Ann: Investor Presentation, page-57

The responsibility for the current share price rests squarely with the LaserBond board of directors, and I believe significant changes are necessary to benefit both the company and its shareholders.

To illustrate the profound lack of experience and expertise within the current board, I invite you to read the following responses provided by ChatGPT to a couple of straightforward questions. These answers will highlight the critical gaps that need addressing for the company's future growth and success.

what is the ideal mix of experience for a board that controls the growth and direction of a small-cap innovative engineering company?

ChatGPT said:

ChatGPT

The ideal mix of experience for a board overseeing the growth and strategic direction of a small-cap innovative engineering company should strike a balance between technical expertise, industry insight, financial acumen, and strategic leadership. Here's a breakdown of the key elements:

1. Technical and Industry Expertise

• Engineering and Product Development: A board should have members with deep technical knowledge of the company's core engineering processes, such as laser cladding, additive manufacturing, or materials science. This ensures that the board can provide valuable input on R&D initiatives, product innovation, and operational efficiency.
• Industry-Specific Knowledge: Having directors with extensive experience in the engineering sector, particularly in areas like advanced manufacturing, industrial applications, and emerging technologies, is crucial. They should understand market trends, regulatory challenges, and the competitive landscape, ensuring that decisions align with industry demands and innovation cycles.

2. Financial and Risk Management

• Financial Expertise: A strong background in corporate finance and scaling small-cap companies is essential. Directors with expertise in managing capital structures, navigating financial markets, and securing funding for growth initiatives (through IPOs, debt financing, or private equity) can ensure the company has the financial flexibility to invest in new technologies or expand into new markets.
• Risk Management: Given the risks inherent in R&D and innovation, the board should include members with a focus on risk mitigation, such as overseeing technology integration, managing intellectual property (IP), and navigating regulatory frameworks. This is particularly important in engineering, where technological disruptions and compliance issues can affect long-term viability.

3. Operational and Strategic Leadership

• Scaling Operations: Directors with experience in scaling manufacturing or engineering operations, particularly in the shift from prototype to full-scale production, are essential. They can guide process optimisation, supply chain management, and quality control while helping balance growth with operational efficiency.
• Strategic Vision: The board should include members who have successfully led high-growth organisations, particularly in disruptive industries. Their ability to forecast market trends, set strategic priorities, and identify new business opportunities can drive sustainable growth. Experience in M&A, joint ventures, or strategic partnerships is also a valuable asset.

4. Innovation and Technology Adoption

• Disruptive Technology Focus: Members with a background in adopting or integrating disruptive technologies can help guide the company through the challenges of staying on the cutting edge. This includes expertise in AI, automation, digital twins, or Industry 4.0 technologies that are reshaping engineering and manufacturing.
• IP and R&D Commercialization: Directors with experience in managing intellectual property portfolios and transitioning R&D innovations from lab to market are essential. They ensure the company can protect and monetize its innovations effectively while aligning R&D efforts with market demand.

5. Market and Customer Insight

• Sales and Business Development: Directors with experience in sales, particularly B2B or industrial sectors, can offer insights into customer acquisition, market penetration, and global expansion strategies. Understanding customer pain points and how to align the company’s innovative offerings with market needs is critical for growth.
• Marketing and Branding Expertise: For a small-cap company, establishing a strong market presence is key. Board members with marketing, PR, or brand strategy experience can help position the company as a leader in its niche, enhance visibility, and build trust with stakeholders and customers.

6. Governance and Legal Expertise

• Corporate Governance: Directors with solid experience in governance frameworks ensure that the company adheres to best practices in board oversight, compliance, and ethical standards. This is particularly important as the company grows and faces increased scrutiny from investors and regulators.
• Legal and IP Expertise: Having a director well-versed in intellectual property law and contracts related to technology licensing, patent disputes, or joint development agreements can provide crucial oversight to safeguard the company’s innovations and mitigate legal risks.

Conclusion

A well-rounded board for a small-cap innovative engineering company should blend technical depth, financial expertise, strategic leadership, and market insight. This mix ensures the board can steer the company through the unique challenges of scaling innovation, managing risk, and capitalising on market opportunities while maintaining operational excellence and a long-term growth trajectory.

