Corporate Governance : Unlocking Potential Growth - Are Boards Underutilised in Growth Strategies? Is New Zealand's SME Sector Being Held Back by a Dearth of Director Talent? the ANZ Bank's Privately Owned Business Barometer Sheds Some Light on Such Questions, as Ellen Read Reports

New Zealand Management, September 2007 | Go to article overview

Corporate Governance : Unlocking Potential Growth - Are Boards Underutilised in Growth Strategies? Is New Zealand's SME Sector Being Held Back by a Dearth of Director Talent? the ANZ Bank's Privately Owned Business Barometer Sheds Some Light on Such Questions, as Ellen Read Reports


Byline: Ellen Read

Privately owned medium-sized companies are valuable contributors to the New Zealand economy with an estimated 3500 of them contributing an estimated $110 billion a year in revenues.

But could they be contributing more?

The ANZ Bank's Privately Owned Business Barometer identifies barriers to growth and suggests that the underutilisation of boards may be preventing some of these companies from acheiving their maximum growth potential.

Given their importance to the national economy, this not only frustrates the owners' individual aspirations, it has negative economic implications for the whole country.

ANZ managing director of institutional, corporate and commercial banking Nigel Williams says there is a lot of talk about the need for New Zealanders to be world champions not only in the sporting and cultural arenas, but in business too.

"We look enviously at Finland where a former gumboot manufacturer became a world leader in mobile telephony; to Europe for its reputation in haute couture and to Japan for world leaders in the design and manufacture of household electronic products and motor cars," he says.

The stories of most of these firms are very similar: they started small and grew to become world leaders.

"In their home markets Nokia, Versace, Sony and Toyota have even greater significance than abroad. As icons they create national pride and confidence; as economic powerhouses they create enormous wealth for their employees, suppliers, shareholders and the economy," says Williams.

In order for the same to happen here, some significant issues currently confronting the privately owned medium-sized business sector must be addressed. The Barometer identifies these.

1) The role of boards. Do the ones in place really cut the mustard and do business owners really understand the role boards can play beyond governance?

2) Barriers to growth. Is complacency stifling business growth or is a lack of knowledge (about how to grow or how to fund growth) a factor? Could greater access to advice and expertise help?

3) Growth by acquisition. Is lack of capital a constraint to growth and why aren't more companies growing via acquisition?

4) Motivators for change. What are the real motivators for change and do owners want more options? Forget succession - if anything, it's staggered exits that many owners are really after.

5) Is value being destroyed? Are majority shareholders holding onto the reins too tightly and for too long?

6) The role of management's family. Why is management seemingly being ignored and is handing down to family becoming an increasingly unrealistic goal?

Williams says an increased and wider use of boards would address some of these issues and expresses concern that the survey found 31 percent of companies surveyed had no boards at all, of those with boards, only 57 percent met regularly (monthly or bimonthly), and 48 percent had no independent directors.

He believes the sector is 'holding back', not achieving maximum potential which, given its role as as the economy's engine, is of concern at a national level - and that a lack of boards and advisors is a key issue.

Also causing concern are findings that the sector has looming succession issues, that there was a reluctance to take on risk to achieve maximum potential and that glass ceilings in New Zealand businesses meant untapped growth potential.

While there are many reasons for this (skill shortages or access to capital for starters), Williams says it is clear that directors and boards are underutilised and their increased involvement could help address the current problems.

"Boards can offer more than just governance, yet one third of these companies have no boards at all, only half of boards which are in place meet regularly and only half have independent directors," he says. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Corporate Governance : Unlocking Potential Growth - Are Boards Underutilised in Growth Strategies? Is New Zealand's SME Sector Being Held Back by a Dearth of Director Talent? the ANZ Bank's Privately Owned Business Barometer Sheds Some Light on Such Questions, as Ellen Read Reports
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.