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Putting People before Profit in Aged Care. Brien Cree – MD Radius Care.

We have been looking into the possibility of an IPO for Radius Care as part of our future planning for the company, and it has raised some interesting issues for us around the importance of maintaining our integrity and culture in the face of a public float.

When I purchased Radius Care outright in 2010, one of my main drivers for doing so was to create a culture that puts care of our elderly first. The challenge with working for a company that is publicly listed is that the system forces companies to be accountable to shareholders before anyone else, including those the company serves. What this accountability generally equates to is returning quarterly dividends to shareholders.

Historically, what shareholders have not been as concerned about is what the businesses they have invested in are doing beyond making sure their bottom lines look good.

When you think about this, it doesn’t necessarily make good business sense. When you own a share in a business you should be concerned about how all facets of the business are working, not just how its bottom line is performing. I believe it’s time that shareholders took a greater interest in how the businesses they are investing in are performing at all levels, not just at a financial one.

I also think it’s the responsibility of companies that become publicly listed or take on private investors to be clearer about what their shareholders are buying into, and to manage the dynamic more courageously.

If we do consider an IPO, I plan to make it clear to our prospective shareholders that if they buy into Radius Care, they buy into a culture that is first and foremost passionate about caring for the elderly. While we do run a profitable business – because it doesn’t make sense to run a business at a loss – this is not our first priority. If we have to choose between more profit and better service, we’ll choose better service every time, and this might mean a smaller dividend in a shareholder situation. 

Having worked in a people-oriented industry for almost 25 years I do have faith that people are fundamentally good-hearted, and they don’t only care about money. It’s the system that can be callous, not generally the people who work in it, or indeed invest in it.

I’d like to think that with the new wave of "conscious" businesses, we will see more quarterly reports that focus on how the company has performed for people, planet, and profits. I have faith that in this scenario, shareholders will be satisfied in the knowledge that the business they have invested in is making a positive difference beyond just making money, and that through their investment they are doing their bit to help. 

About Brien Cree

Brien Cree
Brien Cree is the managing director of Radius Care, which has over 20 aged care facilities across New Zealand. With more than 20 years’ experience in the aged care and rest home property sectors, Brien has an in-depth knowledge of the market and issues affecting the elderly. As a former rest home owner/operator, Brien understands the industry in terms of acquisition, development, financing and day-to-day operational management. He genuinely cares for the elderly and the issues facing this demographic, and is passionate about providing the very best residential care services for New Zealand’s ageing population. Brien is also a board member and spokesperson for the New Zealand Aged Care Association and he frequently comments on a broad range of topics relating to his sector.