In this episode, hosts Alexandra Bolton and Matthew Moss are joined by board director Tina Mavraki. Tina is an IoD Chartered Portfolio Director and sustainability advocate with a diverse NED portfolio, including Metlen Energy & Metals and First Bauxite LLC. Her 26-year executive career spans capital markets, investment management, and global supply chains at firms like Morgan Stanley and Citi. Tina has advised on climate policy, offering governance recommendations to the FCA and EBA on climate transition and executive remuneration.
This episode explores Tina’s transition from executive to non-executive roles and how she learned from governance failures early in her career. The conversation addresses the challenges and opportunities in implementing sustainability within high-emission sectors, emphasising the financial materiality of climate change and the necessity for collaboration and engagement amongst stakeholders to drive meaningful action in the boardroom.
For more information on what we do, visit climate-governance.org.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hello and welcome to Directors Dialogues from the
Climate Governance Initiative,where we lift the lid on the
different ways that companyboard members are speaking up
for climate in their boardrooms.
In each episode we meet aclimate champion who's been
leading or nudging or badgeringtheir boardroom colleagues
towards climate-friendlypolicies and practices.
I'm Alexandra Bolton.
Speaker 2 (00:17):
And I'm Matthew Moss is Tina Mavracki, a fabulously
experienced board director andstrategic advisor with also an
executive career behind herspanning more than two decades.
In her executive career she'sworked with global capital
markets investment management.
She's worked up and down thesupply chain in C suite
(00:40):
positions.
Her executive career haslargely been with Morgan Stanley
and with Citi.
She's advised organisationsthat have included the state of
Maharashtra in India onrenewable policy and solar
tariffs, and listeners who haveheard our interview with
Shailesh Haribakti will rememberhow important energy policy is
(01:03):
in that part of the world.
Tina's NED portfolio includesenergy and metals.
Her advisory portfolio coversbanking debt funds, the European
Bank for Reconstruction andDevelopment and the Children's
Investment Fund Foundation Inclimate policy advisory.
Importantly and we'll come tothis later Tina produced
(01:25):
governance recommendations forclimate transition and for
executive remuneration for theUK's Financial Conduct Authority
and for the European BankingAuthority, so couldn't be a
better person for us to betalking to, tina, welcome.
Speaker 3 (01:44):
What a delight to be with you.
Thank you so much, and thankyou so much for the amazing work
that CGI has been doing aroundthe world.
So I can't wait to get startedwith you and get into the weeds
of how things get done, howthings don't get done and what
we could do to progress theirconversations on their boards
and their advisory capacities.
Speaker 2 (02:05):
Brilliant, thank you.
So we want our listeners tounderstand a little bit more
about you before we get into thebigger questions.
So, thinking back to your firstjob, tell us something that
sticks in your mind as to howthat job might have influenced
you as you develop your career.
Speaker 3 (02:25):
Absolutely.
As I think back into my career,obviously no career is
successful unless there'stenacity and perseverance and
hard work.
That is obvious.
But the beginning of my careerwas marked by a series of
governance failures.
(02:46):
So back then in 1998, we hadRussia default on its debts and
the long term capital managementfund blowing up.
Since then I've experiencedanother three big governance
failures in my career and thatkind of sparked a natural
(03:09):
curiosity about what is it aboutall these things?
What is the common thread, whatam I learning, what should I be
learning, what am I notlearning and what do I do going
forward?
So you brought me back to 98.
I was counting only three biggovernance failures in my career
, but actually you're right,it's four in total.
(03:29):
So there you go.
Speaker 2 (03:31):
Wow, I wasn't quite expecting you to begin to draw
our attention to the governancefailures that were stark in your
first job.
That's quite an introduction.
When did you first becomeinterested in sustainability?
I decided to go back andretrain.
Speaker 3 (04:08):
So I got my master's in finance at London Business
School.
I met my first business partnerthere, the Indian government,
(04:29):
to understand lessons learnedfrom the European experience on
what was a first big wave ofrenewable investments, feeding
tariffs and the whole excitementaround what was a start in a
big trend.
So that's what started mycareer in sustainability, which
was then solidified with mytimes with Noble Group.
That was the only big listedglobal supply chain manager and
(04:55):
because we were getting debtfunding from banks for all the
investments we were making.
Environmental impact assessmentwas one of the big things that
we had to take care of.
Rehabilitation was one of thebig things we had to take care
of in our investments andtherefore we already got into
(05:18):
climate management of sorts assoon as 2012 2013.
Speaker 1 (05:30):
shorts as soon as 2012, 2013.
That's really interestingactually, tina, and the way that
finance and sustainability arelinked and have become more
linked.
It's becoming more and moreobvious as we go forward.
But I'm interested in youstarted off in executive roles,
with some really top-notch firmsmoving over to be a board
member, and certainly we at CGIsee those as quite different
(05:53):
roles.
I'd be really interested tohear how you found that move,
whether you feel there's morefreedom in one space or another
to actually ask those difficultquestions.
Speaker 3 (06:04):
Freedom in one space or another to actually ask those
difficult questions.
I'll tell you what.
I started quite early my boardcareer in my very early 40s.
It was actually the best thingthat I did, the reason being
that I was in a much betterposition to convey to senior
management core investmentmessages, knowing the
perspective that we're comingfrom.
(06:25):
And, likewise, as a boarddirector, I had much more
insight to understand theinternal dynamics, the pressures
that executive management wasunder, and therefore managed to
bridge what are two completelyseparate worlds.
So I would absolutely recommendfor people to start their
(06:46):
non-exec career earlier, becauseit makes them better directors
but definitely better executivesas well, and that tandem can
follow them throughout the wholecareer span, whether it's
executive or non-executive.
Speaker 1 (07:02):
That's super helpful.
Are there any tips you'd liketo give to aspiring board
directors who are currently inexecutive positions as to how
they should go about doing that?
Speaker 3 (07:13):
People have asked me, especially when I'm
interviewing you know, how didyou get your first board career
board role?
It was by luck.
It's incredibly difficult toget your first board position,
but when the opportunity arisesall of a sudden becomes
(07:34):
incredibly easy.
Why?
Because you're the right personin the right moment with the
right company.
When you're trying to feedthrough a keyhole, it's just not
going to happen.
But when you are curious, whenyou're pushing the agenda, when
you're doing leadership in theform of getting things done or
thought leadership in the formof policy advisory or in the
(07:58):
form of pushing out new ways ofthinking, that's when, all of a
sudden, you find yourself inopportunities where people seek
out your insights into boards.
So it's incredibly difficult ifyou say I want to be a board
director, but incredibly easywhen, intuitively, you start
(08:19):
building out all thesecompetencies and skills and
impact that make you a goodboard director.
I hope I'm answering yourquestion.
Speaker 1 (08:29):
Oh no, you are absolutely.
It sounds as if what's the oldphrase build it and they will
come.
If you make yourself the personwho is expert, who has
knowledge, who's curious, ofcourse you you'll find a board
position in that space.
Speaker 3 (08:42):
That makes it makes a lot of sense precisely and and
going back to you your question,matthew, about I didn't expect
these, um, this big answer to toyour start moments in your
first job, what I'll tell you isthat to me, a directorship is
all about motivation.
(09:02):
Why do people get seek to get aboard position?
Mine was a place of deficit, ifyou will, which I wanted to
turn into a surplus.
So if I've seen all theseexecutive situations, what would
I do differently if I could,and how do I make sure that
(09:26):
under my watch these thingsdon't happen?
