Biohubs need to establish good corporate governance

Establishing corporate governance from the outset is vital for a company to succeed. The process for companies managing research biohubs, however, has become a lot more complex and time consuming according to Adam Liberman, a partner at law firm Freehills.

The biohub concept is increasingly common in Australia. In NSW alone there are four, one each in the north, east and west of the city and one regional-area biohub. Each one is at a different stage of development, but all will face similar issues regarding corporate governance, Liberman said.

It's an issue that even a start-up company faces when getting established, but it's more complex for biohubs because there are so many people involved with varied interests, he said.

Biohubs involve people from research institutes, hospitals, universities, pharmaceutical companies, venture capitalists and government. Each one may seek to be represented on the company board.

"Good corporate governance requires that the interests of all the biohub members are properly represented on the board and it's not always easy to get the right balance," Liberman said.

"You need a proper foundation at the board level for the good administration and management of the company."

Liberman is currently providing legal advise to assist in the establishment of a biohub, as well as advising the participants of one of the short-listed Centre of Excellence bids, namely the Australian Centre of Biotechnology and Biodiversity. Over the years he has also assisted in establishing new Cooperative Research Centres (CRCs).

"Similar governance issues arise in establishing new CRCs, but the difference is that CRCs start off with a government structure and work from that, whereas the biohubs and the Centres of Excellence have no model to work from," Liberman said.

"Proper thought needs to be given to governance structure by the participants in biohubs."

Lieberman will be presenting these legal issues at the Biotechnology 2002 conference, April 29-30 at the Merchant Court Hotel in Sydney.