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Publicly Fit: Building an Infrastructure Ready for Growth.

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Presentation on theme: "Publicly Fit: Building an Infrastructure Ready for Growth."— Presentation transcript:

1 Publicly Fit: Building an Infrastructure Ready for Growth

2 1 What do we mean by publicly fit companies?

3 2 A private company that voluntarily chooses to enhance business operations and compliance standards to increase opportunities and to enhance overall enterprise value.

4 Benefits of Becoming Publicly Fit Facilitates financial transactions Secures key partnerships or joint venture opportunities Increases current value Secures top board members Increases recruiting potential for top talent Protects from accusations of wrongdoing and other external scrutiny 3

5 4 What’s different about Weaver’s approach to building a Publicly Fit company?

6 5 At Weaver, we begin with the end in mind and we adapt our approach to fit your company’s needs and timeline.

7 Our Approach We first build a foundational plan – Addressing most pressing needs first – Focusing on processes touched by the most people We use Weaver’s exclusive building-block approach – Moving through all systems and processes systematically – Leveraging a phased approach, which is least disruptive to your company 6

8 Timing & Resources Typical process is 1-3 years Timeline is on your schedule – Proactive vs. in response to an event Possible to shorten the process to just a few months – Costs increase as the timeframe shortens – As timeframe shortens, the strain on your company increases Small companies with limited resources are eligible This process complements — not crushes — an entrepreneurial culture 7

9 Steps to Becoming Publicly Fit The Five Steps to Becoming Publicly Fit: 1.Enhancing financial reporting capabilities 2.Implementing a risk assessment process 3.Developing corporate governance practices 4.Enhancing and strengthening internal controlsand information technology systems 4.Enhancing and strengthening internal controls and information technology systems 5.Creating procedures compliant with Securitiesand Exchange Commission (SEC) reporting rules 5.Creating procedures compliant with Securities and Exchange Commission (SEC) reporting rules 8

10 9 Enhancing Financial Reporting

11 10 THE CLIENT: A rapidly growing company that has been through four recent acquisitions; as a result, it lacked critical standardized, recurring financial practices THE CHALLENGE: “We have a goal to grow our $250M company to $1B in just 18 months, but our lack of standardized financial practices is holding us back.”

12 Enhancing Financial Reporting 11 Common IssuesWeaver’s Response Founder/culture not ready to embrace the cost of hiring Counsel founder to understand the experience and expertise needed to augment the team Personnel not experienced with public company requirements Divide management team responsibilities into segregated work-flow functions that are systematic and SOX-compliant Technology not robust; processes too manual or out dated Design a robust infrastructure to serve as a major building block for the company’s future, including flexible systems supported by new scalable policies and procedures

13 Enhancing Financial Reporting Outcomes: Accurate and timely financial reporting Instilled public company culture In-house expertise for public company reporting Robust and flexible systems – Analyze data in different ways – Gain additional business intelligence Necessary foundation for growth 12

14 13 Implementing Risk Assessment Processes

15 14 THE CLIENT: A complex and growing financial services company operating in a highly regulated industry THE CHALLENGE: “Our external auditor recommended that we put a formal risk assessment process in place and implement an internal audit function. The auditor is conflicted out; we need help.”

16 Implementing Risk Assessment Processes 15 Common IssueWeaver’s Response No reliable way to fully understand risks, making it difficult to make truly informed decisions Develop entity- and process- level risk assessment processes that reveal risks so management can effectively understand and mitigate risks Spending little or no time formally assessing risk mitigation practices Implement an internal audit function that passes external scrutiny and inspires confidence with shareholders, investors and regulators

17 Implementing Risk Assessment Processes Outcomes: Processes that accurately and proactively measure risks Accurate understanding of the company’s risk tolerance An ability to make informed decisions that help mitigate risks An ability to monitor risk and verify compliance through internal audit and communicate effectiveness to external audiences 16

18 17 Developing Corporate Governance Practices

19 18 THE CLIENT: An industrial manufacturing and design group backed primarily by the owner’s investment THE CHALLENGE: “We’re looking for a capitalization strategy to improve the company’s value. We’re seeking outside investors so the owner can sell a portion of the company to recoup his personal investments.”