So a motivation of a boarddirector is a critical thing
because, as I'm sure we'll getdown to questions about climate
transition, your motivationcomes in with you in the boards
and the way you ask questions,the way you probe, the way you
(09:46):
support the executive management, the way you propose different
things, brings your motivationalive.
Speaker 1 (09:54):
That's super interesting.
I mean, we often hear that yourpurpose, your motivation, is
what drives your career and ofcourse it will apply to board
directors, but it's really greatto hear that it does and that
it's part of everything that youdo in those roles.
(10:19):
Delve a little bit deeper intoenergy and minerals and you know
, as you know, they're bothreally hard to abate sectors,
but yet they're the very sectorsthat we we know we have to see
significant cuts happening in inemissions and improvements in
in stewardship if we're going tomake the difference, the change
that we have to make.
And we also know that businessas usual isn't going to be an
option if we're going to reachour climate targets.
But it's not all sort ofnegative.
(10:41):
There are these hugeopportunities that firms can
grasp by creating products andservices for this new economy.
And I'm really interested yousit on a number of boards in
those sectors, boardroomperspectives.
How do you see companies inmining and energy creating those
cultural changes and thestructures so that they can
(11:04):
enact policies that will seethis transition to the future
that we all want, the one wherepeople on the planet flourish
together?
Speaker 3 (11:11):
That's a very good question and let me start from
the end, if you will.
So the main board that I sit onis an energy and metals
producer, so a utility and afully integrated utility and a
metals producer an aluminium,primarily metals producer.
I joined the board six and ahalf years ago.
(11:32):
The stock price was aroundbetween 6 to 9 euros.
Today it stands at about 34euros.
A big chunk of that premium isa green premium.
So, just starting from the end,climate change or climate
(11:56):
management and profitability areabsolutely compatible.
Why?
Because I've seen it inpractice.
Let me give you another case inpoint from my advisory
portfolio.
A truly hard to abate sector isthe shipping sector.
Is the shipping sector.
(12:17):
What we're currently doing isgoing through with and this is a
company, a ship leasing companythat I'm advising.
What we're currently doing isgoing through with bankers, with
insurance companies, tounderstand what would be the
(12:38):
cost benefit analysis of greenretrofits, how much money it
would make you in terms of loweroperating expenses and in terms
of longer commercial value ofyour vessels as a result of
significant retrofits.
(12:58):
And the other thing is whatinsurance discount you can get
by going back to your insurersand saying these vessels are
more climate-proof as a resultof X Y Z investments in my
retrofits.
(13:22):
So what we've done in both casesis we've understood the
financial materiality of climatechange.
So we started from that.
So if I'm here to help youvisualize a pyramid, the results
(13:42):
are there.
The financial materiality wasthe second line into the pyramid
and the conditions that createthis financial materiality are
regulation and investor demandsand insurance cover.
So when you have these in yourpyramids and then when you
(14:08):
follow the cash flow, as I say,rather than just state the
principles and stay at the levelof principles, then you can
actually trace the financialmateriality of climate
management and then it becomessuch a powerful argument in any
board setting, in any advisorysetting, in any setting really,
(14:32):
that it becomes hard to ignore,not hard to abate, not hard to
abate.
So, um, that that is myunderstanding, six years in to
this effort, and it works.
It's worked for me so far.
It's worked in difficultsectors and it's working in
(14:55):
helping to transform what wecall hard to abate sectors as
well.
Speaker 1 (15:00):
That's really interesting and I love that.
I love that phrase hard toignore rather than hard to abate
.
I'm seeing similar thingscoming into the built
environment, which is anothersector that we know we need to
work on.
Are you finding the drivers arecoming in?
Or actually, maybe let'srephrase that when are you
(15:21):
finding the main driver comingfrom?
Is it investors, is itinsurance and financial services
demanding these better ways ofworking, better outcomes, or is
it from board directorsthemselves?
Or is it a combination of allthose factors you mentioned?
Speaker 3 (15:43):
It has to be a combination of all these factors
.
Any director, at any point intime, needs to have the full
context in their mind, presentthe full context to their
organizations.
They owe it as a fiduciary.
So it's down to the individualdirector to be very well
(16:07):
informed and by informed I don'tmean reading, I mean
accrediting To seek out tounderstand the perspectives of
the other people that they'resitting in the stakeholder room,
if you that they're sitting inthe stakeholder room, if you
will, principally in theinvestors, principally,
especially when we're talkingabout liabilities, any form of
(16:30):
significant liabilities thatcould come into play, and
therefore seek to understandwhat are the largest pressures
that need to come into theboardroom conversation, be
discussed openly and proposespecific ideas or areas of ideas
for the executive management toconsider and incorporate into
(16:53):
their strategy.
I think we expect a lot ofexecutives these days, the
reason being that we still thinkin terms of what were the good
times in the world, where timeswere tame, there were not major
(17:15):
wars, inflation was extremelytame.
These were unprecedentedlybenevolent times.
Now everything is up in the air.
So what is it about?
Directors that, to me, aresupporting what are
(17:39):
high-performance executive teamsdo their job better.
This is a completely symbioticnot symbiotic supportive job.
So, to answer your question ina very roundabout way, you have
to come in with ideas.
You have to come in with ideas,you have to come in with
(18:00):
perspectives, you have to comein with sharp understanding of
what ifs, what are the criticalthings that matter to the
organization, how does climateaffect them, how does climate
enable them and start buildingwhat is an opportunity set and a
risk management set that willsee the company through to the
(18:22):
next three to five years?
Speaker 1 (18:25):
And I like that view of the interaction between the
board and the executives.
We certainly don't hear thatspoken about much, but it's
absolutely key to make sure thatthat support I love the phrase
supportive that supportiverelationship works, because if
it doesn't, neither group can dotheir job well.
Speaker 3 (18:48):
Absolutely, absolutely.
It's all about supporting andit's a dynamic relationship.
When we're talking aboutclimate change, you're asking
people to do things in a verydifferent way to what they used
to.
So do not assume that becauseyou heard it in the financial
(19:09):
times or you heard it in thepresidential elections in the US
, where all of a sudden, bothcandidates acknowledged that
climate change is a reality,especially after what happened
in Florida, that you know.
People then get it.
Well, help them.
How do they get it?
What do they do as a result?
(19:31):
Say, you are a bank andobviously the very large banks
come under immense supervision.
But what if you took the top 30clients of yours and do a
proper climate transition stresstest?
What insights could thatproduce for you?
(19:51):
What products could thatproduce for you?
What services, what changes inyour risk management system?
What new processes in your AIassistance of your compliance
could it produce?
(20:12):
You keep both perspectives inmind without interfering in any
executive job, but when you'reoffering solutions, when you're
offering strategic directions ofsolutions, the relationship is
bound to be a supportiverelationship.
Speaker 2 (20:31):
Tina, you've been fantastic at seeding references
to the finance sector in all ofthe answers that you've given so
far.
I know that you're colossallyexperienced in that sector too.
I want to dive a little bitmore into the finance sector,
not least because the climatetransition is urgent, right, and
(20:54):
we know that within the financesector there are organizations
that are capable of directingthe necessary hundreds of
millions of dollars in the rightdirection, or indeed the wrong
direction, thinking that theycan create levers that will move
(21:24):
the finance sector itself andthe real economy in the right
direction in the climatetransition.
Speaker 3 (21:27):
So I will answer your question in two ways.
I would divide that questioninto the external factors that
help or hinder banks frompromoting climate transition and
internal reasons.
So, going to the external kindof conditions with which a bank
(21:53):
can help climate transitionunless the companies that it
services are not willing toprogress very far and unless
there is a national transitionplan behind it that provides the
context, the visibility, thetargets and an organized fashion
with which you can get yournatural resources.
