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The power of good governance

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Kate de Lautour

Last week, Business Hawke’s Bay and The Icehouse welcomed 180 of Hawkes Bay’s business leaders to a sold-out event at Mission Estate with speakers including former Heinz Watties Australasia CEO David Irving and rowing legend Rob Hamill. The theme for the night was “inspiration” with Icehouse co-founder David Irving using his experience in governance roles to inspire businesses to aim for increased growth, via more effective governance.


Online industry expert Wendy Schollum is well aware of the power of good governance. The managing director of Napier based web agency Xplore has had a board in place since buying the business in 2006. She says redirecting her board to place more emphasis on strategy, has enabled the company to operate more efficiently and become far more agile.

“We’ve always placed an emphasis on strategic planning at Xplore, but in the past there was a tendency for the board to get caught up on the “how” rather than focusing on the “what” and we were losing valuable strategic planning time at every meeting.”

Like many boards, the Xplore governance team made the mistake of meeting too infrequently and when they did, Wendy found there wasn’t as much progress as she would have liked.

“We realised that here we were, trying to work out how to implement things as we devised new strategies and then we were taking those plans back to the Xplore team.  The problem was that the team often had better, more hands-on ideas on how to actually make the new ideas work, so the board’s efforts in this area were largely wasted time.”

A shift in thinking now has the board focusing exclusively on strategy, measuring progress and resourcing, while a new leadership team is being formed to allow the wider Xplore team to help work out how to implement the new ideas.

“As an owner manager I never truly get to focus only on the “what” of business development, but I’ve learnt through our training with the Icehouse that it’s imperative that board meetings don’t get hung up on the “how” – that’s where our incredibly talented team can contribute.” 

Given the chance to implement a few more elements of the revised strategic plan, 2014  holds some exciting service and offering changes that will further differentiate Xplore in the market.  

“We owe this clarity to our new understanding of good governance.”

David Irving sees 75% of SME boards in New Zealand as “patsy” or towing the line and often that’s because the owner manager has set it up that way.

“Owner managers are often threatened by boards and will stay with the tried and true trifecta of lawyer, accountant and banker.”

But these people are never truly independent as they are being paid by the company and won’t always have the wide range of skills required to advance the business.

An effective board should have skills that the owner manager does not have, David said.

“A chairman should fill the capability gaps within the company, is the most important person to the owner manager and should be seen as the trusted advisor, inside the tent.”

An exceptional chairman will have a deep understanding of the business, be future orientated, and be capable of making the tough decisions.