Jorge Quintanilla Nielsen, founder of Capital SAFI, shares his insights on corporate governance as a growth strategy. Topics include selecting and holding board members accountable, guiding growth and strategy, and assessing and managing risks.
Capital Safi utilized good corporate governance to attract investors and drive growth.
Capital Safi's board members played a crucial role in strategic decision-making, expansion assessment, and evaluating risks.
Deep dives
The Role of Corporate Governance in Capital Safi's Growth
Capital Safi, a private asset management firm in Bolivia, utilized good corporate governance to attract new investors and drive growth. By recruiting board members with diverse perspectives and establishing robust governance practices, such as board assessment processes and succession plans, Capital Safi strengthened its governance. The board's role in guiding the firm's growth, managing risks, and shaping strategy was highlighted. The firm's commitment to corporate governance extended beyond legal requirements, demonstrating their belief in its inherent value. The board meetings were characterized by rigorous preparation, debate, and the pursuit of consensus. Capital Safi's dedication to corporate governance served to enhance their reputation, attract investors, and hold themselves accountable for performance.
The Evolution of Capital Safi's Governance
Capital Safi's governance journey involved deliberate efforts to emulate best practices from larger public organizations. They established formal committees, increased the number of independent directors, and prioritized professional management and education. These practices aimed to bolster the firm's reputation, attract customers and investors, and raise the caliber of executives and board members. Despite being a small company, Capital Safi devoted significant resources to training and development, emphasizing the value of continuous improvement in governance. Their approach demonstrated that small companies can learn from larger ones, while also highlighting the lessons that larger companies can glean from the governance practices of smaller organizations.
The Role of the Board and Challenges Faced
Capital Safi's board members played a crucial role in the firm's governance and were carefully selected based on their alignment with the company's values and their ability to offer diverse perspectives. The board engaged in lively debates, challenging each other while maintaining professional conduct. They focused on strategic decision-making, assessing expansion opportunities, evaluating risks, and holding leadership accountable for results. The board's commitment to performance evaluation, information sharing, and follow-through showcased their dedication to high standards of governance. The company's smaller size allowed for nimble scheduling of board meetings, increasing frequency to address evolving needs effectively.
Lessons in Board Engagement and Consensus Building
Capital Safi's governance process followed a three-step rule to foster consensus on important decisions. Initially, diverse opinions were voiced, and information was shared for thorough preparation. Board members critically evaluated proposals, ironing out differences in subsequent meetings to reach consensus. The process encouraged diversity of opinion on estimates and perspectives, enabling robust discussions. By respecting different viewpoints and focusing on converging towards a collective vision, the board built trust and alignment on strategic directions. The case study emphasized the importance of mutual accountability, engagement, and the willingness to challenge each other, showcasing the effectiveness of their governance model.
Jorge Quintanilla Nielsen started the private asset management firm Capital SAFI in 2007 — and planned to expand from Bolivia across South America. As a private firm, Capital SAFI isn’t required to have a board, but he knew that governance would be one of the main aspects potential partners would evaluate.
In this episode, Harvard Business School professor V. G. Narayanan discusses his case, “Building the Governance to Take Capital SAFI to the Next Level.” He explains how Nielsen selects board members and holds them accountable in their roles. He also discusses how Capital SAFI’s board guides the firm’s growth, risks, and overall strategy.
HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.