Bill is Chief Investment Partner at Epiris, a leading investor-owned private equity firm with a specific focus on the UK mid-market. He heads the Investment Team and his track record includes investments in Hollywood Bowl, Innovia, Photobox and TGI Fridays. Before joining Epiris in 2014, Bill spent 13 years at LGV Capital, latterly as Managing Director.
What do you think other organisations could learn from PE-backed boards and vice versa?
I’ve worked with both PE and PLC boards, and the PLC board packs I’ve seen are full of procedural stuff — probably 30–40% of the pack. Unsurprisingly I don’t value that massively, but it’s a necessary evil for that world.
The best thing about PE boards is that you have the people who can make decisions there and then around the table. It’s the immediacy of decision making. Boards that spend ages making decisions and debating issues are not the best businesses.
Who gets more out of portfolio company’s board meetings: PE house or portfolio company?
Probably the PE team. The information aspect of it is clearly more important to us.
To produce a board pack that works for everyone, someone has to sit down with the executive team and say “what do you want from the board?” and “how do we organise it to get you what you want?”. Then it’s up to the investor to give the team proper feedback.
How long does it typically take for the board to be effective once a business has been acquired?
It can take 6–18 months to get the board working the way I’d like it to work. For the first 3 months both parties are trying to find their way. But if it’s not working after 18 months then something is wrong.
What does a perfect board pack look like to you?
I like a narrative rather than bullet points and PowerPoint presentations. A 2–4-page CEO report should tell me what the shape of the business is for that month. Then a 2–4-page FD report with attachments, and then reports on operations, strategic initiatives, capex proposals, HR and risk, etc.
Why do portfolio company board packs have so much data relative to narrative?
I know others would like to see bucketloads of numbers so they can do the analysis themselves. I, however, like the FD to tell me the answer and give me the appendix, so I can go and look at it myself if I want to. I want the FD to draw a conclusion rather than make the reader go and do everything themselves.
I once worked with a company which had a 300-page board pack, and one of the reports was 30 pages of numbers, words and acronyms. It meant nothing to me. I discussed it with the CEO; it turned out they’d had multiple PE representatives on the board in the past… and they’d each asked for more and more information, to the point where the pack had become a monster.
No one was monitoring this, and the team didn’t want to take any of this information out in case someone asked for it again down the line.
What’s your biggest bug bear about board information?
Unnecessary detail that the non-executives couldn’t possibly have a view on, acronyms, and jargon.
I also dislike information presented in a political or misleading way. When I first started in the industry I was asked to join a board on a legacy investment. The executive team had a culture of never wanting to deliver bad news. I looked at the numbers and saw they would soon run out of money, but when I challenged the team they denied it. Two months later the business went bust. They just didn’t confront the bad news early enough.
What is your golden rule?
In any interaction, assume that everybody else could see it. Or to phrase it slightly differently… if you create an advantage for you by misleading someone, it’ll come around and you’ll pay the price at some point.
In PE, you might win a deal by being clever or pulling a few tricks, but that will follow you around and people won’t want to sell to you the next time around. The same applies in your behaviour around the board table.
This interview is part of a series researching the Board’s value in Private Equity. Click here to get a copy of the report when we release it in early 2019 and upcoming interviews.