10 March 13
Good governance pays off. AICD has reported (see article) that "The survivors followed the ASX principles on committees more closely than those that did not survive". The article describes research on Board governance for IPO companies.
One of the major steps we undertake when evaluating and progressing capital raising for a company is to review the Board of the company. Quite often we will work with the company to establish a Board and move the company from a Pty Ltd to a Limited company. This helps move the governance to a "higher level" and allows investors to be more comfortable that a minimum level of governance and independent accounting rigor has been implemented. The move also provides for improved accountability to shareholders with an AGM having to be held after the audited accounts have been finalised and submitted to ASIC.
Another mechanism to strengthen the expertise around the company is to appoint "advisory Board members". This mechanism allows emerging and growing companies to have access to expertise while the company is putting in place it's Board and other governance regimes.