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Megan Scott on multitasking in a COO world

Megan Scott is Chief Operations Officer (COO) for Martin Currie Australia, a Legg Mason affiliate.

 

GH: The Chief Operations Officer has been described by Accenture as the least understood role in business. What does a COO do?

MS: Other industries would be different, but the simplest way to describe my role is that our business has three parts: investment, distribution and operations. Operations supports the other two while looking over the entire business, including compliance, human resources, technology and office management.

GH: I expect as you went through your education, you did not set your sights on becoming a COO one day. How did you reach the role and what skills do you need?

MS: That’s right. I did a BA at university because I wanted to learn broadly, then I worked in travel before stumbling into this industry through a friend. I really enjoy the operations side. Obviously, organisational skills are critical, and I’ve always been the person who had the list going and making sure friends had their diaries up-to-date. Also, good communication including talking to people at different levels of the business. Curiosity, and asking what might seem a dumb question. And being able to multitask as you move from one part of the business to another.

GH: From the mundane tasks one minute to complex tasks the next?

MS: Yes. I had a quick meeting recently with the office manager on our coffee policy, then the next meeting was an Executive Risk Group talking to our Edinburgh office. You need to be able to wear many hats and switch them according to the decisions required.

GH: And hold many thoughts in your head at one time.

MS: I’ve had a bit of practice because I’m also a Mum and I have two daughters, so I have to move off what the kids are doing and on to the business every day. It’s a skill you can learn.

GH: How do you prevent yourself spending all your time in the day-to-day operational issues and problems to focus more on the big picture strategies?

MS: That is the biggest challenge, not getting bogged down in the detail. I delegate where I can and I have excellent people around me, plus I try to block out time in my diary for thinking and the big picture. I also write a log of issues as I think of them, to revisit later when I have time. But I admit that more often than not, the thinking time gets interrupted. We all struggle with the right mix.

GH: Martin Currie is a global business within Legg Mason, so how does the Australian operation contribute to policies or innovations?

MS: Yes, we have offices in Melbourne, Singapore and Edinburgh, and each region has different regulations and legislation and we can’t adopt everything here. Reece Birtles our CIO is on the Global Executive team and we share ideas and best practices. For example, we recently launched an Emerging Markets ETF here and with offices in this region, we can trade to ‘equitise’ ETF flows during our day while Edinburgh is asleep.

GH: What drove the strategic decision to launch Active ETFs in Australia, which is a relatively new listed product compared with the most-established Listed Investment Company structure?

MS: I admit it was a challenge when we started the Active ETF conversations with the different intricacies versus our established managed fund processes. It was a new way of doing things. The usual Legg Mason products gave us cash flow numbers once a day complete with application forms. ETFs are tradeable with flows in and out multiple times a day. It involved many conversations driven by BetaShares and Legg Mason. We’ve done the hard part early with RINC* and EINC* and it seems people want Active ETFs.

GH: I’ve personally had an investment in RINC since it was first launched, and the performance has been excellent with exposure to listed property and infrastructure in the last year. I see it’s taken about $35 million. Is that considered a good result given it was launched at an ideal time?

MS: It was the first ETF we launched, and Active ETFs is a new structure. We’ve done a lot of marketing to develop more platform and adviser support, and we’re pleased with progress.

GH: It’s an open-ended ETF, so if someone invests a large amount at say 10.30am, would you look to do a transaction off the back of that?

MS: It’s a decision for the portfolio managers. We have guides and ranges where we will deal out the exposure, so a significant flow might be invested immediately. We also must watch transaction costs such as brokerage and custodian fees, so it’s better to deal a net amount than small pieces.

GH: The last 12 months with the Royal Commission and consequences for ASIC and APRA and the industry generally have been significant for anyone with compliance responsibilities. Has it changed your role much, and is there potential for increased scrutiny to go too far and stifle innovation?

MS: Certainly, compliance roles and functions have increased, but we have always focused on being transparent. The Royal Commission problems were caused by people not being transparent and not acting in the best interests of clients. Managing other people’s money should never be taken lightly. As long as you stay true to the right principles, I don’t think innovation will be stifled. But there’s certainly more compliance focus, also driven in Europe by MIFID II.

A few of us, including in the investment team, have completed the Australian Institute of Company Directors (AICD) course, to better understand what boards and management are supposed to do. Having done that course, I would not want to be a director, but we want better engagement and discussions with boards.

GH: What parts of the business potentially keep you awake at night? You mentioned technology earlier, there’s plenty of scope for problems there.

MS: On technology, I ask a lot of dumb questions. I’ve been in this role for a little over 12 months, and the main thing I think about at night is whether I completed what was on my list and added it to tomorrow’s list. But it doesn’t keep me awake … ask me again in a year and it might have changed. Cybersecurity is an issue we’re constantly watching, but I have a lot of support with the average tenure in our team at 14 years.

GH: Do you have any role models? I guess the highest-profile female COO in the world is Sheryl Sandberg at Facebook.

MS: She’s played an important role, but rather than look up to a Facebook executive, I try to learn from leaders more generally. For example, Jacinda Ardern’s ability to mix work and the rest of her life so seamlessly, showing empathy one moment while getting things done the next. As a COO, you must get things done, but in a people-focussed way.

GH: To what extent are you involved in investment management?

MS: I usually attend the morning meeting, if I’m not doing school drop offs – my husband does the school more often than me, part of the shift from what was once considered a classic female role. Investing is the heart of what we do so I want to hear the stock updates and discussions. I’m responsible for ESG and I help analysts keep on top of best practices. It’s a big focus in both the Edinburgh and Melbourne teams. ESG is still evolving in the industry in general, and many of our conversations with companies focus on governance in particular. For an analyst, ESG is another factor to consider, and there are different levels of understanding across our business and the entire industry.

 

Graham Hand is Managing Editor of Cuffelinks. Megan Scott is Chief Operations Officer at Martin Currie Australia (a Legg Mason affiliate). Legg Mason is a sponsor of Cuffelinks.

This article is general information and does not consider the circumstances of any investor.

*The BetaShares Legg Mason Real Income Fund (ASX:RINC) and BetaShares Legg Mason Equity Income Fund (ASX:EINC) are managed by Martin Currie. The (unlisted) Legg Mason Martin Currie Real Income Fund won the ‘Retirement and Income Focussed’ category at the 2019 Money Management/Lonsec Fund Manager of the Year Awards.

For articles and papers from Legg Mason, please click here.

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