The key issues of strategic direction and implementation

John has been employed at Hamilcar Barca Builders as theirflnance offlcerfor2 months. He still has 1 month left to go before passing his
probation. It has been a whirlwind ride forJohn as it was his flrst professional appointment following graduation from university. He has

noticed some serious discrepancies with the books. Given that the company is a family-owned business, it has not always been easy forJohn
to have a clear picture about inflows and outflows of monies. There have been payments made to a range oflocal councils, which seem to be
quite exorbitant, and other payments to a Hamilcar Barca consultant for management of unspecified projects. In addition, there have been
increases in waste disposal costs to anotherfamily-afflliated company. On the other side ofthe ledger, mysterious bags of cash have

appeared at times and John has been instructed to ask no questions and just bank the money into another account, which has all the hallmarks
of being a ‘slush fund’ of some sort.

Hamilcar Barca Builders appears to be highly leveraged (i.e., geared) and, as future work projects

appearto be drying up, John is worried about the capacity ofthe company to meet all its debt obligations. The company has operated mainly
in the housing industry, but diversified into school halls when government money was flying around afterthe global flnancial crisis (GFC).

John is aware that other housing-focused building companies have had to declare bankruptcy recently and times are tough since the Government
has now withdrawn its post-GFC subsidies to the industry. The CEO and major shareholder of Hamilcar Barca Builders is Jimmy, who has risen
to take overthe company started by his father Hamilcar. Jimmy has little

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knowledge offlnance and management, but is an all-around

nice guy who just likes to get his hands dirty. His brother Charlie is the operations managerwho effectively runs the business on a

day-to-day basis, but is quite secretive by nature. Charlie’s wife is the Marketing Manager. Otherfamily members have some equity in the
business.

John has a family management meeting on Friday where he intends to flag some ofthe issues that have come to his attention.

However, as the flrst non-family appointment to a senior position, he is worried about upsetting loyalties by raising sensitive issues, and
naturally there is his probation period to think about. Nevertheless, it appears to John that there are issues of corporate governance,

ethics, and organisational control to be raised as well as the long-term strategic future forthe organisation. From where he sits Hamilcar

Barca Builders does not have a bright future, unless it addresses the key issues of strategic direction and implementation.

Question:

Present an in-depth argument outlining the best way forJohn to proceed and sort out all the issues mentioned above