Heidrick & Struggles: Chairing Private Equity vs. PLC Boards
Heidrick & Struggles was recently the host of a chairman dinner discussion that focused on private equity versus publically listed company boards.
A headline of the discussion was the benefit of owners being in the boardroom at private equity firms. Especially at a time when PE firms are under a higher degree of scrutiny, the immediacy of investors and owners in the boardroom helps facilitate strategic decision making. Whereas the value cited in PLC boards is their increased focus on remuneration and corporate governance.
The following is an excerpt from the article: “The boards of any business are stewards of the capital that has been invested in it. Whether they represent the focused capital of private equity or the diversity of the public equity markets, it is important that directors strike the appropriate balance between financial returns and social responsibility. Both ownership structures and board agendas have merit. Public company boards can run the risk of short-termism and a restrictive focus upon remuneration, compliance, and governance, while private equity-controlled businesses must ensure that they balance the creation of value for investors with the social responsibilities of a business and its long-term future.”