Maypole Logo
Maypole Logo
Nothing says homemade like Maypole

Corporate governance: the key to success

Published: June 20, 2021

While there is no universally accepted definition for the term governance, one could say that it is the framework within which authority and accountability are exercised to manage and control the outputs, outcomes and benefits in a business concern. Through proper governance mechanisms, organisations can exert financial and technical control over the deployment of the work and the realisation of value. The larger and more complex an organisation becomes, the more crucial good governance becomes to its success.

 

We at Maypole have long been aware of this importance. In a relatively short period of time, and practically from one generation to the next, Maypole has grown from a single-outlet, family concern to a leading player in the food business. Nowadays, our business is built around our very own state-of-the-art production facility, appropriately named THE BAKERY, at Tal-ħandaq in Qormi. This is the hub for our operations with no less than 27 retail outlets in strategic points geographically distributed all over the Maltese Islands, the ‘Nenu the Artisan Baker’ franchise, including restaurants in mainstream Valletta and in Mġarr,  and a thriving outside catering activity.

 

This leap could not have been successfully effected without the introduction of corporate governance structures to render the transition, from family-run to corporate, smoothly and efficiently. The structures had to ensure that management of all operations had to be professional, yet retaining the family values from which this venture had sprung. Our governance principles are built on five pillars, namely – diligence, confidentiality, accountability, administration and avoidance of conflicts of interest.

 

In parallel with our steep growth and broadening curve, we established delegated limits of authority, and established internal communication and escalation channels for decision making. All team members, and the wider stakeholders, have clearly-defined roles and responsibilities in a structure that gives confidence to the board of directors that investments and operations are being diligently managed.  We have a number of reporting and control activities to ensure that the board is kept informed of progress, and can follow a clear chain of accountability for different actions and duties. Confidentiality is key for an efficient structure, especially when working on research and development of new products from the earliest stages. Our structure operates an a strict need-to-know basis, with the circle growing wider with time and progress, until initiatives are launched. Competence in our corporate structures was introduced to create a optimum balance between those acquired over the years within the family, and those that needed to be hired through the recruitment of suitable professionals in various fields such as marketing, financial control, quality and hygiene standards.  Through our governance structures, and internal control structures, we are in a position to ensure strict observance of all legislation regulating our operations. These include the Hazard Analysis and Critical Control Point (HACCP) so critical to food hygiene and safety procedures in any food business, professional accounting and audit services, and a high level of respect for the well-being and welfare of our many employees that, in our efforts to achieve and maintain best practices, goes over and above regulatory obligations.

 

There is no room for conflict of interest in the successful running of a multi-faceted large organisation like Maypole has become. In establishing our governance structures and procedures, we made sure that all players at all levels are fully cognisant of their roles and responsibilities, and the boundaries that limit their fields. Thus while different sections within the whole structure might have different priorities, each unit has its interests that are clearly-defined, and when corporate decisions are taken, the discussion at the table works towards finding the ideal balance between the parts, for the ultimate benefit of the whole.

While the original family values are still at the heart of our business, with the active participation of Nenu Debono bringing a wealth of experience and knowhow to the table,   families can be emotional systems, and emotions tend to compete with logic.  Effective administration structures help to harness these emotions and channel this energy into business operations in a logical framework and direction, and always in tune with individual roles and responsibilities, and in line with strategic directions in the purpose of the business. During the COVID-19 crisis, we saw our governance structures bringing all these viewpoints together helping us be more resilient.  Through sound and decisive action, reorganisation and redeployment of assets, we ensured the ongoing success of the business as a whole, with the second generation of the family actively running operations, preparing it for future generations and guaranteeing the livelihood of all our employees.

 

The transition from a small family business to a large corporate business is never easy and presents challenges. Effective family governance played a key role in dealing with, and overcoming, these challenges. It helped ensure the survival, and the prosperity, of the business between generations, since we always understood that the introduction or formalisation of governance takes time, effort and commitment on the part of all those involved.

 

Professor John A. Davis, the founder of Harvard’s family business management studies during his 21 years on the faculty of Harvard Business School (HBS), has published and lectured on the subject of governance, especially in the context of family-owned businesses, far and wide for years. He summarised the concept rather brilliantly by saying ‘It is bringing the right people together at the right time to discuss the right things’. At Maypole we are proud to believe that we have done that, and will continue to do so.

 

Corporate governance: the key to success by Reuben Debono, Director, Maypole Group

Let's keep in touch

Subscribe to our newsletter, and we will send you occasional newsletters, healthy recipies and special offers.

0