otherwise it may reflect the fit was not right.

He also spoke about terms for directors. He was seeing directors typically appointed for 3 + 3 + a final 3 year term. There would be a review after the first 3 year period to check the contribution and the experience were adding value to both. Then at the 6 years mark there would be a more in depth consideration, and if the director was adding significant value that is not easily replaced they would complete one final term. However 9 years was it. The renewal benefits meant change at this point was important.

I think this is a great model for local government. It really takes two terms for a Mayor to gain control effective control of a council, develop the plans needed, begin implementation and start to reap the (hopefully) benefits. This is particularly the case given the triennal 10 year budget process is completed until half way through the first 3 year term.

For many years I’ve used the phrase “It is what it is” to help focus teams on dealing with immediate challenges and focusing them on planning the next steps. Tony uses a similar turn: “We are where we are”.

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