The requirements for executive boards and other senior management levels in companies owned by private equity investors generally differ from those of other companies.
Investors typically rely on shorter periods to implement their investments and have higher yield expectations. Private equity firms generally appoint a new chairman of the board or managing director/CEO early in the transaction process and frequently appoint so-called “Serial CEOs.” These directors assemble their teams from internal and new managers, resulting in a constellation of experienced and inexperienced individuals.
Leadership personalities must, therefore, operate under exceptionally high pressure to create value within a short timeframe. They have to learn how to establish an effective working relationship in the committees between managers with private equity experience and others that are not used to deal with Anglo-Saxon managers and investors.
Leadership personalities must ensure that senior management, investors and the board work together in a coordinated and effective fashion.
Leadership personalities must also implement successful change management when, for example, the business model is modified, parts of the companies are acquired or split off, new markets are explored, or cost-cutting programmes are implemented.
The Better Boards has a track record of working with Private Equity firms.
Example of contributions we made when working with Private Equity firms and their portfolio companies:
- Helped to define the characteristics of CEOs, other board member and senior executives to best complement the existing team.
- Facilitated quick and effective integration of new CEOs, other board members, and senior executives.
- Helped to create value creation programmes.
- Developed personal and board action plans that are linked to the value creation plan.
- Improved communication and collaboration between the parties.
- Helped to create and/or improve mutual trust and interaction between the parties.
- Ensured that parties share the same goals and a common vision.
- Helped leadership committees to focus their energies on achieving goals and creating immediate and sustainable value.