ACCESS Family Business - October 2019

WESTERN SYDNEY

Family Business

With David Pring

Welcome o KPMG Family Business ea ure ar icles.

I you would like o discuss hese ar icles or how KPMG can help wi h your business please eel ree o con ac me on 9455 9996 or davidpring@kpmg.com.au

Welcome Shareholder value: Wha mo iva es AUS RLIAN E AIL INVES O S n ALSION KITCHEN n AMANDA HICKS CCO DING o a repor by PMG’s research eam, PMG Acui y, he majori y o Aus ralian re ail inves ors would accep lower fnancial re urns i i mean companies hey inves ed in always behaved e hically owards cus omers, employees, and communi y.

Te PMG repor en i led Shareholder Value: Shareholder Values is based around a na ionwide survey o 1,510 Aus ralian re ail shareholders. Te research looks in o wha mo iva es re ail inves ors and has ound ha re ail inves ors have a heigh ened level o awareness and ocus on he impor ance o repu a ion, ransparency, e hical behaviour, values, and social responsibili y.

A

Key findings •

•

•

•

•

ransparency and hones y (51 percen ra e his as a op fve ac or or inves ing, ou o a possible 22 ac ors) is more sough a er han any o her ac or aside rom re urns (60 percen ).

Lower fnancial re urns would be accep ed by mos inves ors (57 percen ) i a company always ac ed e hically owards cus omers, employees and he communi y. A higher number (72 percen ) ra ed ‘repu a ion’ ahead o ‘recen dividends’ (69 percen ) when deciding which companies o inves in.

Execu ive pay is a major rigger or selling. While paying leadership and execu ives airly does no drive shareholders o purchase shares (only 10 percen rank his in heir op fve), excessive leadership pay will drive hem o sell (38 percen rank his in heir op fve).

Philan hropic suppor or chariies and causes is no subs i u e or in egra ed values. e ail inves ors are no especially impressed by oneo ini ia ives o ‘do he righ hing’.

Philan hropic e or s can and should con inue, bu hey will deliver grea er impac i igh ly aligned wi h an organisa ion’s broader posi ive purpose.

Age is relevan . Young inves ors are more likely o care abou ‘ rus ’ ac ors (such as environmen , e hics,

values, good rea men o employees) in heir inves men decisions; while middle-aged inves ors are likely o care he leas . For example, 66 percen o inves ors aged under 30 ci ed ‘e hical behaviour’ as an impor an ac or, while jus 49 percen o hose aged 41-50 agreed – and, in eres ingly, 55 percen o over 60s agreed. Young inves ors are signifcan ly more likely o consider environmen al concerns han o her age groups.

• Women are more likely o prioriise rus ac ors. On many (bu no all) ac ors, women shareholders are more likely o care abou e hical behaviour (70 percen v 62 percen male), environmen al sus ainabili y (52 percen v 37 percen male), and whe her companies in which hey inves are paying heir air share o ax (70 percen v 59 percen male).

• Inves ors do read annual repor s (89 percen ). And hey’re no jus looking a fnancial per ormance.

Fu ure s ra egy (95 percen ), Board and Execu ive remunera ion (89 percen ) and CEO/Chair Messages (88 percen ) are he nex priori y reading areas or re ail inves ors.

If you’re interested in reading the full report, please visit kpmg.com.au Article first published by Alison Kitchen, National Chairman KPMG Australia, and Amanda Hicks, Partner in Charge, Customer, Brand & Marketing Advisory, KPMG Australia on KPMG Newsroom.

Business of Family Master Classes How can you grow your family business, while balancing the needs of the business and the family?

Find out more at KPMG.com/au/businessoffamily

Share your vision, develop your plan!

© 2019 KPMG, an Australian partnership. All rights reserved. 400324266ENT.

WESTERN SYDNEY BUSINESS ACCESS OCTOBER 2019

37

Family Business

www.wsba.com.au

Wha is one o he op hrea s o u ure grow h o a business?

