What an excellent post from Discern over at SI board.  Everyone should read this.

I completely agree with his steps and his well thought and written post.

As a side note, the dissidents who wish to replace the four members of the BOD are not there to take control but to change course.  I have read that some shareholders had concerns with Glorieux (Dr. Francis Dube), Eric Wallman and Brian Bosse replacing, Aubrey Eveleigh, Keith Morrison, Barry Allan and Sean Whiteford.  The current "experienced" BOD havent done very well so far as everyone that has read all the complaints can come to this conclusion.  In my opinion, the new dissidents do have business and accounting experience and could be a benefit to help bring the shareholder value to a much greater value than what we see now.  Please read below.  I think Discern makes excellent points.  Maybe the Dissident members can take some notes from this!

Q*bert

Happy Spring Everyone. I have chosen not to post for a while for a couple of reasons - #1 because my son just got married and my life has been a bit chaotic and #2 I would be considered one of the dissenters and even though I am not privy to any of the plans or ideas of the leadership group, I supported this group with my shares. I am not promising to vote with the dissenters because like many of you, I don't know what their plan is, nor have I investigated their track record. I do support the dissenter group because we need clear direction that has been missing from our management team for as long as I have invested in ZEN and I knew that a vote would be in the best interest of ZEN whatever the outcome.

So as a "dissenter", but even more as one who desires reinvigorated leadership for ZEN, I share a few thoughts.




What I am looking to see from the current board or a new board of dissenters



First of all, I believe that the most impactful thing a board can accomplish is to hire the CEO and evaluate his/her performance.

Secondly, the board represents the primary stakeholder and is tasked with directing and protecting the mission of the corporation.  

Directing is the responsibility to clarify mission critical aspects including: the vision of the corporation, values, boundaries in which the CEO operate and overall goals that they expect the corporation to achieve.



Protecting is the responsibility to ensure the board members perform their fiduciary duty in legal matters and keep the corporation from financial and legal risks. The board must also ensure that the vision and mission of the corporation is being protected from a CEO’s personal agenda or incompetence.



So with the above expectations I have of a board, I would want to see the following:





#1 clear purpose of ZEN – this shouldn’t be hard, but it is time to publicly state what we are going to accomplish - the highest value graphene company in the world. In the last press release we heard something approaching that, but I am actually not satisfied with trying to become "one of", I actually want to be the best.



#2 corporate values – boards can spend too much time in these, however, there are a few values that should underpin ZEN that describes how the corporation will make decisions:

A few that I would recommend off the top of my head would include: environmentally responsible, advancing technology, locally supported, strategically developed (A way a value could be seen in action would be to work with the government and Sussex University to provide a graphene-based water filtration system for Constance Lake First Nation… That is where we need government funds).



#3 Assessment of current status – What progress are we making? What have been the major obstacles? How are our NDA’s progressing and why aren’t they? Which NDA’s/partners should we discontinue because they have placed too much restriction on our promotion? How close are we to commercialization? What kind of decision matrix is used to determine which studies to provide graphite to? What steps have been taken to market our product directly to corporations with the current results from the research? What kind of interest has ZEN received after Tokyo Tech’s report that identified specific characteristics that make ZEN graphene disperse better than baseline samples? 

Obviously, I can't answer those questions, because the current management has been unable/unwilling to answer direct questions. I expect a board and CEO will demonstrate their strategic competence and understanding of business and their product by answering those questions to shareholders.



#4 Setting realist goals based on our current status in four key areas 

Mineral Processing and Mining development

- Timeline for metallurgy including an outline of the factors that could change the time-line and quarterly updates on progress

- The steps of the mine development plan, factors for the next phase of the plan to begin and capital required

Research into graphene production and graphene-based products

- Analysis of current ZEN research compared to base samples

- Realistic business Assessment of graphene markets and the basis for engaging specific markets

- Choosing at least one high-valued market that will align with the mining development plan with a partner that is willing to provide a reasonable amount of transparency (If you have the best product, you can boast).

Promotion of ZEN as a future international graphene producer

- If ZEN plans on become a world leading graphene producer, it must begin acting like a world leading graphene producer. As long as ZEN remains a small obscure mining jv, the company will have difficulty in raising the funds required for production or face significant dilution. Secondly, as long as the company remains obscure, large corporations who we need to make deals with will assume that we have no option but play by their rules. If we have the best product, then companies should be lining up and it should be a privilege to be in the ZEN universe. This will only happen if ZEN builds a recognizable brand.

- Marketing strategy that accurate reflects the ZEN opportunity to venture capital markets beyond the narrow mineral jv’s 

- Key markets

o high technology - a way to create a buzz in the high technology sector for example is to provide 1 gram samples to any Canadian research team and reward $100k to the researcher(s) who comes up with the most significant use for ZEN graphene. Imagine 500 engineering students using their final years at UBC, Western, Waterloo etc. across Canada conducting experiments with the best graphene in the world produced in Canada.

o green space – appealing to investors to provide capital funding as a means to reduce climate impact

o bio-medicals etc. since graphene is a futuristic product with incredible applications.

Business Development securing partnerships and contracts

- move away from NSERC grants and government funds and build commercial partnerships

- based on the current results, target specific business applications and market to multiple competitors for the purpose of securing an exclusive agreement with one

** The goal in each of these areas might actually be to get a goal – i.e. by June 2018 we will review our current mining development plan and identify the next crucial phase, the cost of this next phase and a consulting firm that will be commissioned for this work.



#4 Evaluation of current CEO and staff – It is time that the board takes a long hard look at our current CEO to evaluate whether he has the skills and the desire to really advance ZEN. I spent four years responsible for hiring and developing staff in the non-profit sector. The most basic behavioural assessment training tool is that past performance is the most reliable predictor of future achievement. The only three areas where this is not true is because of incarceration (prison or coming out of a prison like experience), conversion (a religious awakening) or calamity (sickness, accident etc.).

I believe AE might have an important role in the future of ZEN, but I am not convinced what the role is. I would love to conduct a two hour behavioural assessment with him and find out. Whatever role emerges for AE his careful progress should be respected because a leap into a low value graphene application would have reduced our potential exponentially. I believe that there are necessary endings in life but when they happen they should end as well as possible.

#5 Hire staff for the future – after the future of ZEN is determined and after the evaluation of the current staff the board would either recommit to the current CEO, or go out and hire a CEO with the skills to advance the boards goals for ZEN on behalf of the shareholders.




Some closing thoughts

I am disappointed in the manner in which our current management has handled the dissidents request for a meeting. When leaders are challenged they can view that exchange as a time of conflict or as an opportunity to demonstrate vision and real leadership. I booked a flight and booked off work so that I could attend a meeting for the proposed April 23 and 24th meeting. Not respecting timelines by the ZEN management team demonstrates that they are not concerned about hearing or engaging their shareholders but are trying to manage their own agenda as a priority. This change in time is an inconvenience and a cost for me personally that good management would have avoided.




I am looking forward to some great conversation over the next few weeks as the plans of our current management and the dissident group emerges. I trust that everyone on this board will do their best to remain on point and bring critical thinking into our discussion without falling into unhelpful criticism.




Discern