Xero is a young company with a clear mission: to become a global leader in on-line (read: cloud-based) accounting systems. While the company has some pretty serious competition, its stellar rise on the stock-market and ebullient CEO has seen it enter the consciousness of the general public in New Zealand, Australia and, increasingly, other countries as well.
Part of the company's success appears to be due to its mature and considered approach to governance, and succession in the boardroom in particular. Phil Norman was appointed to the chair prior to the company being listed. Phil is a startup specialist, he got the company underway. Subsequently, Phil was replaced by Sam Knowles who established Kiwibank and grew it to become a viable player in the New Zealand market. Sam, who chaired the Xero board through the company's initial expansion beyond New Zealand, oversaw the repositioning of the company, from a great little company from Wellington New Zealand (where?) to a growing global company. Recently, Sam left the board to be replaced by Chris Liddell. Chris has had a long and successful leadership career in large companies including General Motors, Microsoft and International Paper. He lives in New York and is well connected with the movers and shakers there. Two independent directors have just been appointed—San Francisco-based Bill Veghte and Australian-based Lee Hatton. Hatton is Xero's first female director. Both will bring a fresh perspective no doubt.
With the benefit of hindsight, it is easy to see that these appointments have been considered and intentional. Xero has sought specific individuals with specific capabilities to provide leadership in the boardroom. As new capabilities and connections have been required, changes have been made. Xero is trying to become a world-class company. If it succeeds (and even if it falls short), I suspect a future generation of MBA researchers will identify governance quality and succession in the boardroom will have been important building blocks. Regardless of how it plays out, startups and more mature companies would be well advised to take a look at Xero. The company's approach to leadership, governance and succession is refreshing.
Disclosure: While I am known to some current and former members of the Xero board, I do not own shares and do not have any commercial relationship with the company.
Thoughts on corporate governance, strategy and effective board practice; our place in the world; and, other things that catch my attention.