I don’t think anyone can honestly say they’ve got the full picture of what’s ahead.

But if you’ve got the right skillset, capability and drive to always be anticipating what your customers want, and if you’re prepared to try new things – and potentially to fail if they don’t work – then I think that puts you in a pretty good position.”

“ - David Christie.

N amily business, echnology and da adriven insigh s are he secre o s aying ahead o he curve – and he compe i ion – over he nex 20 years.

In he la e 1990s, ew people could have guessed wha he business landscape would look like in 2019.

Smar phones, au oma ion and ar ifcial in elligence, cashless paymen s and coworking spaces are jus he ip o he iceberg – he world o work and he world in general have changed a lo in wo decades, massively impac ing business mindse s and cus omer purchasing behaviours along he way.

Bu while no one can say or cer ain wha disrup ive developmen s are in s ore or he nex 20 years, maximising he benef s o echnology can help amily businesses mee and overcome u ure challenges, while sharpening heir compe i ive edge here and now.

I

Get closer to your customers According o responden s o he 2018 PMG En erprise and Family Business Ausralia survey, changing consumer pre erences and purchasing behaviours were seen as one o he op hrea s o u ure grow h.

One major benef o echnology is ha , hrough business in elligence ools and da adriven insigh s, en erprises are now beter equipped o iden i y shi ing rends in cus omer paterns, behaviours, li es yle choices and so on, resul ing in beter-in ormed decisionmaking around produc ion, orecas ing and planning.

I may even inspire wha David Chris ie, Join CEO o Bakers Deligh Holdings, calls a “produc renova ion” – such as when he iconic bakery chain added ex ra fbre o heir whi e loa in response o a more heal h-conscious movemen among consumers. Wi hin a

ew shor years, he high-fbre whi e was heir new bes -seller.

“I don’ hink anyone can hones ly say hey’ve go he ull pic ure o wha ’s ahead,” Chris ie says, “bu i you’ve go he righ skillse , capabili y and drive o always be an icipa ing wha your cus omers wan , and i you’re prepared o ry new hings – and po en ially o ail i hey don’ work – hen I hink ha pu s you in a prety good posi ion.”

Start now Tere are a couple o reasons ha Brad Miller, Par ner and Na ional Leader, Managemen Consul ing PMG En erprise, says here’s no ime like he presen when i comes o he adop ion o new echnologies.

Te frs is ha echnological solu ions or core sys ems such as fnance, H , and even cus omer managemen are becoming more a ordable, giving amily businesses beter da a, beter insigh s, and, as a resul , beter compe iive advan age.

“I you are aking advan age o his, and we see a lo o he smaller companies doing i , you ge beter a making decisions, because you run your business in more o a real- ime ashion,” Miller says.

“You can respond o issues and oppor uni ies as er, and you ge a beter handle on hings such as basic prof abili y, wha your cus omers are doing, wha your compe iion is doing, and wha your employees are doing – i.e. how produc ive are you really as a business?”

Te o her argumen or embracing new echnologies sooner ra her han la er, is ha i will make i easier o adap o disrup ions down he rack.

“In simplis ic erms, you need o inves now,” Miller says, “because i i ’s no he absolu e righ piece o echnology or a par icular issue or i evolves, he experience will pu you in good s ead.”

If you would like further information on how KPMG Family Business Services can assist you, please reach out to David Pring on 9455 9996 or davidpring@kpmg.com.au.

First published by Smart Company.

38

WESTERN SYDNEY BUSINESS ACCESS OCTOBER 2019

Business of Family Master Classes It’s time to hone your family business skills to prepare you for an exciting future of growth!

Join our new series of tailored master classes, all led by an expert KPMG Enterprise family business adviser.

To find out more and register your interest visit KPMG.com/au/businessoffamily

© 2019 KPMG, an Australian partnership.

All rights reserved. 400324266ENT.

WESTERN SYDNEY BUSINESS ACCESS OCTOBER 2019

39