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Corporate Governance = Improved Performance + Value Creation

Intergenerational wealth and business transfer is a hot topic for both the Baby Boomers and Generation NeXt/Gen Y of the hotelier industry, consequently the role of the family board is a critical one for wealth preservation as assets are transitioned through the family.

We recently hosted author and international guest speaker Peter Crow to Brisbane.  Peter delivered an energetic account of the role and practical considerations family and private business owners should contemplate to derive value creation from their Board. Peter travels globally, advising, writing and speaking on corporate governance and strategic management with advisers and boards of family and private business intent on realising the potential of their company.

During the events in Brisbane recently Peter shared three key inputs crucial for a Board:

  • Purpose,
  • Strategy, and
  • Structure

which when implemented effectively drive Performance and Value Creation.

Alex Fraser, Director of Hanrick Curran Corporate Finance and experienced adviser to Hanrick Curran clients on Corporate Governance of family and private business, was invited to participate during the event on the expert panel.

Alex revealed, in his 30 years of corporate advisory experience, that the most effective multigenerational family businesses have several common traits, in my experience these also hold true for independent hoteliers:

  • They are clear on the vision or purpose of the family business, which cuts to the heart of why the business exists to give clear direction for future strategy
  • They have a strong set of values that underpin the behaviours and culture within the organisation
  • They have an engaged board who bring strategic competence to the role
  • They have a management team who have clarity of their roles and responsibilities

Clear signs to a business owner of a need to investigate improved corporate governance practices include the presence of one or more of the following:

  • a business with multi-generational family member involvement that lacks an agreed transition plan
  • a growing business with multiple growth strategies competing for resources
  • duplication of responsibility and/or avoidance of key responsibility areas due to the skill sets of the current shareholder/management team.

With the pub business being famous for being “in the blood” the role of governance should be at the forefront of any venue owner’s mind in wanting a smooth transition of assets from one generation to another, whilst balancing the mix of oversight and autonomy at the heart of each generation’s goals.  A well designed and functioning family board will have an active contribution to governance and a successful multi-generational transition.

A recording of the event is available at www.hanrickcurran.com.au/HCTV. If you would like to explore how to improve the Governance practices in your business please your usual Hanrick Curran representative or call Peter Maletz on 07 3218 3900.

 

Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.