If you are interested in the strategic planning process for exits, you can watch the full briefing here - The Exit – Preparing your business for sale
If you are interested in strategy development for investment then take a look at the full briefing Cashed Up - How to attract business funding.
Good governance means having great people at the top looking out for the company. But how much should a company pay for a good director? In this TV show Caroline Newsholme discusses pay vs performance.
You should certainly pay for talent. And good directors come at a price. But there’s a feeling that directors remuneration is slightly out of kilter with the real world. It’s certainly being increasing, notwithstanding the fact that we are in a recession, there’s been a quite substantial upwards trend
And obviously a lot of companies have struggled and may not have performed as well. So there there’s an inconsistency between actually the wellbeing of the company and what the directors are being paid.
But I think certainly directors are alive to the concerns that have been voiced by investors and the business world generally. I don’t think they are blasé about the position, they recognise that there has to be a proper link between pay and performance and we can’t continue to see excess packages which are not really justified. Whether we’ll get change at the rate we need change is another question.
But there’s a lot of impetus in the corporate world to increase transparency and to change what’s gone before.
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Informed financial planning advisors pass on their wisdom to clients. If a company fails they will naturally look at back at this advice. In this TV show Doug Hall discuses throwing the spotlight on professional advice.
For example auditors, we are dealing with a number of cases, where a company has failed, and if the company had not failed there wouldn’t be an issue. But in the company going into administration for example, major creditors had lost and they may say that they have relied for example on audited accounts to make decisions, to lend money or to support the company and in the cold light of day the company having failed, that’s an example where you may go back and look at what the auditor said in earlier years. So we have situations arising from insolvent companies where the spotlight is thrown onto a whole range of professional advice that they were given before the company failed. Which never would have come under that spotlight if the company hadn’t gone into administration for example. It's not an area that we get involved in but valuers have seen a big increase in the number of actions against them very simple because the banks relied on valuations of properties for example, and then when the company has gone into administration and the bank has lost out, they then go back and look again at the professional opinions that they relied upon, in making their original lending decisions.
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