Now, Focus needs additional capital to fund its expansion plans. The senior management team has prepared a very impressive prospectus highlighting all of Focus’s recent achievements and a business forecast for the next ten years. Mrs Rose-Gardener has met with several potential investors and private equity groups over the last six months However, these investors are concerned that Focus doesn’t have the proper operation and governance structure to justify the additional funding and expansion plans.
Investor concerns:
Investors note that even though Focus is a large company, the business is still run like a family-owned business with limited management oversight and a lack of operational controls and reporting. In addition, the various management positions, especially the executive positions, are held by family members and close friends. This points to be a lack of appropriate performance reviews and necessary succession planning. The investors also highlighted that Focus lacks board committees.
The board unanimously agrees that since they own most of the company, there is no need to spend any money on non-value adding reporting like a sustainability report. The board acknowledges that the company might benefit from some regular reporting and performance reviews. Still, it is concerned about the impact of reporting on the family members — after all, trust and patience are the most important traits of a family-run business. Plus, it is the board’s view that there is a reason why such reporting is optional and not mandatory. Mrs Rose-Gardner has already notified would-be investors that Mrs White will soon retire from the board. and that Mrs Rose-Gardner intends to self-nominate as the next Chair.
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