Hamish is Chief Operating Officer at Aspen Pumps, a global leader in specialised mini-pumps backed by 3i (and previously backed by Inflexion). He has been on both sides of the private equity board table, having started his career as a private equity investor in South Africa with Nedbank before moving into an operational role as CFO at Massbuild, a leading South African retailer.
Would returns be lower without board meetings?
Yes, you need to have someone or some forum to hold management to account and you need that to happen regularly. Without it, management can get bogged down in day-to-day operational tasks rather than focusing upon the issues that will drive the organisation forward.
Board meetings encourage a sense of ownership and responsibility. This is one of the things that makes the PE model work — and something other organisations could learn from.
Do board meetings vary much by investor?
The feel and focus of board meetings largely depend on the investor.
For some, monthly board meetings are an investor update meeting — the investors want to see everything is on track, that the money is being managed well. In these meetings time is naturally focused more on current performance than on strategic topics.
In other cases, board meetings are focused on decision-making and the strategic direction which, for management, is a breath of fresh air!
What does a high-quality board pack tell you about a business?
A good board pack shows high-quality thinking by management, but your ability as a management team to deliver this can depend on the availability of accurate data.
Getting the board pack right is an ongoing process — it involves understanding what the current information is telling you and then identifying what additional information is needed to tell the full story.
Board packs also need to evolve as the organisation evolves — what were priorities 5 years ago may not be priorities today.
What advice would you give to others sitting on PE-backed boards?
Don’t be scared; talk, challenge and engage. Though once a decision has been taken, give it your all to make it work.
What’s the best piece of advice you have ever received?
A Chairman once said to me, “If Board members are not willing to speak up and voice their opinions, there is no point in them being in that meeting. Their view might be wrong, but the debate is one of the best ways to learn.” That has stuck by me. It taught me to not be afraid of speaking up, asking questions and challenging views, even though I might be wrong.
What is the smartest business decision you have made?
Stepping out of PE and getting into business. PE investors tend to want a lot of information — they are analytical by nature and they will be drawn to data. But that’s not what running a business is all about, it goes beyond data.
I have been on both sides of the table and as a 30-year old PE investor I found myself telling a 50-year old guy how to run his business, based on a spreadsheet. I realised that I didn’t have the real commercial knowledge to do that, so I left PE to try and see if I could actually run a business myself.
This interview is part of a series researching the Board’s value in Private Equity. To get a copy of the full report, click the button below.