CEO Q&A: Alan Edwards, Metlifcare chief executive

Outgoing CEO Alan Edwards says Metlifecare ensures there is a strong value proposition for residents, staff and the investment community.

Edwards leaves the business next June after six years leading it. He talks to Anne Gibson.

Tell us a bit about your background, before you came to New Zealand.

After school I completed a Higher Diploma in Education which led to a six-year teaching career. I taught physical education and mathematics. During my time teaching I completed a Bachelor of Arts degree. In 1988, I joined Aberdare Cables, the largest manufacturer of power, telecommunication, optical fibre and instrumentation cables in South Africa, or Africa for that matter. I worked there for 10 years and while there, completed a Master of Business Leadership degree. Two years later, my family and I left for New Zealand, arriving here in July 1998.

What was Metlifecare like when you arrived and how would you describe it now?

I started in August 2009. At this time Metlifecare, like many businesses around the world, was feeling the effects of the GFC. Occupancy was low at 88 per cent, debt levels were high, The Poynton in Takapuna had only six apartments occupied, Australian-based Retirement Village Group held 82 per cent of the stock and the market capitalisation was around $220 million. Six years later we have a values-led and aligned company culture, we have grown units and beds by 50 per cent, occupancy is 98 per cent, we have no core debt, The Poynton has all 256 apartments complete, we have opened two new villages - The Orchards and Greenwich Gardens - and the market capitalisation is circa $950 million. Metlifecare has grown strongly since the three-way merger with Vision Senior Living and Private Life Care in July 2012 and there has also been strong growth in the development pipeline which now has more than 2000 beds and units to be added to the 4392 that already exist. Together with this, underlying profit has grown tenfold from $5 million to in excess of $50 million.

Why have you decided not to build a new village on the Manukau Golf Course site in Auckland?

Among all the accountabilities carried by the executive and the board, the responsible allocation of capital is high on the list. As we stated in our release, with all the opportunities available at present, we believe the risk/return thresholds and capital allocation criteria for this site were not adequately met.

What's your view of calls for higher wages and union agitation, particularly attending your AGMs?

We have a very engaged and supportive relationship with our staff and were very pleased to announce a groundbreaking pay increase in August this year. In fact, staff and union members stood up at this year's annual meeting to thank management and the board and talked about what the pay increase meant to them. The union's Alistair Duncan said the move "sets a new and impressive benchmark". One thing our residents value most is consistency of care provided. We know this is solved by loyalty and retention which in turn is solved by meaningful remuneration levels, access to learning frameworks and career pathways. Our employee value proposition covers all these areas and now offers those wishing to progress their careers with a real opportunity to do so.

Investors love the retirement sector for big returns but is it ethical to make so much from older people?

Whether for profit or not-for-profit, businesses exist to provide beneficial outcomes for their stakeholders. In our case this translates to our residents, our staff and our shareholders. With not-for-profit business the stakeholders are the beneficiaries, their staff and their consumers. The board and executive team are tasked with the responsibility of maintaining an equitable balance between each group of competing stakeholders. Rewarding one group to the disadvantage of others risks losing their support. We seek to ensure that there is a strong value proposition for residents, staff and the investment community.

What are your plans when you go?

Between now and June my sole focus is ensuring that we deliver yet another year that meets expectations. Thereafter, I will spend some quality time with my wife Jenny and my grown up children before seeking to engage with businesses firstly in New Zealand and abroad should any opportunities arise. I am a strong believer in and passionate about, Peter Drucker's famous quote, "Culture eats strategy for breakfast!" As a result, I will seek to assist businesses to address as a strategic priority the culture of the business through conscious leadership which walks the talk. It is only possible to truly excel where there is strong alignment between the values of the board and executive and there is an alignment of these throughout the business. Where this exists, an unassailable competitive advantage can accrue. For example, at Metlifecare, I scan in at work every morning and as I go home in the evening. I do so because our caregivers, gardeners, kitchenhands and other members of the hourly paid Metlifecare team have to. For me, I cannot expect others to do what I am not prepared to do myself.