2/2

4o

You said:

Additionally, please provide the ideal experience of the chairman of the board for the aforementioned company

ChatGPT said:

ChatGPT

The ideal chairman of the board for a small-cap innovative engineering company should possess a unique combination of leadership experience, industry knowledge, and strategic foresight, with the ability to guide both the board and the executive team through periods of growth, innovation, and market disruption. Below are the key qualities and experiences that would make for an effective chairman:

1. Strong Leadership and Governance Experience

• Proven Board Leadership: The chairman should have a track record of serving as a board member or chairman in other companies, particularly in industries involving complex technologies or engineering. Their experience should demonstrate an ability to facilitate productive board discussions, manage conflicts, and build consensus among directors with diverse perspectives.
• Corporate Governance Expertise: The chairman must have a deep understanding of corporate governance principles, ensuring that the board operates effectively, adheres to best practices, and maintains a clear distinction between the board’s oversight role and management’s operational responsibilities. This includes familiarity with compliance, regulatory requirements, and ethical standards for public companies.

2. Industry-Specific Knowledge and Technical Understanding

• Engineering and Technology Background: The chairman should have a solid understanding of the engineering and manufacturing industry, ideally with hands-on experience or leadership in companies that specialise in advanced manufacturing, materials science, or similar technological domains. Their technical insight ensures that they can guide discussions on R&D, innovation, and product development.
• Experience in Disruptive Technologies: Given the innovative nature of the company, the chairman should have experience with disruptive technologies and the challenges that come with scaling and integrating them into the market. This could involve overseeing product transitions from prototype to production or understanding the commercialisation process for breakthrough technologies.

3. Strategic Vision and Growth Orientation

• Growth-Oriented Leadership: The chairman should have demonstrated success in helping small or mid-sized companies scale, particularly in competitive or fast-evolving industries. This includes guiding companies through strategic initiatives such as mergers and acquisitions (M&A), international expansion, or diversification of product lines.
• Long-Term Strategic Thinker: The chairman should be able to think beyond short-term financials and focus on long-term strategic goals. Their vision will help the company stay ahead of industry trends, navigate market disruptions, and make critical decisions about investments in innovation and technology.
• Track Record in Managing Risk and Uncertainty: Understanding and managing the inherent risks associated with R&D-heavy and capital-intensive projects is crucial. The chairman should have experience balancing innovation with sound financial management, ensuring that the company takes calculated risks without jeopardising its financial stability.

4. Financial and Capital Markets Expertise

• Strong Financial Acumen: The chairman should have experience in corporate finance, especially in capital raising, managing investor relations, and overseeing financial performance. Given the nature of a small-cap company, the chairman needs to be adept at ensuring the company maintains the financial flexibility to fund innovation and growth initiatives.
• Understanding of Small-Cap Dynamics: Experience in managing the unique challenges of small-cap companies—such as capital constraints, market visibility, and liquidity issues—is vital. The chairman should understand the expectations of small-cap investors and be skilled at navigating the pressures of quarterly performance while remaining committed to long-term value creation.

5. Experience in M&A, Partnerships, and Strategic Alliances

• M&A and Strategic Alliance Expertise: As the company grows, the chairman should be experienced in overseeing mergers, acquisitions, joint ventures, and strategic partnerships. These initiatives can be crucial for expanding market presence, acquiring new technologies, or scaling operations. The chairman’s guidance in identifying and evaluating such opportunities can drive long-term growth and value creation.
• Global Perspective: Ideally, the chairman should have a global outlook and experience navigating international markets, supply chains, and partnerships. As the company expands, having a leader who understands the complexities of entering new markets and managing cross-border collaborations is essential.

6. Strong Communication and Relationship Management

• Effective Communicator: The chairman must be an articulate and persuasive communicator, both in boardroom settings and when engaging with external stakeholders, such as investors, analysts, regulators, and major customers. They should be able to clearly present the company’s vision, strategy, and progress while fostering a culture of transparency and accountability.
• Stakeholder Management Skills: A key part of the chairman’s role is managing relationships between the board, executive leadership, and shareholders. The chairman must ensure the board’s decisions align with shareholder expectations and that management has the support needed to execute the company’s strategy effectively.

