Leadmore ® Newsletter January 2014

Clear trend on board professionalization and competent teams

Private equity funds have long been at the forefront when it comes to professionalization and composition of board teams based on business challenges and competence needs, rather than classical networking relationships. With a typical exit horizon at 4-7 years and clear ambitions to maximize value creation during the ownership period, it has been natural to introduce new management paradigms from top to bottom of the management systems.

Need for speed and skills

Examples of this are, when private equity funds already during the acquisition process have made extensive fact analysis, so they up front can set the right board and management team to execute the strategic and operational tasks as defined for the ownership period. Or they turn from comparing oneself with the nearest competitors to world class benchmarking, and long democratic decision making processes are replaced by short fact based decision making processes. Last but not least, their ability to handle large amounts of complexity under very tight deadlines.

With the right competencies on the board team, it is also natural and moreover fruitful, that boards engage more closely in management sparring and business development projects - of course with due regard to the principles and recommendations for good corporate governance.

The best of the private equity world spreads to other ownership forms

A lot has been said about the way capital funds conduct business, not everything just beautifully and there are probably many prejudices in between. But one thing is for sure – there are several essential managerial disciplines, with sound and legitimate purpose to accelerate change and create value, which all businesses can benefit from – or will need, the day their competitor is owned by a private equity fund.

In my view, we experience these years a clear trend of professionalization of board work, and it is quickly moving into other forms of ownership like family owned, partner owned and owner-managed companies. They have all seen the need to strengthen their top management level with business-critical competencies, management sparring and, not least, to ensure that the generally more entrepreneurial management environments will put the spotlight on both planning and executing the strategy and the right priorities - all with the purpose to strengthen the company's solidity and reputation among customers, partners and employees.

For my own part 2013 featured 3 new board assignments:

Chairman of the board at COMM2IG A/S

COMM2IG is a Danish partner owned provider of customized IT solutions based on a complete selection of hardware, software and support to both private businesses and institutions within the public sector. A merger of COMM2 and 2IG with a revenue of 700 DKKm. Focuses today on execution of a new growth strategy.

Chairman of the board at HassBerg A/S

HassBerg is a Danish partner owned supplier of quality furniture and consultancy on creative and efficient office and educational environments to both private businesses and the public sector in Denmark plus export. Has double digit DKKm revenue and focuses today on execution of a new growth strategy.

Chairman of the board at Telecare Service A/S

Telecare Service is a mobile handset repair service provider for mobile operators, manufacturers and retailers on the Nordic market. Revenue in 2012 was 134 DKKm and focuses today together with the new main shareholder, the private equity fund Catacap, on execution of a Nordic consolidation strategy.

Leadmore® board portfolio with broad industry and ownership spectrum

The general trend in board work is also reflected in my own board portfolio, which today covers six different industries and four ownership forms with consolidated revenue close to 4 billion DKK and 1.500 employees.

Private equity

Telecom: Ventelo AS (EQT) – Board member

Read more: www.ventelo.no

Telecom: Telecare Service A/S (Catacap) – Chairman

Read more: www.telecareservice.eu

Partner owned

Telecom: Mobil2 AB and SAB Holding A/S – Chairman

Read more: www.mobil2.se

IT/software: CDRator A/S – Board member

Read more: www.cdrator.com

IT/software: COMM2IG A/S – Chairman

Read more: www.comm2ig.dk

Office furniture: HassBerg A/S – Chairman

Read more: www.hassberg.dk

Market research: Wilke A/S – Board member

Read more: www.wilke.dk

Family owned

Consumer foods: Kohberg Bakery Group – Chairman

Read more: www.kohberg.com  and www.koff.dk

Electrical switch-/control gear systems: Løgstrup Steel A/S – Vice Chairman

Read more:www.logstrup.com

Owner-managed

IT/software: JO Informatik – Board member

Read more:www.jo-informatik.dk


I wish you all prosperous and value-adding board work in 2014

Mads Middelboe

CEO & Executive Advisor

Leadmore®

 

 

 

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