Governance Special report
Good governance structure benefits farm business Good governance can get a business humming no matter what it’s size. Anne Lee talked to Fonterra director and chairman elect Peter McBride about what builds good governance and what he’s learned during his governance career that can be applied to farming enterprises.
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undamentals such as purpose, values, strategy, holding management to account and managing risk are all keys to good governance, but even with all that in place things could still go pear shaped if you haven’t got the people factor right. Former Zespri chairman now Fonterra director Peter McBride is set to take over as chairman of New Zealand’s largest cooperative company later this year. He’s had close to 20 years’ experience in governance and says getting governance right can really get a business humming not just because of the discipline and direction it brings but through the wealth of experience directors or even a single independent advisor can offer. “Businesses can sometimes think their assets are just their fixed assets and the balance sheet – they can tend to really undervalue human capability and the benefits experienced, capable people can bring at that governance level.” The size and structure of a board will depend on the business, Peter says. “It will depend on the scale – it’s important not to over-engineer it.” At a farm business level bringing in an independent advisor rather than creating a formal board structure could give the
Peter McBride.
operation direction or even be quite transformational. “One of the most important things when you’re looking for an independent director or advisor is their personal style in dealing with others – their character. “In a family business with the different personalities and people involved in that, then that personal style – whether they’re a consensus builder, how they work with others in the business – that’s a top priority. “It could all turn ugly quickly if you have the wrong person – it could actually be quite divisive.
Dairy Exporter | www.nzfarmlife.co.nz | August 2020
“In a smaller operation, the character of the independent has to be number one,” Peter says. It might seem an old fashioned kind of word but “wisdom” is also right up there too when it comes to selecting an independent advisor. That’s not just having a broad knowledge but also showing insightfulness and clarity of thought. Often wisdom comes from experience but more importantly from having learned through experience, he says. “You also want to make sure they have business acumen and capability – that they’re respected for what they’ve achieved and have a good standing in business.” Peter’s own governance involvement and CV is impressive. He’s had a seat at several board tables including farming companies and as a director of the New Zealand International Business Forum. Having joined the Zespri board in 2002 he stepped up to be chairman in 2013 taking over the helm to steer the organisation successfully through troubled waters that included working through the devastating Psa disease, a Serious Fraud Office investigation and major troubles in China.
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