Exclusive Fognini Inc. Case Study

Changes needed before going public

Actions to start the change process

Board composition

• The chair of the board should be an independent director
• The board is made up of shareholders which needs to change. It should be made up of independent directors with specific areas of expertise with no stake in the company.

• An independent director needs to be appointed to chair as Guilio cannot be chair of the board and hold majority of the company shares.
• Hire external experts in their fields (accounts, finance, business, etc.) to replace the current members of the board.

Board committees

• A finance committee should be created.
• An audit committee and a governance committee should be created.

• This committee should be comprised of several board members fluent in finance for the purpose of monitoring the budgeting and financial reporting process.
• The audit committee should be creates and approve the appointment of auditors. The governance committee should be comprised of suitable board members to develop the organizations approach to corporate governance.  

Accounting and reporting

• The company must provide accurate records publically and keep them maintained
• Begin making fillings to the Securities Commission

• Record any changes in the business immediately
• File insider reports, bid materials, quarterly management analysis, audited annual financial statements and interim statements to the Securities Commission

Board practices

• Board Meetings should be formal events and not mixed with family events. They should also be scheduled more regularly.
• A code of conduct & ethics should be created and enforced.
• Define individual roles and responsibilities

• The external board of directors should meet on a regular basis. This should not include the shareholders.
• A Code of Conduct needs to be written and it is the board’s responsibility to monitor compliance with the code.
• A chair of the board, chairs of individual committees and a CEO should be clearly named.