(22:14):
You can get different divisionsto work with each other or
different departments to workwith each other.
I'm afraid it is fair for banksto say you know what?
We can only hold this pen forthat long.
We cannot transition byourselves.
I think it's an absolutely fairstatement, especially because
banks are banks.
The primary role of banks is toservice and make money.
(22:39):
If you want banks to gobankrupt, we have a completely
different problem altogether.
Now, these are the externalreasons that banks might or
might not be progressing withclimate transition as much.
There is another side to thisequation, and that is internal
reasons why banks may or may notbe progressing climate
(23:02):
transition as fast as we wouldlike them to.
We wrote a paper together withthe Centre for Climate
Engagement, on the financialmateriality of corporate culture
.
And the main tenant behind thatpaper, which is a practical
guide on corporate culture, isthat corporate culture is one of
the main reasons why banks areresistant to change.
(23:26):
So, again, like any othercompany, like any other industry
, you're asking banks to changetheir ways, the way that they
connect risk with reward, theway that they connect top to
bottom.
So the top hierarchy with themiddle management, what they
(23:48):
call permafrost these days, orthe bottom part of the hierarchy
that actually executes thestrategy, of the hierarchy that
actually executes the strategy.
And therefore, unless you havethat connectivity, unless you
have systems and processes inplace that make sure that
leadership is effective and iscascaded throughout the
(24:08):
organization, or risk managementchanges are cascaded throughout
the organization, then, whetherthis is climate change, whether
this is war resilience, whetherthis is inflation resilience,
you're not going to get itBecause, as you rightly said,
you cannot have the same wayswith which you think you will be
(24:32):
successful in tacklingcompletely different problems in
tackling completely differentproblems.
So I would love to prompt you tohave a read at that paper,
which is the FinancialMateriality of Corporate Culture
.
It's naturally addressed atbanks because, again, banks are
so heavily regulated that theybecome quite a fertile ground
(24:55):
for analysis.
But the principles apply acrossthe boards, across industries
and across geographies as well.
So, external reasons somethings you can, some things you
cannot influence.
Internal reasons you can 100%influence and there, there, I
think, lies the primary area offocus that investors should
(25:26):
spend time on.
What are the internal reasons?
Whether it's leadership,whether that's internal dynamics
, whether that's your governance, whether that's your behaviour,
whether that's your corporatepurpose, how do these all come
together to deliver the servicethat you've promised to serve
(25:46):
your clients with?
Speaker 2 (25:48):
Fabulous Thank you.
Systems and culture is thewhole of the deal.
That's it.
And, by the way, we're alwayshappy to plug the Centre for
Climate Engagement, our sisterorganisation.
Speaker 1 (26:01):
Tina, you mentioned remuneration in financial
companies and that's somethingthat came up in Climate Week,
new York that we need to changethe way we recognise the
achievements of, specifically,executives in the conversation I
was having, but also directorsand other levels of management
(26:22):
within the financial sector,from short-term increases in
capital values to longer-termincreases in not just financial
value but value in a holisticsense.
Do you have any examples ofwhere you've seen that work
really well?
Speaker 3 (26:43):
I do not understand that question and the reason why
I'm saying this to you is thatthere is no financial value that
doesn't capture holistic value.
Whether, sooner or later, thesethings end up being the same.
Why do I say that?
Because some client is going toget angry with you because you
(27:04):
mistreated them.
Some process is going to fail.
You're going to get angry withyou because you mistreated them.
Some process is going to fail.
You're going to get your fines.
Some investor is going to getuncomfortable.
You're going to lose yourinvestor base.
So it is a question of time andtiming, but unavoidably, these
things end up being the same.
These things end up being thesame.
(27:25):
So, when you look at the DowJones index, how many companies
go in and out of that index?
How many companies that werethere 50 years ago are still
there now?
I alive, not just in adifferent index alive.
So it's a question of theduration of, of your attention,
(27:51):
the duration of your investment.
As a, I have a nine year atbest.
I have a nine year horizon, andthen in my ninth year, I have
another five years horizonbecause I will approve the next
three to five year plan.
So, as a CEO, I have an averageof five, seven years, but the
(28:13):
systems and processes that I putin place survive well after I'm
gone.
So there's much more longevityin an organisation than the
numbers suggest.
Speaker 1 (28:27):
And do you think that longevity is correctly
accounted for those decisionsover that long period of time?
Are they correctly accountedfor in the way those executives
and directors are remuneratedcurrently?
Speaker 3 (28:44):
It depends on your shareholder base are remunerated
.
Currently, it depends on yourshareholder base.
If your shareholder base isprimarily composed of passive
index funds, neither here northere.
But if you have your activeinvestors, if you have your whom
you should actually aspire tohave on your shareholder
(29:05):
register, it's not a have youron your shareholder register,
it's not a question of yourshare having a shareholder
register, it's a question ofactively managing your
shareholder register issomething that I I insist in in
in my uh board interventionswhat the aspiring shareholders
the rather, who are theshareholders you aspire to have
(29:27):
in your shareholder register?
That will see you through inthe major transformations you're
trying to make in theorganization.
Speaker 1 (29:36):
Again, it's about that support, isn't it at those
different levels, making surethat it's throughout the
organization.
Speaker 3 (29:44):
So when you and I'm a remuneration director when you
devise your remuneration policy,you cannot expect the long-term
to run on its own.
The short-term should beincrements that support your
long-term performance.
They create what Masik saidlast Thursday in a conference
(30:09):
that I was muscle,organizational muscle, and it's
logical that, in terms ofsequence, that you build up the
short-term that delivers thelong-term, that you build up the
short term that delivers thelong term.
(30:29):
If you have a remunerationpolicy that is congruent between
the short term and the longterm, it represents a short-term
summary of the company'sstrategy.
So therefore, there's anabsolute consistency between
(30:49):
your strategy and yourremuneration policy.
And then, when you have yourtargets that are cascaded
throughout the organization, thelikelihood is that you have
something that works.
The one thing that I wouldadvise when it comes to
remuneration policy is be waryof your benchmarks.
It's easy to compare with yourimmediate neighbor, but when you
(31:13):
are going for change, you don'tgo with the lowest denominator.
You go with people that haveactually succeeded, and
therefore we're talking aboutcomposites, benchmark composites
of companies that have reallysucceeded, whether they are or
they're not in your sector.
What elements can you pick andchoose from different
(31:33):
organizations that will see youthrough in the next five, ten
years, and 2050, I mean, it'sfar for everyone.
So let's just focus on theshort term to medium term to
make sure that we put the inplace so that then we can talk
about 2035, 2040, etc.
Etc.
Long winded answer to what wasa very, very simple question.
Speaker 1 (31:59):
No, it's a great answer and I love, I love having
that ambition beyond the easyand the close, to looking you to
looking far more broadly atdifferent sectors and really
creating a challenge foryourself.
I'm going to, if I may, take aslightly different route and ask
(32:21):
a different question.
So, looking at your career,over the fast past um several
decades, you've worked withpolicymakers and business
leaders, um as well as um withinorganizations and boards and
certainly from from what we seeum, all of those groups can have
(32:41):
quite varied perspectives anddifferent routes to change and
to making change happen.
Where have you found the bestvalue for engaging, whether it's
internally or externally, togain support for climate
initiatives and climate policy?
Speaker 3 (33:13):
initiatives and climate policy.
So I cannot see a wayrealistically of making change
unless I have all theperspectives in the same room.
So I actively seek out theperspectives of the regulators,
I actively seek out theperspectives of investors, I
actively seek out theperspectives and experience of
executives and non-executivesand I sit down, I put all of
(33:35):
this together and I try tounderstand what best theory says
not best practice what besttheory says what is happening on
the ground and how do youbridge what are fundamental gaps
.
