A Board


I’ve been involved on a number of occasions with managing board restructuring exercises and each situation is different with varied and multiple drivers and each with its own unique problems that require addressing. There is no “cookie cutter” model in a text book that can be simply laid out as a process to be followed.

As an example I was on one occasion asked to manage the restructuring of a privately owned company where a cornerstone shareholder had been introduced in order to support an aggressive growth strategy resulting in a significant shareholder value uplift. The restructuring of the organisational model was fairly standard and straight forward but the formation of the new board with the various personalities involved required exceedingly careful management.  There were the fifty odd existing shareholders, the new cornerstone shareholder and the existing board members all of whom needed to be consulted and whose agreement was absolutely essential to ensuring a harmonious and robust professional outcome.

First of all I drafted an extremely comprehensive and holistic governance document pertinent to the new boards operation. The document was extremely detailed covering all aspects of the board procedures, commercial behaviour, operating parameters, accountabilities and responsibilities etc. The detail was only in draft as the new board at their first meeting would need to amend where necessary and then approve the governance document, official adopting its procedures and accountabilities.

Then using the newly approved strategic growth plan I developed a detailed check list associated with the skills and experience required around the board table in order to support the successful implementation of the strategies outlined plus ensure the continuing financial stability of the company. This was not a difficult task as the requirements were matched against the company’s strategic plan objectives with perhaps a little bit of diversity thrown in for good measure. It’s important that if this task is carried out in a professional manner without any ideologically focused personal inputs the resulting recommendations should be hard if not impossible to argue against as they will reflect the attributes and skills required to ensure strategic implementation success

The next step was to obtain the existing shareholders and the new corner stone shareholder agreement on the structure of the board itself. How many directors should there be, who had the responsibility for the appointments, should the Chairman appointment be made by the new directors from amongst their own group or the shareholders by a separate vote? While this looks an easy task, believe me with fifty odd shareholders all with varying percentage interests and a new cornerstone shareholder this task was fraught with difficulties. It was important that all the shareholder understood that the legal constitution of the company would require amending to reflect whatever decision they reached.

The final step was to identify individuals with the required skills to be considered for selection and nomination as directors of the newly formed board. It was critically important that the search was spread as wide as possible via local and personal knowledge, direct media advertising, and contact with other professional bodies such as the local Institute of Directors etc. Once the various individuals had been identified they were catalogued into a matrix and matched against the skills and experience already identified as being required. This matrix list was then provided to the shareholders to select and vote in the candidates they choose to be the custodians of their wealth.

In summary and perhaps of interest to this audience is that the company I was involved with decided the following.

The existing shareholders would appoint two directors to the board from within their own ranks, the new cornerstone shareholder would appoint two directors and the combined shareholders would appoint two independent directors and an independent Chairman. All seven appointments would be matched and balanced against the experience and skill base requirement already established. In this case the process went smoothly and the new board now in place functions extremely well

The point to note is that this whole process takes time and a great deal of trust and skill to enable a consensus to be reached amongst such a wide group of people all with varying degrees of personal interest. The process is best managed by an outside independent professional who has great people skills and an in-depth knowledge and experience of governance issues and processes.

"It’s important that if this task is carried out in a professional manner without any ideologically focused personal inputs the resulting recommendations should be hard if not impossible to argue against..."

Stay in
the loop

Fill out the form to subscribe to our newsletter. Keep up to date with news and insights from our partners.