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Insights and Comment

8 August 2012

Private Equity

by Nigel Turner

For those members who attended our March meeting (Private Equity – What’s been happening and what can we learn?) there was resonance in a recent article in the Sunday Times appointments section (July 29th).

Our speaker, Lisa Stone of Hg Capital, had described the operating practices of private equity boards:

“Whilst we have training on governance and are strong on financial reporting, we try to avoid overkill. We make sure each organisation has a risk review, an audit committee, disaster recovery and succession planning. We probably spend less time and use less paper. But our non-executives are closer to the business and the CEO.”


She had also commented that this approach was increasingly attractive for many NEDs.

The Sunday Times article, entitled ‘Joy of buyout boardrooms’, makes similar comments about proximity to the business, highlights the absence of reputational issues / ‘politicisation’, and cites a 12% pay differential in favour of private equity. The article also comments on how one in five PE NEDs receives ‘options’ in the company and briefly discusses the pros and cons of this for PE owned and publicly owned companies.

For FTSE 250 and AIM companies there is apparently an ‘unnoticed flow of talent from quoted companies into private equity businesses’.


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