So really, the value is inputting all of the perspectives
(33:58):
together and trying to see howeach part can pull its weight in
order to make one inch ofprogress, two inches of progress
, and create that necessarymomentum for the next challenge
and the next challenge andopportunity after that.
Speaker 1 (34:17):
And that sort of goes back to what you were saying
before around systems and thingsbeing linked.
Speaker 3 (34:23):
I mean, this was the primary motivation for me to get
involved into policy advisory.
So I've produced six papers sofar, six white papers or
practical guidance, whatever youwant to call it.
Four of them have beenpublished.
Two of them are with EuropeanBank for Reconstruction and
Development and the aim there isreally to understand not what,
(34:51):
why, what's happening.
That is blocking things andinstead of asking rhetorical
questions and we people that arevery keen on climate change we
end up getting quite frustratedand we end up asking these
rhetorical questions Well, whydon't you get it?
(35:11):
Why don't you get it?
I mean, clearly someone is notgetting something on the other
side of the table, so the onusof proof is on them or on you.
So you have to turn thatrhetorical question into a
genuine question.
Sit down, understand and sitdown and understand lots of
(35:35):
different perspectives and then,when you get into one level
underneath and one levelunderneath that, then you can
understand the root causes, theblockages and what kind of
interventions can help unblockthings.
In part, you know people loveinstant gratification these days
(35:58):
.
It's not available in climatechange.
Forget it.
Okay, it's all about thequestion of inches, and one inch
closer at a time.
I know that things are changingradically out there, but in the
same time, war conditions arechanging radically, whether
(36:21):
they're hot wars or cold wars.
Inflation is changing radically, whether it is persistent
reflation or transient inflation.
Societal disruptions arechanging rapidly as well, to the
extent that now they'rebecoming a formal engagement
subject by investors.
So we had it relatively easyback in 2020.
(36:47):
Now we don't.
So unless we make it a genuinediscovery process and try to
understand all perspectives andbring them together, our
arguments are going to getsidelined, and that would be the
biggest failure of us asclimate practitioners.
Speaker 1 (37:09):
How can boards help convene that conversation, or
where do you think thoseconversations are best convened?
Speaker 3 (37:17):
Bilaterally to begin with, not in a plenary board
situation.
You have to start bilaterally.
You need to build situation.
You have to start bilaterally,you need to build.
I mean, boards are not, they'reforay of influence, they're not
(37:44):
similar to a Supreme Courtenvironment.
So you need to startbilaterally.
You need to understand otherpeople's perspective.
Where are they coming from?
Where are they going with thissame with the executive and by
executive I don't mean thec-suite, I mean n minus one, n
minus two, n minus three,internal audit, the head of
climate risk in yourorganization, etc.
(38:04):
Etc.
And then, once you startbilaterally and create some
common ground, then you get thethird person in, then a fourth
person in, then it's a boardcommittee, then it's two board
committees and then it becomes aplenary board conversation.
But to walk in and say, hey,haven't you seen?
No, I haven't seen, becauseI've seen another 10 other
(38:27):
things that are top of the riskregister, that have to be
operationalized.
And then you've lost themomentum, you've lost your
argument and you've lost yourchance to make an impact.
So you have to be verymethodical and you have to be
very well studied and you haveto punch very succinctly.
Speaker 2 (38:52):
Great.
Thank you, tina.
As you know, our theory ofchange at the Climate Governance
Initiative is that it's thenon-executive director in many
jurisdictions that has thatspecial responsibility to ask
difficult questions in theboardroom, and we encourage and
(39:13):
motivate them to do that and wehelp them to understand the
answers that they get too.
I know that you have a lot ofexperience working with one of
our chapters, chapter Zero inthe UK.
You're a fellow of Chapter Zeroand I wondered if I could
encourage you just for a coupleof minutes to talk about the
(39:34):
benefits to board directors ofengaging with the chapter
network and with fellow boarddirectors who have come to the
same party.
Speaker 3 (39:48):
Absolutely.
There is no better therapysession than a session with
Chapter Zero, because you havethe theory and then you have the
reality of practice and, inthat reality of practice,
understanding how other peopleare dealing with it, how they
are managing it.
How do they input climatemetrics into the remuneration
(40:13):
process?
How do they make sure thatclimate is operationalized in
the risk register and cascadeddown the organization?
The best way to find out ideasand methodologies to get your
(40:34):
executives to understand isthrough conversations with
un-meds.
People that have succeeded andpeople have failed have equally
important insights to providefor you Now.
I've run about 400 interviewsso far for my policy work.
So one of again the motivationsbehind all this policy work is
(40:57):
that I get to be a betterdirector.
Why?
Because I hear how peoplesucceed and how people fail and
hopefully I try to fail indifferent ways and succeed in
the same ways, plus differentways as well, which I will go
back and share in 4i, likechapter zero, and help people
(41:20):
understand.
You know how do we deal withthis now?
Because we are in the peckingorder.
We're getting lower and lowerand lower, unfortunately.
Speaker 2 (41:29):
Yeah, thank you, tina .
This has been such a goodconversation.
Thanks so much for spendingthis time with us.
We try to ask all of ourinterviewees a couple of final
questions, so let me ask youthis what advice would you give
(41:50):
to an ed, an independentdirector, who is trying to speak
up for climate in the boardroom, perhaps for the first time,
trying to get the board'sattention onto that topic?
Speaker 3 (42:06):
Three things Financial materiality.
Understand climate context inyour organisation and build
alliances in the boardroom.
Don't throw a question becauseyou throw an empty question.
You'll get an empty answer back.
Because you throw an emptyquestion, you'll get an empty
(42:32):
answer back.
You throw a question that isserved in a can.
You'll get a can't answer back.
Do your homework, do yourfinancial materiality or poke
financial materiality and youwill start getting the
conversation going.
Speaker 1 (42:48):
And my question is more at the organisational level
.
So if you had to give one keymessage to boards and
organisations in light of theclimate crisis, what would that
be?
Speaker 3 (42:58):
Financial materiality insurance.
Will you have insuranceavailability or pricing to do
what you're doing today?
Speaker 1 (43:12):
Yeah, I'm hearing insurance more and more coming
up.
That's really interesting.
Wonderful, Tina Mavracki.
Thank you so very much forsharing your thoughts and
insights with us today.
Speaker 3 (43:23):
This has been fantastic for me as well, and I
really want to congratulate youfor the amazing work that you're
doing out there and also forconvening directors and giving a
lot of information and toolsout there for people to be able
to do their job well.
So my thanks to you.
Speaker 2 (43:39):
Thank you.
This interview was recorded inOctober 2024.
The Climate GovernanceInitiative is a global
non-profit network reaching morethan 100,000 board directors.
Most of the world's greenhousegas emissions come from the
private sector, so the centralquestion the initiative asks is
what if every company had aclimate target and a plan to
(44:02):
meet it?
We work globally, with over 30chapters reaching board
directors in over 70 countries,and our work draws on the
principles for effective climategovernance set out by the World
Economic Forum.
If you want to know more,there's a link in the show notes
where all our content isavailable for free and where you
can find your local chapter.
(44:22):
In our next episode, we'll betalking to Miha Kusak.
Miha has over 30 years ofexperience in international
banking, ranging from corporatebanking, investment banking,
corporate finance.
He's worked with capitalmarkets and wealth management,
and he is the chair andco-founder of Chapter Zero
Slovenia.
(44:43):
I'm really looking forward togetting his perspective from the
financial sector in our nextepisode.