7. Mentorship and CEO Support

• Mentorship Capabilities: An ideal chairman should act as a mentor and sounding board for the CEO, offering strategic advice, guidance, and support. This partnership is particularly important for a small-cap company where the CEO may face high-pressure situations and complex decisions related to innovation, market competition, and growth management.
• Succession Planning: The chairman should also be forward-thinking in ensuring proper succession planning, not only for the CEO but also for other key leadership roles within the company. This ensures leadership continuity and stability as the company grows.

8. Adaptability and Resilience

• Adaptability in a Rapidly Changing Environment: The chairman should possess the ability to adapt to rapidly changing market conditions, technological advancements, and evolving competitive landscapes. Their experience should reflect a willingness to embrace change and help the company navigate uncertainties with confidence.
• Resilience in Challenging Times: The ability to stay composed and make sound decisions during crises—whether they are financial setbacks, technological failures, or external disruptions—is an important trait for the chairman. Their leadership can provide stability and direction when the company faces difficult challenges.

Conclusion

The ideal chairman of the board for a small-cap innovative engineering company should be a seasoned leader with a strong blend of technical understanding, strategic vision, financial expertise, and governance experience. Their ability to guide both the board and executive leadership through complex growth stages, manage risks, and foster innovation is critical to ensuring the company's success in a competitive and rapidly evolving industry.

4o

You said:

From where this information was gathered

ChatGPT said:

ChatGPT

The information provided is based on general knowledge, principles of corporate governance, and best practices derived from widely accepted standards in business leadership, particularly within the context of small-cap companies in innovative industries such as engineering and technology. It also draws on experience from corporate management theory, the roles and responsibilities of boards of directors, and trends observed in industries that prioritise R&D, disruptive technologies, and long-term strategic growth.

The suggestions and traits outlined for the ideal chairman reflect common requirements for leadership roles in such contexts, informed by:

• Corporate governance frameworks like those recommended by the OECD or various governance institutes.
• Insights from real-world examples of successful small- to mid-cap engineering and technology companies.
• Industry trends related to innovation, scaling businesses, and managing capital and operational risks.

This content is a synthesis of general knowledge rather than information gathered from a specific source or reference. If you're looking for more detailed studies or reports on board composition for innovative companies, business literature on corporate governance, management strategy, or specific case studies in engineering could provide further insight.

4o

The following contains the biographies of both Philip Suriano and Ian Neal, as presented on the LaserBond website. It is evident that Mr. Suriano does not possess the necessary qualifications or relevant experience to effectively serve as Chairman of the Board at LaserBond Limited. He is clearly out of his depth in this role.

For comparison, I have included Mr. Neal's biography, which highlights the fact that both Mr. Suriano and Mr. Neal have very similar backgrounds in finance and banking. Having both individuals on our Board is redundant. There is no need for two directors with such closely aligned expertise.

Furthermore, Mr. Suriano has surpassed what is generally considered the maximum tenure for a Non-Executive Director (NED). Given his lack of industry-specific knowledge required to be an effective Chairman, his prolonged tenure, and the overlap with Mr. Neal’s background, Mr. Suriano should not be re-elected to the Board.

Philip Suriano GAICD – Chairman / Non-Executive Director, Audit, Risk, Nomination and Remuneration Committee member Philip’s professional career spans corporate banking, finance and media. He commenced his career in corporate banking with the Commonwealth Bank (formerly the State Bank of Victoria). Philip then moved across into the Australian media industry, working in roles spanning operations, sales and marketing with Network Ten in Melbourne, followed by an in-house marketing/sales role within the Victor Smorgon Group before moving to Sydney as the National Sales Director at MCN (the sales and marketing arm of Foxtel). Since then, Philip has held various board roles for the last 17 years in corporate advisory/finance.

Ian Neal BCom Sf Fin – Non-Executive Director, Audit, Risk, Nomination and Remuneration Committee member Ian’s professional background is in financial markets, commencing as an equities analyst and moving to various banking positions until establishing Nanyang Ventures. Ian is a Chairman for The Executive Connection, where he mentors CEOs. He is a life member of the Financial Services Institute of Australia, a previous National President of the Securities Institute of Australia, and a member of the first Corporate Governance Council that established the Corporate Governance Guidelines. Ian was a director of Prime Media Group Ltd from July 2008 to May 2021. He holds a Bachelor of Commerce and a Graduate Diploma from the Securities Institute of Australia.