Vantage Blog

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05
Jun
2018

Achieving balance on a Board

There is no doubt that Boards and their governance are headline grabbers at the moment. And for good reason. There’s clearly been failures in some of the bigger organisations. And accountability obviously rests at the feet of the directors in many cases.


However, a big risk in all of these discussions is an overreaction. Not just in terms of regulation, but just as importantly in terms of board focus.


One response could be for nervous boards to disproportionately focus on governance above all other responsibilities. Yes, in some cases governance clearly needs to be tightened, but not to the detriment of a clear focus on looking forward; tackling the big challenges and opportunities that face each and every organisation.


On the boards that I am involved with, and in particular that I have or am currently chairing, I have a 70/20/10 framework.


Our aspiration is to focus discussions 70% on strategy (looking forward), 20% on performance (looking back) and 10% on governance (looking both ways).


Not always easy to do, and urgent challenges can get in the way, but it is a good frame within which directors can think about their role and the value they can truly add.


However, the trick is to firstly ensure that the governance foundation is firm and is regularly reviewed against a changing environment. Culture is key. Having the right systems and processes are important, as well as ensuring they are regularly stress checked.


Similarly, for performance – what are the key metrics being used, and how open and transparent are management in discussing performance issues with the board. Insights around performance obviously are key inputs to the explorations in the strategy space.


Once there are transparent and robust foundations around governance and performance, the board should be able to focus on the most critical area in my opinion – strategy. As a board you need to agree the process and approach you are going to take with management to review, refine and stress test your strategy – today and into the future.





 I find it handy to have a board toolkit – a set of frameworks, tools and models that suit each board in the four areas of strategy, performance and governance. But also, in a fourth – capability. What processes, skills and experiences do the board need to do its job well.


I am happy to share my board toolkit - please feel free to contact me at jatkins@vantagemarketing.com.au or on 0419 516 655.


James Atkins 

Vantage Strategy & Marketing

There is no doubt that Boards and their governance are headline grabbers at the moment. And for good reason. There’s clearly been failures in some of the bigger organisations. And accountability obviously rests at the feet of the directors in many cases.  ..

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28
Sep
2014

Vantage September 2014 Newsletter Out Now

To paraphrase a former prime minister it quite often seems that every parrot in the pet shop is squawking about value propositions! But what is a Value Proposition, and how do you best deliver real value to your customers? In this month’s post we make clear what a value proposition really is, how you can define and refine it, and also provide some simple tools and examples to do just that. 

You can also watch our recent webinar on value propositions by clicking here.


Also in this edition:
We hope you find something of interest. 

Please feel free to contact us to discuss how any of these issues may impact your business.

Best wishes,
Vantage Strategy & Marketing

To paraphrase a former prime minister it quite often seems that every parrot in the pet shop is squawking about value propositions! But what is a Value Proposition, and how do you best deliver real value to your customers? In this month’s post we make clear what a value proposition really is, how you can define and refine it, and also provide some simple tools and examples to do just that. 

 ..

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16
Sep
2014

Appointing an Outsider: The need for an independent advisory board in a growing family business

This post is by our colleague Greg Gunther from Gunther & Associates: Family businesses face the same challenges as any other enterprise. In a family business however, things can get complicated as decisions may be influenced by relationships and emotions, which would not be an issue in other organisations. This can create difficult situations especially when it comes to choosing someone outside the business to join a family business board.


When choosing someone to join the family business board, two options are usually considered:
  1.  Having an experienced and/or elder family member occupy the position; or
  2.  Appointing an independent director.
Option 1 is an obvious choice. The 2013 MGI Australian Family and Private Business Survey of 5,000 family businesses showed there is some reluctance to the idea of considering an external person as part of the family business board. 62% of the families surveyed do not have a formal Board of Directors. Of those who have a formal Board, 83% do not have a non-family, non-executive director on their Board. This may not pose an issue when everything runs smoothly, but when things get rough it can be tricky due to the uniqueness and complexity of a family business. A qualified adviser can bring a new perspective and help with the implementation of a corporate framework which will provide structure and clarity to the business.

Reluctance to appoint an independent director on family boards

It can be really tough at times to hand over the management and executive decisions of a family business to someone who is not a family member. In the survey 49% of the family firms surveyed did not have independent directors on their board due to their desire to retain privacy in the business, whilst 29% said that the skills required at Board level exist in-house. 11% of them weren’t able to find someone suitable, 7% said it's too expensive. This shows that the majority of family firms keep their boardroom doors locked, reluctant to let in an outsider. 

Conflicting interests and family ties are often the main reason why business decisions become so complex in family businesses, and this is where an adviser from outside the business can step in. They can help to make the best decisions and balance the needs of the business with the desires of the family members involved.

Why families should consider appointing an outsider to their Board?

The role of an independent advisory board in a family business can add a higher level of expertise and experience and help with the growth and expansion of family firms.

Here are the main reasons:
  • They facilitate the clarification of goals and roles.
The overlapping of ‘family’ and ‘business’ often blurs the path to making everyone accountable to agreed roles and shared business goals. Objective facilitation from an independent director allows for looking after the overall well-being of the family business and challenging the family in pursuit of its long-term and short-term objectives.
  •  They offer impartial advice.
An independent adviser can confront issues and give their impartial and unbiased guidance on matters without any conflict of interest and tangled emotional issues.
  • They see what the family often miss.
Independent board members can often identify critical issues of concern like succession planning or a family dispute as it develops, and act as a mediator to work it through.
  • They can guide the future leaders in the family.
An independent adviser can also mentor a new generation of leaders and prepare them to lead and grow the business in the future.
  • They serve as an impartial channel for communication to all family shareholders.
An independent adviser can act as a mediator during major disputes that arise in family boards and help to resolve issues, especially if there is poor communication between family members.
In conclusion, having an independent director on the board is something every family business should consider. They can add value by bringing a new perspective to the board and can facilitate better communication between family members within the business. 

Sources:

About Greg Gunther
Greg has helped many owners of small to medium-sized businesses in his role as a director, board member, mentor and consultant. He has an intimate understanding of the challenges and opportunities facing business owners today. With his compassionate nature and extensive experience Greg helps his clients to create a valuable business asset. Visit Greg’s website at www.guntherandassociates.com.au

Contact Greg at greggunther@guntherandassociates.com.au
Connect via LinkedIn

This post is by our colleague Greg Gunther from Gunther & Associates: Family businesses face the same challenges as any other enterprise. In a family business however, things can get complicated as decisions may be influenced by relationships and emotions, which would not be an issue in other organisations. This can create difficult situations especially when it comes to choosing someone outside the business to join a family business board. ..


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