Hello and welcome to Directors Dialogues from the
Climate Governance Initiative,where we lift the lid on the
different ways that companyboard members are speaking up
for climate in their boardrooms.
In each episode we meet aclimate champion who's been
leading or nudging or badgeringtheir boardroom colleagues
towards climate-friendlypolicies and practices.
I'm Alexandra Bolton.
Speaker 2 (00:17):
And I'm Matthew Moss is Tina Mavracki, a fabulously
experienced board director andstrategic advisor with also an
executive career behind herspanning more than two decades.
In her executive career she'sworked with global capital
markets investment management.
She's worked up and down thesupply chain in C suite
(00:40):
positions.
Her executive career haslargely been with Morgan Stanley
and with Citi.
She's advised organisationsthat have included the state of
Maharashtra in India onrenewable policy and solar
tariffs, and listeners who haveheard our interview with
Shailesh Haribakti will rememberhow important energy policy is
(01:03):
in that part of the world.
Tina's NED portfolio includesenergy and metals.
Her advisory portfolio coversbanking debt funds, the European
Bank for Reconstruction andDevelopment and the Children's
Investment Fund Foundation Inclimate policy advisory.
Importantly and we'll come tothis later Tina produced
(01:25):
governance recommendations forclimate transition and for
executive remuneration for theUK's Financial Conduct Authority
and for the European BankingAuthority, so couldn't be a
better person for us to betalking to, tina, welcome.
Speaker 3 (01:44):
What a delight to be with you.
Thank you so much, and thankyou so much for the amazing work
that CGI has been doing aroundthe world.
So I can't wait to get startedwith you and get into the weeds
of how things get done, howthings don't get done and what
we could do to progress theirconversations on their boards
and their advisory capacities.
Speaker 2 (02:05):
Brilliant, thank you.
So we want our listeners tounderstand a little bit more
about you before we get into thebigger questions.
So, thinking back to your firstjob, tell us something that
sticks in your mind as to howthat job might have influenced
you as you develop your career.
Speaker 3 (02:25):
Absolutely.
As I think back into my career,obviously no career is
successful unless there'stenacity and perseverance and
hard work.
That is obvious.
But the beginning of my careerwas marked by a series of
governance failures.
(02:46):
So back then in 1998, we hadRussia default on its debts and
the long term capital managementfund blowing up.
Since then I've experiencedanother three big governance
failures in my career and thatkind of sparked a natural
(03:09):
curiosity about what is it aboutall these things?
What is the common thread, whatam I learning, what should I be
learning, what am I notlearning and what do I do going
forward?
So you brought me back to 98.
I was counting only three biggovernance failures in my career
, but actually you're right,it's four in total.
(03:29):
So there you go.
Speaker 2 (03:31):
Wow, I wasn't quite expecting you to begin to draw
our attention to the governancefailures that were stark in your
first job.
That's quite an introduction.
When did you first becomeinterested in sustainability?
I decided to go back andretrain.
Speaker 3 (04:08):
So I got my master's in finance at London Business
School.
I met my first business partnerthere, the Indian government,
(04:29):
to understand lessons learnedfrom the European experience on
what was a first big wave ofrenewable investments, feeding
tariffs and the whole excitementaround what was a start in a
big trend.
So that's what started mycareer in sustainability, which
was then solidified with mytimes with Noble Group.
That was the only big listedglobal supply chain manager and
(04:55):
because we were getting debtfunding from banks for all the
investments we were making.
Environmental impact assessmentwas one of the big things that
we had to take care of.
Rehabilitation was one of thebig things we had to take care
of in our investments andtherefore we already got into
(05:18):
climate management of sorts assoon as 2012 2013.
Speaker 1 (05:30):
shorts as soon as 2012, 2013.
That's really interestingactually, tina, and the way that
finance and sustainability arelinked and have become more
linked.
It's becoming more and moreobvious as we go forward.
But I'm interested in youstarted off in executive roles,
with some really top-notch firmsmoving over to be a board
member, and certainly we at CGIsee those as quite different
(05:53):
roles.
I'd be really interested tohear how you found that move,
whether you feel there's morefreedom in one space or another
to actually ask those difficultquestions.
Speaker 3 (06:04):
Freedom in one space or another to actually ask those
difficult questions.
I'll tell you what.
I started quite early my boardcareer in my very early 40s.
It was actually the best thingthat I did, the reason being
that I was in a much betterposition to convey to senior
management core investmentmessages, knowing the
perspective that we're comingfrom.
(06:25):
And, likewise, as a boarddirector, I had much more
insight to understand theinternal dynamics, the pressures
that executive management wasunder, and therefore managed to
bridge what are two completelyseparate worlds.
So I would absolutely recommendfor people to start their
(06:46):
non-exec career earlier, becauseit makes them better directors
but definitely better executivesas well, and that tandem can
follow them throughout the wholecareer span, whether it's
executive or non-executive.
Speaker 1 (07:02):
That's super helpful.
Are there any tips you'd liketo give to aspiring board
directors who are currently inexecutive positions as to how
they should go about doing that?
Speaker 3 (07:13):
People have asked me, especially when I'm
interviewing you know, how didyou get your first board career
board role?
It was by luck.
It's incredibly difficult toget your first board position,
but when the opportunity arisesall of a sudden becomes
(07:34):
incredibly easy.
Why?
Because you're the right personin the right moment with the
right company.
When you're trying to feedthrough a keyhole, it's just not
going to happen.
But when you are curious, whenyou're pushing the agenda, when
you're doing leadership in theform of getting things done or
thought leadership in the formof policy advisory or in the
(07:58):
form of pushing out new ways ofthinking, that's when, all of a
sudden, you find yourself inopportunities where people seek
out your insights into boards.
So it's incredibly difficult ifyou say I want to be a board
director, but incredibly easywhen, intuitively, you start
(08:19):
building out all thesecompetencies and skills and
impact that make you a goodboard director.
I hope I'm answering yourquestion.
Speaker 1 (08:29):
Oh no, you are absolutely.
It sounds as if what's the oldphrase build it and they will
come.
If you make yourself the personwho is expert, who has
knowledge, who's curious, ofcourse you you'll find a board
position in that space.
Speaker 3 (08:42):
That makes it makes a lot of sense precisely and and
going back to you your question,matthew, about I didn't expect
these, um, this big answer to toyour start moments in your
first job, what I'll tell you isthat to me, a directorship is
all about motivation.
(09:02):
Why do people get seek to get aboard position?
Mine was a place of deficit, ifyou will, which I wanted to
turn into a surplus.
So if I've seen all theseexecutive situations, what would
I do differently if I could,and how do I make sure that
(09:26):
under my watch these thingsdon't happen?
So a motivation of a boarddirector is a critical thing
because, as I'm sure we'll getdown to questions about climate
transition, your motivationcomes in with you in the boards
and the way you ask questions,the way you probe, the way you
(09:46):
support the executive management, the way you propose different
things, brings your motivationalive.
Speaker 1 (09:54):
That's super interesting.
I mean, we often hear that yourpurpose, your motivation, is
what drives your career and ofcourse it will apply to board
directors, but it's really greatto hear that it does and that
it's part of everything that youdo in those roles.
(10:19):
Delve a little bit deeper intoenergy and minerals and you know
, as you know, they're bothreally hard to abate sectors,
but yet they're the very sectorsthat we we know we have to see
significant cuts happening in inemissions and improvements in
in stewardship if we're going tomake the difference, the change
that we have to make.
And we also know that businessas usual isn't going to be an
option if we're going to reachour climate targets.
But it's not all sort ofnegative.
