A family-run business with a strong brand position in the power generation sector in Saudi Arabia.
Situation: The founder was considering retirement and approached Cornerstone to perform a full diagnostic assessment on the company to assess whether it had the appropriate governance model and practices to allow non-family executives run the company.
Complication: None of the founder’s family members were readily available to take over, which will require appointing an independent management team to run the company. This would require instituting fiduciary governance to ensure effective monitoring mechanisms and alignment of incentives.
Approach: A full operational review involved interviewing company’s executives and middle management to develop understanding on processes and decision making. This operational assessment also included site visits to all retail outlets, service centers, and offices. In addition, a five-year historical financial performance assessment was conducted to evaluate each business line the company operated and the drivers of value for those lines.
Results: Cornerstone’s diagnostics exercise of the company’s historical performance revealed systemic and strategic areas of improvement as data showed that the company was losing market share and experiencing sub-optimum returns.
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