That the financial crisis was a challenging time for business – with stricken banks and failing companies – is a gross understatement. But adversity also offers opportunity.

‘It is often said that the best time to start any business is in a recession, or in times of stress. In the aircraft leasing industry it has definitely been a fruitful strategy,’ says Dómhnal Slattery, CEO of aircraft leasing firm Avolon and the keynote speaker at this year’s Governance Ireland Conference.

Here, Slattery speaks to Henry Ker, editor, Governance and Compliance about how he built that success, and gives an insight into his views on what makes an effective board, how quality non-executives should be active but not invasive, and how the importance of getting corporate culture right should be blindingly obvious.

What do you think has been the key driver of the company’s success?

I think it was a trilogy of events that enabled us to be successful. The first is the timing was absolutely opportune. But you still needed to have the vision to realise that.

The second is the intellectual resources: we had the people. We had a team of world class professionals that I brought together as part of the founding executive team. All bar one are still with us today.

The third thing was we had significant equity. I believe we were the largest funded start-up in the world that year, in any sector, with a total equity capital committed of $750 million. That is a big number in anyone’s game.

It was the combination of those three things, but even then the ability to pull them together required experience, track record, credibility, network, and tenacity – even naivety at times. The characteristics you look for in successful start-up businesses.

The theme for Governance Ireland this year is ‘leading board development’. For you, what is the key to a successful board?

I have sat on all different kinds of boards: NGOs [non-governmental organisations], university foundations, public companies, large private companies and the Avolon board. I have seen the good, the bad and the ugly of boards. If one was writing the rulebook for what ‘great’ looks like for boards, there are several things you have to seek out.

Number one. Start with the top. You need the diversity, but not just gender diversity. Often people think diversity just equates to gender balance. That is, of course, a very important part of it, but diversity is more than that, it is about diverse thinking, background and capabilities. One great danger for boards is group-think.  In promoting a diverse board, it is also important to avoid a situation where ‘everyone looks different but thinks alike’.

Number two. I believe that board members who are financially aligned with the company are better board members. Either they have money invested in the company or a significant part of their compensation is in the form of equity. They then have ‘skin in the game’: the decisions they are making have a direct correlation to their wallet.

Number three. You need to have a board with a strong chairman of the nominations and governance committee. In the past, that committee might have been perceived as less important: the brightest person got the audit committee, the next brightest got the remuneration or risk committee, and then the nominations and governance committee was given to the quiet guy in the corner.

As CEO, a big part of my job is performance management of myself and the people who work in my company. There are rigorous targets and performance appraisals. But there are few boards who do the same for themselves as thoroughly and credibly self-assess.

Number four, tenure on a board is really important. There is a period of time at which a board member becomes too close and too aligned with the company. They lose the independence and necessary challenge.

There is definitely a threshold of ‘vintage’ that says if you have been here for more than X years, it is time for you to move on. But few boards rigorously pursue that.

Finally, the nature of the relationship between the chair and the CEO is absolutely key. The dynamic of that relationship has to be solid, deep and trusting, and they should not be one and the same person. I fundamentally disagree with the US approach in that regard – where both offices are often held by the one individual.

You can read the full interview with Dómhnal on the Governance and Compliance website

Dómhnal Slattery is delivering the keynote address at the Governance Ireland Conference 2018: Leading Board Development. For more information or to book your place, visit the CGIUKI conference website