(10:41):
There are these hugeopportunities that firms can
grasp by creating products andservices for this new economy.
And I'm really interested yousit on a number of boards in
those sectors, boardroomperspectives.
How do you see companies inmining and energy creating those
cultural changes and thestructures so that they can
(11:04):
enact policies that will seethis transition to the future
that we all want, the one wherepeople on the planet flourish
together?
Speaker 3 (11:11):
That's a very good question and let me start from
the end, if you will.
So the main board that I sit onis an energy and metals
producer, so a utility and afully integrated utility and a
metals producer an aluminium,primarily metals producer.
I joined the board six and ahalf years ago.
(11:32):
The stock price was aroundbetween 6 to 9 euros.
Today it stands at about 34euros.
A big chunk of that premium isa green premium.
So, just starting from the end,climate change or climate
(11:56):
management and profitability areabsolutely compatible.
Why?
Because I've seen it inpractice.
Let me give you another case inpoint from my advisory
portfolio.
A truly hard to abate sector isthe shipping sector.
Is the shipping sector.
(12:17):
What we're currently doing isgoing through with and this is a
company, a ship leasing companythat I'm advising.
What we're currently doing isgoing through with bankers, with
insurance companies, tounderstand what would be the
(12:38):
cost benefit analysis of greenretrofits, how much money it
would make you in terms of loweroperating expenses and in terms
of longer commercial value ofyour vessels as a result of
significant retrofits.
(12:58):
And the other thing is whatinsurance discount you can get
by going back to your insurersand saying these vessels are
more climate-proof as a resultof X Y Z investments in my
retrofits.
(13:22):
So what we've done in both casesis we've understood the
financial materiality of climatechange.
So we started from that.
So if I'm here to help youvisualize a pyramid, the results
(13:42):
are there.
The financial materiality wasthe second line into the pyramid
and the conditions that createthis financial materiality are
regulation and investor demandsand insurance cover.
So when you have these in yourpyramids and then when you
(14:08):
follow the cash flow, as I say,rather than just state the
principles and stay at the levelof principles, then you can
actually trace the financialmateriality of climate
management and then it becomessuch a powerful argument in any
board setting, in any advisorysetting, in any setting really,
(14:32):
that it becomes hard to ignore,not hard to abate, not hard to
abate.
So, um, that that is myunderstanding, six years in to
this effort, and it works.
It's worked for me so far.
It's worked in difficultsectors and it's working in
(14:55):
helping to transform what wecall hard to abate sectors as
well.
Speaker 1 (15:00):
That's really interesting and I love that.
I love that phrase hard toignore rather than hard to abate
.
I'm seeing similar thingscoming into the built
environment, which is anothersector that we know we need to
work on.
Are you finding the drivers arecoming in?
Or actually, maybe let'srephrase that when are you
(15:21):
finding the main driver comingfrom?
Is it investors, is itinsurance and financial services
demanding these better ways ofworking, better outcomes, or is
it from board directorsthemselves?
Or is it a combination of allthose factors you mentioned?
Speaker 3 (15:43):
It has to be a combination of all these factors
.
Any director, at any point intime, needs to have the full
context in their mind, presentthe full context to their
organizations.
They owe it as a fiduciary.
So it's down to the individualdirector to be very well
(16:07):
informed and by informed I don'tmean reading, I mean
accrediting To seek out tounderstand the perspectives of
the other people that they'resitting in the stakeholder room,
if you that they're sitting inthe stakeholder room, if you
will, principally in theinvestors, principally,
especially when we're talkingabout liabilities, any form of
(16:30):
significant liabilities thatcould come into play, and
therefore seek to understandwhat are the largest pressures
that need to come into theboardroom conversation, be
discussed openly and proposespecific ideas or areas of ideas
for the executive management toconsider and incorporate into
(16:53):
their strategy.
I think we expect a lot ofexecutives these days, the
reason being that we still thinkin terms of what were the good
times in the world, where timeswere tame, there were not major
(17:15):
wars, inflation was extremelytame.
These were unprecedentedlybenevolent times.
Now everything is up in the air.
So what is it about?
Directors that, to me, aresupporting what are
(17:39):
high-performance executive teamsdo their job better.
This is a completely symbioticnot symbiotic supportive job.
So, to answer your question ina very roundabout way, you have
to come in with ideas.
You have to come in with ideas,you have to come in with
(18:00):
perspectives, you have to comein with sharp understanding of
what ifs, what are the criticalthings that matter to the
organization, how does climateaffect them, how does climate
enable them and start buildingwhat is an opportunity set and a
risk management set that willsee the company through to the
(18:22):
next three to five years?
Speaker 1 (18:25):
And I like that view of the interaction between the
board and the executives.
We certainly don't hear thatspoken about much, but it's
absolutely key to make sure thatthat support I love the phrase
supportive that supportiverelationship works, because if
it doesn't, neither group can dotheir job well.
Speaker 3 (18:48):
Absolutely, absolutely.
It's all about supporting andit's a dynamic relationship.
When we're talking aboutclimate change, you're asking
people to do things in a verydifferent way to what they used
to.
So do not assume that becauseyou heard it in the financial
(19:09):
times or you heard it in thepresidential elections in the US
, where all of a sudden, bothcandidates acknowledged that
climate change is a reality,especially after what happened
in Florida, that you know.
People then get it.
Well, help them.
How do they get it?
What do they do as a result?
(19:31):
Say, you are a bank andobviously the very large banks
come under immense supervision.
But what if you took the top 30clients of yours and do a
proper climate transition stresstest?
What insights could thatproduce for you?
(19:51):
What products could thatproduce for you?
What services, what changes inyour risk management system?
What new processes in your AIassistance of your compliance
could it produce?
(20:12):
You keep both perspectives inmind without interfering in any
executive job, but when you'reoffering solutions, when you're
offering strategic directions ofsolutions, the relationship is
bound to be a supportiverelationship.
Speaker 2 (20:31):
Tina, you've been fantastic at seeding references
to the finance sector in all ofthe answers that you've given so
far.
I know that you're colossallyexperienced in that sector too.
I want to dive a little bitmore into the finance sector,
not least because the climatetransition is urgent, right, and
(20:54):
we know that within the financesector there are organizations
that are capable of directingthe necessary hundreds of
millions of dollars in the rightdirection, or indeed the wrong
direction, thinking that theycan create levers that will move
(21:24):
the finance sector itself andthe real economy in the right
direction in the climatetransition.
Speaker 3 (21:27):
So I will answer your question in two ways.
I would divide that questioninto the external factors that
help or hinder banks frompromoting climate transition and
internal reasons.
So, going to the external kindof conditions with which a bank
(21:53):
can help climate transitionunless the companies that it
services are not willing toprogress very far and unless
there is a national transitionplan behind it that provides the
context, the visibility, thetargets and an organized fashion
with which you can get yournatural resources.
(22:14):
You can get different divisionsto work with each other or
different departments to workwith each other.
I'm afraid it is fair for banksto say you know what?
We can only hold this pen forthat long.
We cannot transition byourselves.
I think it's an absolutely fairstatement, especially because
banks are banks.
The primary role of banks is toservice and make money.
(22:39):
If you want banks to gobankrupt, we have a completely
different problem altogether.
Now, these are the externalreasons that banks might or
might not be progressing withclimate transition as much.
There is another side to thisequation, and that is internal
reasons why banks may or may notbe progressing climate
(23:02):
transition as fast as we wouldlike them to.
We wrote a paper together withthe Centre for Climate
Engagement, on the financialmateriality of corporate culture
.
