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Board effectiveness

The Role & Value of Board Meetings in PE-Backed Businesses

1 Min Read | Megan Pantelides

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“If you believe in the value-add of PE, then the board meeting should be a key vehicle for that.”

~ Calum Paterson, Managing Partner, SEP, & Chair, BVCA

After many years of successful fundraising, the private equity (PE) industry is as competitive as it’s ever been. Asset prices are high, and financial engineering isn’t the reliable driver of super returns it used to be. PE houses are now investing in technology, processes, and people to drive operational value creation and stand out from their competitors.

Portfolio company boards act as an important lever for value creation, and board meetings are crucial. These meetings are the principal forum for management teams, shareholders, and non-executives to come together to find alignment, determine direction, and ensure that the business stays on the right track. The board pack makes this possible and is therefore an important focus for PE houses and their portfolio companies.

However, after working with a growing number of PE-backed businesses, we couldn’t help but ask… are portfolio company boards working optimally? Are portfolio company board packs delivering value-enhancing board meetings? Or are these meetings a drag on performance, either wasting precious time and energy or actually detracting from value?

To answer these questions and better understand the potential of portfolio company board meetings, we’ve gathered data from over 100 investment professionals, portfolio company management teams, and experienced non-executives.

We’ve found a notable disconnect between what is expected from board meetings and what they actually achieve. The research has also revealed widespread concerns about the quality of reporting for PE-backed boards. For example, 86% of PE investors believe that board packs are too information-heavy, and 51% of directors say they can’t rely on their board packs to identify issues early enough.

Visit the link below to find out more and learn what leading boards and management teams are doing to deliver value-enhancing meetings.

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