Good Corporate Governance: Why Beerenberg says it's the asset for their FUTURE success
Beerenberg, the well known and loved Adelaide Hills food producer, attributes its success over seven generations to its focus on systems and processes. As a family-run business, it's sometimes easy to let systems and processes fall by the wayside as family members can often be less formal about how they operate. Beerenberg, importantly, didn't go down this path and, for example, they have separate management and advisory board meetings. Having a strong focus on reporting also means they can immediately see which departments have issues and focus in on those areas. "If you've got good corporate governance and good structures, you are future-proofing your business," Anthony Paech, Managing Director. Some of the corporate governance lessons which Beerenberg implemented:
The board has non-family members sitting on it
The group had a five-year road map in which most of the staff get involved in
They have an independent chairperson to help deal with potential conflict
Good corporate governance is not about good corporate management. But rather having the systems and procedures in place to future proof your business so it can grow and expand. Without having the right structures in place, businesses that look to expand inevitably run into issues. You can read the full story here.
Implementing good corporate governance:
1. Board Diversity and Conflicts of Interest
As a business leader, you very well know how important diverse opinions and expertise are towards sound decision making. Without an outside voice, it was almost inevitable some businesses will find themselves in a downward spiral. Power struggles can appear and directors can start to pursue personal interest at the cost of shareholder interest, especially in family-run businesses. It's good practice from time to time to re-examine your board and shake it up to introduce diversity and minimise entrenchment of thought. We recommend an ideal board size of 10 directors, with diversity in representation, gender, experience, diversity, and ethnicity.
2. A Culture of Transparency and Social Responsibility
Transparency across all levels of your company is crucial if you want your board to pick up the slightest risk of non-compliance. It might be embarrassing for your junior managers to point fingers at you, but it’s for the benefit of your company to ensure that they feel comfortable enough to do so. It is likewise important for your employees to recognise and respect their social responsibilities, and that not every decision can simply be driven by profit. For the long-term viability of your company, you should promote a culture of open dialogue. You need to capture the valuable opinions of your employees. We've seen many recent examples where companies driven by the bottom line have failed on their social obligations, Dreamworld is one such case that springs to mind.
3. An Effective Compliance Program
Take a proactive approach to compliance. Your compliance program should contain formal procedures and a team of astute independent compliance officers equipped with the necessary investigative talent. The bigger your business grows, the more distanced your executives will be from everyday employees. Accordingly, you need to have an effective compliance system that identifies and prevents corporate wrongdoing.
Getting in touch:
If you would like to schedule a consultation about governance in your organisation – Contact us for a no-obligation chat.