Push to improve rural governance

Simon Arcus

New Zealand may have some of the most innovative approaches to agribusiness in the world but the sector has a "glaring gap" when it comes to innovation in governance, the New Zealand Institute of Directors says.

Chief executive Simon Arcus said while governance could be "a bit of a mystifying word at times", it was about good planning, strategies, processes and systems.

"The best governance is not about putting the brakes on. It's about getting ahead. It's about knowing where you want to be and how you're going to get there."

Good governance was about providing the organisation or the rural business with the big picture by which good management decisions could be made.

"This can often be achieved by bringing in expert directors who understand the business, the environment and the nature of governance."

Farming businesses often relied on traditional lines of relationships, but many were big businesses and needed people who could challenge thinking strategically for the future, Mr Arcus said.

"While the principles are the same, whether it is governance in agribusiness or business, there are some nuances that make agribusiness different, such as succession planning.

"We want to see well-schooled, informed directors getting involved in this sector. We don't want to see directors who don't know what they're doing."

The institute launched its inaugural Rural Governance Essentials course in Invercargill recently and will roll it out to Bay of Plenty and Waikato farmers in November.

"It exceeded our expectations. It started as a trial, but demand was such a second course was added, and now it will be rolled out nationally before the end of the year," Mr Arcus said.

The course focuses on practical tools that can be immediately applied to the running of a farming business, with attendees focusing on strategy and managing risks, as well as having the opportunity to network with others in the rural and agri-business sectors.

ASB head of agri-capital Kevin Cooney said what had worked for farmers in recent years was no longer the basis for increasing value in the future.

"With offshore competition increasing demands to innovate and deliver products customers want, our traditional approach of simply coming from New Zealand for mainstream farming outputs is no longer enough.

"Governance is critical ... without governance, businesses will operate as they always have, but the reality is that they're already going backwards.

"I don't believe farming is any different in that regard."

* The Rural Governance Essentials course will be held in Hamilton on November 24 for Bay of Plenty and Waikato farmers. For more information, visit www.iod.org.nz