Advisory boards and boards of directors play significant role in managing and creating value for emerging high-performing, high-growth firms in New Zealand. That’s according to report released today by Deloitte and Grow Wellington’s business incubator, Creative HQ.
The principal author of “Managing High Growth Adventures: Putting Good Advice to Work in New Zealand Firms” is professor Mark Ahn, who chairs science and technology entrepreneurship at Victoria University of Wellington. His report draws on interviews and case studies from database of 304 Deloitte/Unlimited Fast 50 companies to identify success factors and specific growth strategies.
The research focused on where the Fast 50 firms sought advice, and how they leveraged it to manage breakthrough growth and sustainable success.
While much of the attention of boards and directors was on compliance and regulation, the true value was derived from complementing this with contacts and content, Ahn says.
“Supplier, customer, and investor networks, together with the experienced and tacit strategic knowledge on advisory boards are all crucial in creating sustainable high-performing, high-growth companies. Compliance provides the basis for accessing contacts, which in turn provides the basis for exploring context or strategy development. This is all tightly bound together by high level of collaboration between management and boards.”
Highlights of the research included:
• 73 percent of companies had either advisory boards and/or boards of directors, although only small number were required to have boards in place;
• 98 percent of firms cited strategic planning as “important” or “very important” roles for board members, and strategy development was ranked twice as important as any other board level activity;
• 53 percent of participants indicated that their boards provide “very high” or “high” influence on creating firm value through compliance, industry contacts, and strategic advice.
Although all participants were from high-growth companies, they were not necessarily in high technology sectors. Fast 50 firms come from wide range of industries including IT (35 percent), manufacturing (21 percent), services (19 percent), retail (five percent), telecommunications (two percent) and finance/banking (two percent).
A productive collaboration between management and the board features an information-rich environment where alternative strategies, market validation, and two-way dialogue can occur. The alternative was static, periodic, and ceremonial meetings.
Andrew Gibbs, partner in the accounting and advisory practice at Deloitte says the insights of the Fast 50 were valuable.
“These are the insights from an outstanding group of stellar performers over diverse range of industries – these are the businesses that are leading by example and demonstrating the very best of Kiwi ingenuity.”
Building critical mass of high-growth businesses is essential for individual wealth creation and economic development in New Zealand, says Stephen O’Connor, general manager of the Creative HQ business incubator. “These findings strengthen our resolve to connect outstanding advisers and board members with new businesses in the Wellington region to help them manage and accelerate growth.”
The full report can be found at www.deloitte.co.nz.