And the main tenant behind thatpaper, which is a practical
guide on corporate culture, isthat corporate culture is one of
the main reasons why banks areresistant to change.
(23:26):
So, again, like any othercompany, like any other industry
, you're asking banks to changetheir ways, the way that they
connect risk with reward, theway that they connect top to
bottom.
So the top hierarchy with themiddle management, what they
(23:48):
call permafrost these days, orthe bottom part of the hierarchy
that actually executes thestrategy, of the hierarchy that
actually executes the strategy.
And therefore, unless you havethat connectivity, unless you
have systems and processes inplace that make sure that
leadership is effective and iscascaded throughout the
(24:08):
organization, or risk managementchanges are cascaded throughout
the organization, then, whetherthis is climate change, whether
this is war resilience, whetherthis is inflation resilience,
you're not going to get itBecause, as you rightly said,
you cannot have the same wayswith which you think you will be
(24:32):
successful in tacklingcompletely different problems in
tackling completely differentproblems.
So I would love to prompt you tohave a read at that paper,
which is the FinancialMateriality of Corporate Culture
.
It's naturally addressed atbanks because, again, banks are
so heavily regulated that theybecome quite a fertile ground
(24:55):
for analysis.
But the principles apply acrossthe boards, across industries
and across geographies as well.
So, external reasons somethings you can, some things you
cannot influence.
Internal reasons you can 100%influence and there, there, I
think, lies the primary area offocus that investors should
(25:26):
spend time on.
What are the internal reasons?
Whether it's leadership,whether that's internal dynamics
, whether that's your governance, whether that's your behaviour,
whether that's your corporatepurpose, how do these all come
together to deliver the servicethat you've promised to serve
(25:46):
your clients with?
Speaker 2 (25:48):
Fabulous Thank you.
Systems and culture is thewhole of the deal.
That's it.
And, by the way, we're alwayshappy to plug the Centre for
Climate Engagement, our sisterorganisation.
Speaker 1 (26:01):
Tina, you mentioned remuneration in financial
companies and that's somethingthat came up in Climate Week,
new York that we need to changethe way we recognise the
achievements of, specifically,executives in the conversation I
was having, but also directorsand other levels of management
(26:22):
within the financial sector,from short-term increases in
capital values to longer-termincreases in not just financial
value but value in a holisticsense.
Do you have any examples ofwhere you've seen that work
really well?
Speaker 3 (26:43):
I do not understand that question and the reason why
I'm saying this to you is thatthere is no financial value that
doesn't capture holistic value.
Whether, sooner or later, thesethings end up being the same.
Why do I say that?
Because some client is going toget angry with you because you
(27:04):
mistreated them.
Some process is going to fail.
You're going to get angry withyou because you mistreated them.
Some process is going to fail.
You're going to get your fines.
Some investor is going to getuncomfortable.
You're going to lose yourinvestor base.
So it is a question of time andtiming, but unavoidably, these
things end up being the same.
These things end up being thesame.
(27:25):
So, when you look at the DowJones index, how many companies
go in and out of that index?
How many companies that werethere 50 years ago are still
there now?
I alive, not just in adifferent index alive.
So it's a question of theduration of, of your attention,
(27:51):
the duration of your investment.
As a, I have a nine year atbest.
I have a nine year horizon, andthen in my ninth year, I have
another five years horizonbecause I will approve the next
three to five year plan.
So, as a CEO, I have an averageof five, seven years, but the
(28:13):
systems and processes that I putin place survive well after I'm
gone.
So there's much more longevityin an organisation than the
numbers suggest.
Speaker 1 (28:27):
And do you think that longevity is correctly
accounted for those decisionsover that long period of time?
Are they correctly accountedfor in the way those executives
and directors are remuneratedcurrently?
Speaker 3 (28:44):
It depends on your shareholder base are remunerated
.
Currently, it depends on yourshareholder base.
If your shareholder base isprimarily composed of passive
index funds, neither here northere.
But if you have your activeinvestors, if you have your whom
you should actually aspire tohave on your shareholder
(29:05):
register, it's not a have youron your shareholder register,
it's not a question of yourshare having a shareholder
register, it's a question ofactively managing your
shareholder register issomething that I I insist in in
in my uh board interventionswhat the aspiring shareholders
the rather, who are theshareholders you aspire to have
(29:27):
in your shareholder register?
That will see you through inthe major transformations you're
trying to make in theorganization.
Speaker 1 (29:36):
Again, it's about that support, isn't it at those
different levels, making surethat it's throughout the
organization.
Speaker 3 (29:44):
So when you and I'm a remuneration director when you
devise your remuneration policy,you cannot expect the long-term
to run on its own.
The short-term should beincrements that support your
long-term performance.
They create what Masik saidlast Thursday in a conference
(30:09):
that I was muscle,organizational muscle, and it's
logical that, in terms ofsequence, that you build up the
short-term that delivers thelong-term, that you build up the
short term that delivers thelong term.
(30:29):
If you have a remunerationpolicy that is congruent between
the short term and the longterm, it represents a short-term
summary of the company'sstrategy.
So therefore, there's anabsolute consistency between
(30:49):
your strategy and yourremuneration policy.
And then, when you have yourtargets that are cascaded
throughout the organization, thelikelihood is that you have
something that works.
The one thing that I wouldadvise when it comes to
remuneration policy is be waryof your benchmarks.
It's easy to compare with yourimmediate neighbor, but when you
(31:13):
are going for change, you don'tgo with the lowest denominator.
You go with people that haveactually succeeded, and
therefore we're talking aboutcomposites, benchmark composites
of companies that have reallysucceeded, whether they are or
they're not in your sector.
What elements can you pick andchoose from different
(31:33):
organizations that will see youthrough in the next five, ten
years, and 2050, I mean, it'sfar for everyone.
So let's just focus on theshort term to medium term to
make sure that we put the inplace so that then we can talk
about 2035, 2040, etc.
Etc.
Long winded answer to what wasa very, very simple question.
Speaker 1 (31:59):
No, it's a great answer and I love, I love having
that ambition beyond the easyand the close, to looking you to
looking far more broadly atdifferent sectors and really
creating a challenge foryourself.
I'm going to, if I may, take aslightly different route and ask
(32:21):
a different question.
So, looking at your career,over the fast past um several
decades, you've worked withpolicymakers and business
leaders, um as well as um withinorganizations and boards and
certainly from from what we seeum, all of those groups can have
(32:41):
quite varied perspectives anddifferent routes to change and
to making change happen.
Where have you found the bestvalue for engaging, whether it's
internally or externally, togain support for climate
initiatives and climate policy?
Speaker 3 (33:13):
initiatives and climate policy.
So I cannot see a wayrealistically of making change
unless I have all theperspectives in the same room.
So I actively seek out theperspectives of the regulators,
I actively seek out theperspectives of investors, I
actively seek out theperspectives and experience of
executives and non-executivesand I sit down, I put all of
(33:35):
this together and I try tounderstand what best theory says
not best practice what besttheory says what is happening on
the ground and how do youbridge what are fundamental gaps
.
So really, the value is inputting all of the perspectives
(33:58):
together and trying to see howeach part can pull its weight in
order to make one inch ofprogress, two inches of progress
, and create that necessarymomentum for the next challenge
and the next challenge andopportunity after that.
Speaker 1 (34:17):
And that sort of goes back to what you were saying
before around systems and thingsbeing linked.
Speaker 3 (34:23):
I mean, this was the primary motivation for me to get
involved into policy advisory.
So I've produced six papers sofar, six white papers or
practical guidance, whatever youwant to call it.
Four of them have beenpublished.
