If the role of a Chair is crucial to shaping the success and direction of any organization, it is particularly important for a private equity-backed business. Recruiting C-suite talent to our portfolio companies, whether at the point of investment or later, is one of the key ways we at Sovereign add value for our management teams. We place a real emphasis on forging strong relationships and identifying and facilitating the appointment of some of the leading names in their field.

A great Chair possesses a unique set of qualities that go beyond mere leadership skills. They bring experience and strategic vision to the table, fostering an environment of trust, collaboration, and accountability. A sense of caring is therefore paramount. Good times and bad, the right person will be wired to ‘take it personally’. No matter their track record and previous successes, is the individual naturally motivated to care and to push for maximum quality, maximum results?

A sense of urgency is also paramount. From the minute the ink is dry on a deal, and no matter how long an exit ultimately takes, successful private equity investing is often about pace. The Chair is crucial in setting the tempo of the business, whether it’s implementing the 100-day plan, refining reporting, strengthening a management team, or encouraging change. A positive first step for a Chair is to assess the dynamics of the boardroom. What is the mood like, how do the relationships work and how can they be improved?

In our experience the best Chairs also tend to combine mental dexterity with an excellent grasp of commercial opportunity. A successful exit is all about delivering a credible equity story. Sometimes this evolves over time in line with market trends, sometimes it happens on a different timetable (speedy or prolonged). A good Chair always has one eye on wider market conditions and will keep pivoting the business to maximise its attractiveness. A feel for making changes ahead of the time when an opportunity to exit is likely to present itself can make all the difference.

Understanding people underpins all the above. Are there gaps in the management team? If so how to ‘infill’ around areas of weakness at speed? Bringing management on the journey and generating buy-in and excitement when there are fundamental changes that need to be made is critical. To be heard effectively, respect and strong stakeholder relationships are vital.

The ability to solve complex problems is one way to build this respect. Alongside organic growth, sourcing credible M&A opportunities is often key to an equity story, certainly for Sovereign, as is finding good people to augment the existing workforce. It is a real positive when the Chair shows commitment to contributing to these three areas, thinking creatively in terms of their own network to do so and then following through to make sure any commercial opportunity that flows from an introduction they’ve made is properly explored. Again, this links back to pace and cadence of change across an organisation – how quickly can the more difficult windows of opportunity be explored, unlocked and climbed through?

Finally, a good Chair should form a last line of defence. They should help to ‘copper-bottom’ an investment proposition. A good question to ask yourself when selecting one is, if needs must, can this individual roll-up their sleeves and adopt an executive mindset for as long as required? Conversely, does the individual have the gravitas and self-assurance to avoid meddling for the sake of it? The central aim is to have management and the business operating at brisk pace and the peak of their potential. A good Chair will find a way to achieve that.

To find out more about how we help our portfolio companies find the best talent, feel free to contact me here.