David Jacobson's External Insights

How do you respond to a whistleblower?

If you are informed by an employee of your company or a contractor that your company has breached a law, how do you respond? If you inappropriately terminate the employee and do not report the alleged breach, you could be penalised and the employee compensated.

More (pdf)

Can an Advisory Council help your business?

Whatever your stage of growth, having access to experienced people can help your business. An advisory council (I prefer this term to “advisory board” for legal reasons) is a group of people with experience, perspective and skills who can give valuable advice on your organisation’s strategic direction and products.

More (pdf)

UPDATE: It could also be called a "reference group" or "panel".

Insurance Claims

The OECD has issued Guidelines for Good Practice for Insurance Claim Management .

It calls on insurance companies to handle claims speedily and fairly. It also recommends that companies monitor customer claims more closely as a way of combating fraud. Both measures, they suggest, should help insurance firms to operate more efficiently and so hold down the level of premiums and improve customer satisfaction.

To improve the way claims are handled, the OECD urges insurance firms to:
• Give customers the information and assistance needed to enable them to file claims quickly and with all the details required;
• Update customers on the status of claims and alert them if a claim may take some time to resolve;
• Work together to combat fraud, for example through industry-wide databases to report and share fraudulent claims. Staff should also be trained to spot potentially fraudulent claims more easily;
• Deal with claims quickly, fairly and transparently, tracking their performance through statistical databases and making this information public;
• Inform customers of complaints procedures and address complaints promptly, keeping policyholders informed of what they are doing in response to complaints.

Ageing Australia

The Productivity Commission has released Economic Implications of an Ageing Australia Draft Research Report.

According to the Report, Australia faces a pronounced ageing of its population over the next forty years. One quarter of Australians will be aged 65 years or more by 2044 45, roughly double the present proportion.

As more people shift into older age groups, overall workforce participation rates are projected to drop from around 63.5 per cent in 2003-04 to 55.4 per cent by 2044-45.

As the population ages, education and some social welfare payments are projected to fall relative to GDP, whereas aged pensions and health and aged care costs are projected to rise relatively.

The Treasurer commented here.

Allow for the unexpected

In every business plan or project you have to allow for the "x factor", something that you cannot foresee happening, whether it is a September 11 event or a personal or financial matter outside your control.

This animation clearly illustrates the need to allow for the unexpected. Turn on your sound!

More tips for Business Success

From IBISWorld comes these 10 top tips for business success:

• focus on a single industry
• industry positioning
  
• pursue  intellectual property
• outsource of non-core activities
• eschew ownership of hard assets
• create a virtual corporation structure
• have an external focus
• globalisation, or at least emulation of world best practice
• development of a unique organisational culture
• leadership

New Businesses: success or failure?

Two recent articles attempt to summarize what makes a new business successful and what a new business must not do.

5 Fatal Mistakes to Avoid to Prevent Small Business Failure nominates:

1. No business plan
2. No marketing plan
3. Ignoring your financial position
4. Poor relationship with your customers
5. Inadequate employee relations

What not to do nominates 17 mistakes and 5 things a startup must do:

1.Know your goals
2. Hire the best people
3. Develop a "forgiving" strategy
4. Be honest with yourself
5. Commit to the business.

Is your business healthy?

It has been said that managers only measure the things they care about.

So what does that say about the results of a new survey conducted on behalf of Deloitte Touche Tohmatsu by the Economist Intelligence Unit (EIU), which showed that only about one third (34 percent) of board members and top executives polled say their companies are proficient at monitoring critical non-financial indicators of corporate performance?

The majority of board directors and senior executives surveyed for the study — called "In the Dark: What Boards and Executives Don’t Know about the Health of Their Businesses" — said that factors such as customer satisfaction, innovation, supplier relations and employee commitment are critical to corporate success. But they admitted that there were difficulties in monitoring these drivers of organisational performance.

By contrast, the study indicates that 86 percent of executives believe their companies are excellent or good at measuring and tracking the performance indicators necessary for financial reporting purposes.

How good is the information your Board gets about such things as :

• The company’s impact on society and the environment
  
• Employee commitment
  
• Relations with suppliers and other external stakeholders
  
• Product/service innovation
• Customer satisfaction
• Brand strength
  
• Product/service quality ?

Hollinger and Corporate Governance

I went to an AICD lunch today to hear Richard LeBlanc speak.

He argued forcefully that an independent director does not make a board effective if he or she is not competent.

He argued that competency needs to be addressed by firstly looking at the collective competencies required by the board and then looking at which directors satisfy the required competencies. He also said that the way a director, and in particular the chairman,  behaves and interacts with other directors is critical.

A more detailed analysis of his views on board composition and director assessments can be found in his article "Preventing future Hollingers".

He says that " at the centre of the Hollinger fiasco are the discretion and influence of controlling shareholder Conrad Black, and the stacking of the board with so-called "trophy" directors, many of whom were independent, formally at least, but were accused of being considerably less than competent in the Breeden report ".

About this site

In this site I seek to share my expertise in business, the law and technology. But comments by me on this site are not legal advice to you.

This site collects ideas, research, news and commentary by me and other people in Australia and overseas relating to businesses and the culture, people, technology and processes that drive them to be innovative and successful.

In the Australian Regulatory Review and Compliance Toolkit I  collect things that you need to know to survive Australia's growing regulatory complexity particularly in the financial services industry.

In Other Interests I  share my journey from a "traditional" lawyer to an adviser with a different approach to working with my clients. (I also share things that are just simply interesting!)

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Thanks for reading.