Hanneke Smits is CEO of BNY Mellon Investment Management and a member of BNY Mellon’s Executive Committee. Prior to this, she was CEO of Newton Investment Management, served on the Executive Committee at private equity firm Adams Street Partners, and was a non-executive director to the Court of the Bank of England. In addition, Hanneke is a member of The Investment Association’s board, the chair of Impetus, a venture philanthropy organization which backs charities to transform the lives of disadvantaged young people, and a trustee of the Education Endowment Foundation.
What’s one board-level lesson you’ve learnt from the pandemic?
That we can operate and engage with one another in newer, and perhaps in better ways than before.
I took on the role of CEO of BNY Mellon Investment Management in mid-2020, which meant that I couldn’t follow the pre-pandemic “standard operating procedure” and go meet everyone on a round-the-globe tour. Instead, we had to do it all virtually — and, in hindsight, it probably should have been the default way to do it long before the pandemic. I was able to meet many more clients and colleagues than I would have been able to physically see, and it also gave me the freedom to bring together attendees according to the discussion rather than the location.
Not being in a room together didn’t mean it all had to be remote, either. Instead, it was an opportunity to try out different meeting settings and styles. For example, when we were in the process of finding a new CEO for Impetus, the candidates and I went on walks and found that it allowed for easier, more natural conversations than the formal exchanges you often get when sitting around a table. So much so that we continued having these walks after the new CEO was hired, and made them part of the onboarding.
“So far, there’s been a tendency to only look at operations, find out that productivity hasn’t decreased when employees went remote, and call the experience a success. But what about everything else?”
So, I’m certainly not one to advocate that we should go back to the old “normal”. Where I am concerned, however, is around how we assess the impact that these new ways are having as a whole. So far, there’s been a tendency to only look at operations, find out that productivity hasn’t decreased when employees went remote, and call the experience a success. But what about everything else? Long term, this will affect our culture, our ethics, our compliance, the way we treat our clients as well as our colleagues… and boards should be discussing their information requirements to allow them to monitor these developments closely.
How can boards keep tabs on these cultural changes and influence them for the better?
There’s no one-size-fits-all answer, because there is more than one way to think about culture. In our case, we actively try to preserve the uniqueness of each of our investment firms, because they each think in different ways, attract different people, and therefore view investments through different lenses — which helps us diversify more effectively than by just buying different asset classes.
In that sense, then, one of the key questions that boards should ask, is: “Is our culture giving rise to uniqueness of thought and creativity of ideas?” And when answering it, they should review whether they’re making use of all the available levers at their disposals — because if you want good ideas to bubble up to the top, you don’t just need a culture where people speak up, you also need one where people are listened to, and you should be acting on both fronts.
“If you want good ideas to bubble up to the top, you don’t just need a culture where people speak up, you also need one where people are listened to, and you should be acting on both fronts.”
Nurturing and maintaining such a culture is very much the responsibility of the executive team, and so is regularly reporting on it to the board. But it’s the board’s job to allocate sufficient discussion time to these matters to ensure that they don’t fall by the wayside.
Many organisations are saying that agility is top of their agenda for 2022. What’s motivating this?
Agility has been a theme for some time, but the past few years and months have undoubtedly brought a renewed sense of urgency around it amongst boards: rigid decision-making frameworks just won’t do when navigating lockdown uncertainty, supply chain challenges, or military invasions and their related economics sanctions.
“Rigid decision-making frameworks just won’t do when navigating lockdown uncertainty, supply chain challenges, or military invasions.”
Agility is about being able to react faster to these external events by changing how decisions are made internally. You can’t react quickly enough if your only modus operandi is just to escalate problems all the way to the board; the board has an important role to play but you also need to equip people at all echelons with the tools and process that they need to make the right decisions themselves.
What’s the one item that should be on every board’s agenda?
ESG, Environmental, Social, and Governance — and, within that very broad term, climate change especially. It’s an incredibly complex topic, with a regulatory environment that keeps evolving at a fast pace, and every board needs training that can help break down what it’ll mean for their organisation in the long term.
Boards often treat it as a separate agenda item. ESG information is on one side of the board pack; financial information on the other side — and the discussion ends up not linking the two. Boards need to be discussing this topic and asking themselves questions such as whether metrics can be combined into a single set.
“ESG information is on one side of the board pack; financial information on the other side — and the discussion ends up not linking the two.”
What book is on your bedside table?
Antwerp: The Glory Years, by Michael Pye. It’s a look back at the 16th century, when the Flemish city of Antwerp enters its golden age and becomes a European powerhouse.
I try to always have a few books on the go — one that makes for a lighter read, and one or two about history — and I’ll switch between them depending on my energy level on the day.
What is your Golden Rule?
Be prepared — and, in doing so, help your directors be prepared too.
I’ve seen too many boards where lack of preparation ahead of the meeting — especially around the board papers — weighs the discussion down: the “ask” isn’t clear, most of the information provided isn’t needed, and board members aren’t quite sure what it is that they should focus on. So, put the work in beforehand — because it’s the only way you’ll make the most of your board.