Board of Directors - Core Concepts
A Guide To Understanding Concepts Of Corporate Governance
Managing Margin, Risk, Financial Transparency in the Ethanol Industry
When it comes to margin and risk management, ethanol producers have difficult and unique choices.
In most commodity processing industries, the output price is highly correlated to input price. For instance, in the energy sector there is a strong price relationship in the crack—the spread between crude oil and gasoline or diesel; in the metals sector there is a strong price relationship in the conversion—the spread between iron ore and steel; in the food sector there is a strong price relationship in the crush—the spread between soybeans and soymeal or oil.
Why Your Company Needs a Good Banking Relationship
How many times have you heard somebody say, “Banks only lend to companies who don’t need the money.”? I have heard that comment frequently over the past 10 years. Now, with the benefit of hindsight, I realize it was those companies who valued their banking relationships and were always prepared to talk to the bank who received the funding. The first step in building a solid bank relationship is to value what a bank can mean for you. Many executives still view a bank as a vendor, selling money, rather than a partner, providing ideas and solutions to improve their business. If you have chosen your banker wisely they will have the experience, tools and contacts that can be invaluable to a business that doesn’t have an unlimited budget for consulting expertise.
If you still don’t think your banking relationship is critical here are some more reasons executives should maintain a good working relationship with their bank.
Who Should Attend Your Next Budget Meeting?
A budget is one of the most important documents your company will produce this year: no other document has as much potential to keep the organization on track and translate your vision into reality. The most important contribution your executive team will make to the company is planning for its future. The budget is a critical step in that planning process. Too often employees preparing the budget are isolated. What we need is all key areas working in concert with one another.
What is the Consultant’s Role When the Project is Complete?
The fear of ongoing fees that don’t yield high returns prevents many companies from capitalizing on the investment they make in their advisors. Think about how much your consultants have learned about your company, industry, stakeholders and business processes. They give the owner and business leaders an unbiased and independent business perspective that can’t be found within any stakeholder group. The challenge company leaders face is how to leverage the asset (consultant) they have developed with high return future work that far exceeds the cost.