20 Developing Corporate Governance Practices 19 Common IssuesWeaver’s Response Hub-and-wheel structure, all reporting to CEO Restructure to a more accountable independent governance structure A lack of formalization of entity- level control processes that set the tone at the top for executive management performance across the organization Formalize entity-level control processes through COO and CFO roles; create code of ethics, delegation of authority No independent point of view to provide checks and balances Implement a Board of Directors; develop screening process for hiring Board members

21 Developing Corporate Governance Practices Outcomes: A formalized corporate governance structure Installed delegated executive management team Tone at the top – Clear expectations for performance and behaviors across the organization Formalized entity-level processes and procedures An independent Board of Directors 20

22 21 Enhancing Internal Infrastructure

23 22 THE CLIENT: A growing company with a legacy accounting system and manual internal control processes; they relied primarily on trusted individuals combined with workarounds and patchwork solutions THE CHALLENGE: “We’d like to continue our rapid market expansion but our internal control system simply won’t support our progress.”

24 Enhancing Internal Infrastructure 23 Common IssuesWeaver’s Response Informal or lacking business processes across the organization, allowing inaccuracies and inefficiencies to flourish Create scalable technology- reliant procedures, personnel and business processes Limited IT sophistication, technical support, lacking security and inconsistent backup efforts, leaving financial and other data vulnerable Select a new core ERP system to support entity-specific policies and procedures and implement workflow within the critical technology application to implement preventative controls, improve data security and reporting

25 24

26 Enhancing Internal Infrastructure Outcomes: Scalable and reliable technology-based personnel and business processes Defined personnel roles with enforced segregation Strong and effective entity- and processes-level internal controls A solid foundation for SOX-compliant corporate governance 25

27 26 Accommodating Compliance Requirements

28 27 THE CLIENT: A private equity firm that recently invested a large amount in a rapidly growing retail company THE CHALLENGE: “We’d like to go public to recoup our recent retail investment. We have strong financial reporting and leadership, but public company standards require even more rigorous reporting. We need help getting there.”

29 Accommodating Compliance Requirements 28 Common IssuesWeaver’s Response Finalize important deals with a handshake and keep news close—among management team only Put a structure in place to timely and formally disclose material transactions to external audiences Rely on the auditor to accumulate data and prepare disclosures Evaluate financial reporting and accounting structures; recommend a structure that independently prepares required financial reporting that is in compliance with regulatory and independence rules

30 Accommodating Compliance Requirements Outcomes: Robust financial reporting capabilities compliant with SEC reporting rules and regulations A formal process to disclose material transactions Management trained in preparing data for financial reporting Processes that meet regulatory and independence requirements 29

31 30 About Weaver

32 31 Largest independent accounting firm in the Southwest Seven offices across all major Texas markets Approximately 500 professionals and 60+ partners Consistently ranked as a top firm nationally and regionally Named on the 2012 BEST of the BEST Firms list by INSIDE Public Accounting Ranked #8 Largest North Texas Accounting Firm by the Dallas Business Journal Named on the 2013 All-Star Firm and Fastest Growing Firm lists by INSIDE Public Accounting Ranked in the top 50 firms nationally by INSIDE Public Accounting and Accounting Today

33 About Weaver 32 Continuing focus on delivering leading edge solutions and best-in-breed services Weaver professionals have broad experience in multiple industries – we can help you incorporate best practices and lessons learned from other successful Texas companies Committed to long term strategies and solutions We help organizations evolve from being risk- responsive to having a controls environment that serves as an operational and business enabler Complete range of services to support the entire lifecycle of growing companies

34 Questions Contacts: Alyssa G. Martin, CPA, MBA Advisory Partner Dale J. Jensen, CPA, CFE Assurance Partner


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