Two of them are with EuropeanBank for Reconstruction and
Development and the aim there isreally to understand not what,
(34:51):
why, what's happening.
That is blocking things andinstead of asking rhetorical
questions and we people that arevery keen on climate change we
end up getting quite frustratedand we end up asking these
rhetorical questions Well, whydon't you get it?
(35:11):
Why don't you get it?
I mean, clearly someone is notgetting something on the other
side of the table, so the onusof proof is on them or on you.
So you have to turn thatrhetorical question into a
genuine question.
Sit down, understand and sitdown and understand lots of
(35:35):
different perspectives and then,when you get into one level
underneath and one levelunderneath that, then you can
understand the root causes, theblockages and what kind of
interventions can help unblockthings.
In part, you know people loveinstant gratification these days
(35:58):
.
It's not available in climatechange.
Forget it.
Okay, it's all about thequestion of inches, and one inch
closer at a time.
I know that things are changingradically out there, but in the
same time, war conditions arechanging radically, whether
(36:21):
they're hot wars or cold wars.
Inflation is changing radically, whether it is persistent
reflation or transient inflation.
Societal disruptions arechanging rapidly as well, to the
extent that now they'rebecoming a formal engagement
subject by investors.
So we had it relatively easyback in 2020.
(36:47):
Now we don't.
So unless we make it a genuinediscovery process and try to
understand all perspectives andbring them together, our
arguments are going to getsidelined, and that would be the
biggest failure of us asclimate practitioners.
Speaker 1 (37:09):
How can boards help convene that conversation, or
where do you think thoseconversations are best convened?
Speaker 3 (37:17):
Bilaterally to begin with, not in a plenary board
situation.
You have to start bilaterally.
You need to build situation.
You have to start bilaterally,you need to build.
I mean, boards are not, they'reforay of influence, they're not
(37:44):
similar to a Supreme Courtenvironment.
So you need to startbilaterally.
You need to understand otherpeople's perspective.
Where are they coming from?
Where are they going with thissame with the executive and by
executive I don't mean thec-suite, I mean n minus one, n
minus two, n minus three,internal audit, the head of
climate risk in yourorganization, etc.
(38:04):
Etc.
And then, once you startbilaterally and create some
common ground, then you get thethird person in, then a fourth
person in, then it's a boardcommittee, then it's two board
committees and then it becomes aplenary board conversation.
But to walk in and say, hey,haven't you seen?
No, I haven't seen, becauseI've seen another 10 other
(38:27):
things that are top of the riskregister, that have to be
operationalized.
And then you've lost themomentum, you've lost your
argument and you've lost yourchance to make an impact.
So you have to be verymethodical and you have to be
very well studied and you haveto punch very succinctly.
Speaker 2 (38:52):
Great.
Thank you, tina.
As you know, our theory ofchange at the Climate Governance
Initiative is that it's thenon-executive director in many
jurisdictions that has thatspecial responsibility to ask
difficult questions in theboardroom, and we encourage and
(39:13):
motivate them to do that and wehelp them to understand the
answers that they get too.
I know that you have a lot ofexperience working with one of
our chapters, chapter Zero inthe UK.
You're a fellow of Chapter Zeroand I wondered if I could
encourage you just for a coupleof minutes to talk about the
(39:34):
benefits to board directors ofengaging with the chapter
network and with fellow boarddirectors who have come to the
same party.
Speaker 3 (39:48):
Absolutely.
There is no better therapysession than a session with
Chapter Zero, because you havethe theory and then you have the
reality of practice and, inthat reality of practice,
understanding how other peopleare dealing with it, how they
are managing it.
How do they input climatemetrics into the remuneration
(40:13):
process?
How do they make sure thatclimate is operationalized in
the risk register and cascadeddown the organization?
The best way to find out ideasand methodologies to get your
(40:34):
executives to understand isthrough conversations with
un-meds.
People that have succeeded andpeople have failed have equally
important insights to providefor you Now.
I've run about 400 interviewsso far for my policy work.
So one of again the motivationsbehind all this policy work is
(40:57):
that I get to be a betterdirector.
Why?
Because I hear how peoplesucceed and how people fail and
hopefully I try to fail indifferent ways and succeed in
the same ways, plus differentways as well, which I will go
back and share in 4i, likechapter zero, and help people
(41:20):
understand.
You know how do we deal withthis now?
Because we are in the peckingorder.
We're getting lower and lowerand lower, unfortunately.
Speaker 2 (41:29):
Yeah, thank you, tina .
This has been such a goodconversation.
Thanks so much for spendingthis time with us.
We try to ask all of ourinterviewees a couple of final
questions, so let me ask youthis what advice would you give
(41:50):
to an ed, an independentdirector, who is trying to speak
up for climate in the boardroom, perhaps for the first time,
trying to get the board'sattention onto that topic?
Speaker 3 (42:06):
Three things Financial materiality.
Understand climate context inyour organisation and build
alliances in the boardroom.
Don't throw a question becauseyou throw an empty question.
You'll get an empty answer back.
Because you throw an emptyquestion, you'll get an empty
(42:32):
answer back.
You throw a question that isserved in a can.
You'll get a can't answer back.
Do your homework, do yourfinancial materiality or poke
financial materiality and youwill start getting the
conversation going.
Speaker 1 (42:48):
And my question is more at the organisational level
.
So if you had to give one keymessage to boards and
organisations in light of theclimate crisis, what would that
be?
Speaker 3 (42:58):
Financial materiality insurance.
Will you have insuranceavailability or pricing to do
what you're doing today?
Speaker 1 (43:12):
Yeah, I'm hearing insurance more and more coming
up.
That's really interesting.
Wonderful, Tina Mavracki.
Thank you so very much forsharing your thoughts and
insights with us today.
Speaker 3 (43:23):
This has been fantastic for me as well, and I
really want to congratulate youfor the amazing work that you're
doing out there and also forconvening directors and giving a
lot of information and toolsout there for people to be able
to do their job well.
So my thanks to you.
Speaker 2 (43:39):
Thank you.
This interview was recorded inOctober 2024.
The Climate GovernanceInitiative is a global
non-profit network reaching morethan 100,000 board directors.
Most of the world's greenhousegas emissions come from the
private sector, so the centralquestion the initiative asks is
what if every company had aclimate target and a plan to
(44:02):
meet it?
We work globally, with over 30chapters reaching board
directors in over 70 countries,and our work draws on the
principles for effective climategovernance set out by the World
Economic Forum.
If you want to know more,there's a link in the show notes
where all our content isavailable for free and where you
can find your local chapter.
(44:22):
In our next episode, we'll betalking to Miha Kusak.
Miha has over 30 years ofexperience in international
banking, ranging from corporatebanking, investment banking,
corporate finance.
He's worked with capitalmarkets and wealth management,
and he is the chair andco-founder of Chapter Zero
Slovenia.
(44:43):
I'm really looking forward togetting his perspective from the
financial sector in our nextepisode.
Popular Podcasts
Are You A Charlotte?
In 1997, actress Kristin Davis’ life was forever changed when she took on the role of Charlotte York in Sex and the City. As we watched Carrie, Samantha, Miranda and Charlotte navigate relationships in NYC, the show helped push once unacceptable conversation topics out of the shadows and altered the narrative around women and sex. We all saw ourselves in them as they searched for fulfillment in life, sex and friendships. Now, Kristin Davis wants to connect with you, the fans, and share untold stories and all the behind the scenes. Together, with Kristin and special guests, what will begin with Sex and the City will evolve into talks about themes that are still so relevant today. "Are you a Charlotte?" is much more than just rewatching this beloved show, it brings the past and the present together as we talk with heart, humor and of course some optimism.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.