Board Efficiency: How to Unlock Maximum Value from your Board

As the CEO of a private equity backed business, creating and sustaining a strong and robust board of directors is critical to success. Unlike in public companies, where boards take more of a backseat role, your team will be front-facing and often take co-ownership of strategy and performance.

In this article, we’ll summarise some of the key learnings from our recent masterclass conversation between Jon Andrew, former Value Enhancement Director at Inflexion and LDC, and Dawn Marriott, Partner at Hg, on how to maximise board efficiency.

Extracting maximum value from your board during meetings

A high-performing board within a private equity-backed company should be preparing diligently for meetings to ensure time together is optimised. As CEO, it is your job to tee the team up. Ensure that the materials you intend to cover are circulated three or four days in advance of the conversation with specific callouts on topics you’d like to explore further. Your board members – among whom will be at least one representative from your investment partner(s) – should be encouraged to digest and come prepared with probing questions on your subjects for consideration.

“The real value-add for a high-performing board is where you’ve set up the discussion points in advance and the group feel prepared for an inspiring discussion on how to maximise the opportunity that is being discussed. For me, a board is performing well when they have the wider knowledge to facilitate a discussion on the market tail and headwinds as opposed to just variance in trading.”

Dawn Marriott  

You should also consider alternating the direction of your meetings. Set the tone with performance-focused updates on a monthly cadence but every quarter, step back and refocus the team on the wider competitive environment and how your value creation plan is trending within that context.

“You should be encouraging the team to think about high-level strategy as opposed to what is in line 17 of the management accounts. If you create this rhythm in your quarterly discussions, you’ll enrich the business and ensure your board are thinking about long-term value instead of simply what happens in their investment cycle.”

Jon Andrew

Establish the parameters for collective success

For many first-time CEOs, this might be your opening gambit in managing a table of investors, directors, and senior stakeholders in the context of a private equity-backed asset. Encouraging this group to look forward and act cohesively demands that you get to know your team and their personal style and ambition.

“Send out a questionnaire to the group containing six or seven questions focused on how they think the board is doing, what they expect from the group and what, in their mind, good looks like. When you receive the responses, take time to read and then set ‘Board Efficiency’ as an agenda point for the next meeting. This gives you leeway to challenge the group in a constructive manner.”

Dawn Marriott

Reviewing the mechanics of your board can be an effective forcing function for not only positive change but also aligning with your chair on the strategy for success. Don’t repeat behaviors for the sake of precedent – feel empowered to speak to your chair and suggest that the 80-page board pack, that is taking your executive team the best part of a week to produce but is never properly read or reviewed, might not be the best use of anyone’s time.

“I think the role of the chair in this situation is to think about board effectiveness, board composition and ask whether they’re having the right conversations at the right time. Work with your chair to align on what success looks like for the group and how to reset if things aren’t going to plan.”

Jon Andrew

Setting your CFO – and yourself – up for success

The role of CEO can be a lonely task – elevated above your executive team but detached from the relatively staccato motion of the management board. To drive board efficiency and ensure you do not end up isolated, work closely with your CFO to both empower their voice in discussions and ensure they’re educating you. The CFO should have complete intimacy with the numbers but make sure you’re comfortable too.

“In a PE-backed business, the CFO is having conversations with the deal team on a regular basis to ensure analysis is consistent. The heavy-duty number work should be happening pre board meeting.”

Dawn Marriott

By ensuring that your investment partners are clued up on the microeconomics before the board meetings, you avoid a situation where the conversation becomes forensic and alienates 80% of the people around the table.

“Junior fund employees often attend board meetings as observers and will be responsible for reporting back to their portfolio committee on the performance of the business. If they feel comfortable arriving into the discussion, time won’t be wasted on inefficient accounting questions.”

Jon Andrew

If you would like to learn more from Dawn and Jon around effective Board management you can download their guide “Five Top Tips for Managing Investor Relations During a Recession”


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