Concerns going forward
Don’t think that Institutions will buy shares at present due to the weak Board of Directors. The BoD consists of CEO, CFO and CSO from Sirona management plus one anonymous MD and one anonymous Chinese lawyer. Improvements are needed in the board composition. Would be good with strong and well-respected industry names with complementary competences that are familiar with the activities.
Moreover, the CFO and the CSO should not be included in the board, they should report to the board. From a European perspective, the CEO should not be member of the board either. There are rules about this in many European countries.
Out of a governance perspective, the board develops and approves the long-term strategy plan for the company and the (annual) business plan that is aligned with the long-term strategy. It is thus the board that steers the company. The CEO is then to execute according to the business plan, approved by the board. The CEO should report back to the board on a regular basis, at least 4 times a year.
Since R&D is vital for the company, it would be wise with a separate reporting channel from the CSO straight to the board. It could at least be considered.
There is a need for a walk-through of the activities.
It is a good thing that Wolfgang Bieber has been appointed. There is a need to make a walk-through of the organisation out of an operational and governance perspective. One should ask what working tasks needs to be carried out and what responsibilities needs to be delegated. From these answers, one can map the need for personnel and how the division of working tasks and division of responsibilities should be established in between different units/functions/officers.
The establishment (or update) of SOP: s or business- and working procedures outlining the routines, would strengthen governance and internal controls and should mirror the division of working tasks and division of responsibilities.
My guess would be that Michelle and Geraldine is carrying out a number of working tasks today that they are not always comfortable with, alternatively that are outside their core competence area.
Geraldine leads the work in the laboratory. She seems to have at least 9 personnel reporting to her, that she needs to take care of. In addition, I guess she is responsible for the TFC site in France with all the responsibilities related to that. Since Sirona have been granted funds from the French government, I guess she is also involved in a number of other activities.
I think it would be good to also consider the risk for non-compliance (financial reporting) and the need for quality assurance of the activities in the lab in France. If Sirona is considering an up-listing with more comprehensive requirements, it is important to ensure that the company is compliant with these requirements. Fines due to non-compliance would affect the financials and the reputation. It is also worth noticing that outsourcing of certain activities does not outsource the responsibility for these activities. The responsibility for the activities will always lie with the company and outsourcing needs thus to be preceded by comprehensive due diligence.