The right mix

  • Date:01 Nov 2015
  • Type:Company Director Magazine

Translational Research Institute’s CEO and chair share their views on the importance of skills diversity on medical research boards. Tony Featherstone reports.

There is much debate on Australia’s shortcomings in technology commercialisation. Less considered is the role of governance in innovation and whether boards have the right structure and composition to support a stronger culture of commercialisation.

The medical research sector is a case in point. Australia is blessed with dozens of medical research institutes that collectively produce world-class research. But not enough of their ideas are commercialised and the best ones are often sold too early to overseas companies. Their boards usually include healthcare experts, academics, business people or other stakeholders who generously volunteer.

Commercialisation experts, venture capitalists and intellectual property specialists are harder to find on such boards. Also, many medical research institutes have “representative boards” where director selection is tied to stakeholder groups. Their directors must balance the institute’s needs with those of their employer – sometimes an uncomfortable governance mix.

From a commercialisation perspective, more debate about boards is needed: should medical research institutes have a higher proportion of independent directors? Do their boards need greater commercialisation skills? And should their directors be paid?

The Translational Research Institute (TRI), one of Australia’s newest and largest medical research institutes, is creating a unique paradigm to improve technology commercialisation and overcome some of these issues. In doing so, it could redefine how medical research institutes approach governance.

“Australia has had world-leading innovation but poor delivery of medical products in the global health sector,” says TRI CEO, Professor Carolyn Mountford. “Over the years, a lack of commercialisation has cost this country income, employment opportunities, and led to a “brain drain” of some of our best talent overseas. We must reverse this trend by developing stronger commercialisation skills across research teams, management and boards.”

The TRI opened in October 2013 after receiving $354 million in government, university and philanthropic funding. Its seven-storey, purpose-built facility on the Princess Alexandra Hospital Campus in Brisbane is among the largest research centres of its type in the southern hemisphere.

TRI has a different business model and structure to most medical research institutes that start as independent organisations, build affiliations with other research institutes, or are rooted in academia. It was formed through a collaboration of the University of Queensland, Princess Alexandra Hospital, Queensland University of Technology, and Mater Research.

Mountford became TRI CEO in February 2015. She has big shoes to fill. TRI’s founding CEO was Professor Ian Frazer AC FAICD, the 2006 Australian of the Year who is best known as the co-creator of the cervical cancer vaccine, Gardasil.

Mountford was Professor of Radiology at Harvard Medical School until 2013. She has been a pioneer among Australian scientists in technology commercialisation and her nine years in Boston highlighted differences between Australian and US boards in medical research.

“US medical research boards tend to have more commercialisation experts compared to those in Australia,” Mountford says. “They also renew their boards more frequently as the organisation’s strategy changes. The majority of Australian medical research boards have a heavier loading of academics and healthcare specialists. These directors play an important role, but if our medical research sector wants boards that can help their organisations and drive commercialisaton, it needs the right balance of governance skills.”

The right connection

Mountford says the most effective medical research directors are “connectors”. “Obviously you need a mix of directors and a focus on governance and strategy. But having directors who are able and willing to connect a research institute to local or international organisations, and open doors, is invaluable in innovation and commercialisation.”

The TRI board is about as connected as its gets in Queensland medical research and healthcare policy. TRI chair, Dr David Watson, is a former leader of the Queensland Liberal Party and Minister. Directors include Dr Richard Ashby AM, the health service CEO of Metro South Health; Professor Arun Sharma GAICD, deputy vice-chancellor (research and commercialisation) at the Queensland University of Technology; Jim Walker AM, vice-president and managing director of Rockwell Collins Asia Pacific and Professor Robyn Ward AM AAICD, the deputy vice-chancellor (research) at the University of Queensland.

Watson had two main criteria when recommending directors for TRI: they had to be among the top people in their organisation, and have research and commercialisation skills. He wanted directors who intimately knew what was going on in their organisations and could facilitate research connections and industry collaboration in Australia and overseas.

“If your organisation is in the commercialisation space, you need directors who understand that process,” Watson says. “Our directors have a lot of experience in technology commercialisation – not just research – and are well respected and connected in their field.”

The TRI board has overcome challenges. It guided the establishment of TRI, the construction of a state-of-the-art building that houses 850 staff, and a research commercialisation strategy that is untested in Australia and has its doubters.

Like many medical research institutes, TRI has a representative board. Most of its directors represent organisations that formed TRI and collaborate through it. Watson says the representative board model in medical research has pros and cons. “The tendency is that you mostly get medically trained people as directors. They have PhDs, good research records, senior positions, and are good people. But they can be clones of each other, even when from different organisations.”

TRI has capacity to add two independent non-executive directors, something Watson says the board is considering. It could be an opportunity for TRI to expand its commercialisation skills and connections, and add to an already strong board.

Watson is pleased with TRI’s early results. The CEO transition between Professors Frazer and Mountford went smoothly. Frazer stayed on as an ambassador, and TRI continues to attract leading researchers and collaboration interest from local and international companies.

Watson’s working relationship with Mountford is an important piece of the puzzle. “Ultimately, the board’s biggest job is to pick the right CEO, and we have done that twice, first with Ian [Frazer] and now Carolyn [Mountford]. As in any organisation, the CEO/chair relationship is built on mutual trust and professional respect. I’m a great believer that the CEO, not the board, drives the business. The board can monitor governance, strategy and performance, but ultimately we are there to support the CEO however we can.”