Sovereign SmartViews: The real value of the right Chairperson: Beyond the checklist
by Matthew Owen
The real value of the right Chairperson: Beyond the checklist
Running your own business is a round-the-clock challenge, yet it’s one of the most exciting ventures someone can undertake. When we back a business seeking to achieve ambitious growth, one of the first things we do as part of our investment strategy, is to introduce a non-executive Chair to the board. Why? Because when it all boils down, the right person with the right breadth of skills and experience can enhance the investment journey and outcome. We work extremely hard to find the right person for the role each time. Here is some of what we have learned over the years.
What the Chair is not: First let’s be clear on what a good Chair is not. They are not a book of contacts. This is often talked about as a desirable characteristic, and whilst potentially useful in the short-term, it’s rarely of enduring value. And to use football parlance, neither should a Chair be part of the “prawn sandwich brigade”; a grandee keeper of corporate governance who sits at the boardroom table talking about regulations in between mouthfuls of lunch.
We look for four main characteristics:
Experience of the journey: Have they done it before, most commonly as a successful CEO? Have they navigated difficult industry issues? Have they acquired and successfully integrated one business to another? Is their expertise in the same space? Growing a company from £50m to £200m is quite different from growing one from £200m to £500m - each brings very different challenges.
Challenge & balance: While our Chairs are typically non-executive and therefore not full-time, it is vital that they can hold the executive team to account. But this ability to challenge must be balanced with the EQ to recognise when the team or an individual is struggling and needs help. Being able to see through bravado and provide advice or mentorship is of equal value.
Vision & clarity: Ultimately, does the Chair have a clear picture of where the business needs to be in order to achieve its strategy? While the CEO is the day-to-day commander in chief, the Chair should be able to keep an eye on the horizon and help look 3-5 years out. One of the biggest skills they can offer is clarity of thought around the priorities that will turn strategic vision into reality. A company with too many ‘top priorities’ risks tying itself up in knots.
Flexibility & commitment: For Sovereign, a great Chair can dial their involvement up or down depending on what the business needs. Businesses and their boards go through peaks and troughs of activities and if the call goes out for ‘all hands on deck’, the Chair needs to be able to be there.
At Sovereign we are very clear on what we look for and have worked with many fantastic Chairs over the years as part of our unique Buy & Build programme.
We’re always on the look-out for talented people and great companies – please feel welcome to get in touch if you’d like to talk about what we might be able to do together.