Our Work

Our clients are at the heart of everything we do and we are passionate about ensuring that everyone receives the best possible service we can offer. Read on to learn how we have helped boards build stronger businesses.

Case Study I Conflict and Strategy

A medium sized business, in a low margin industry, with turnover of approx. £100m sought us out to evaluate their board. 

Their main competitors were either small businesses who would drive industry margins down or a few larger players with significant resources and international reach. 

The business was preparing to change strategy to move away from the low margin end of their business to work with clients who were more focused on the service that they offered, domestically, with associated higher margins. 

The two main shareholders had run the business for many years and in the last three years, had made two acquisitions through shares, thereby diluting their interests.  

Through our evaluation, we observed the following:

  • Company was under capitalised and significantly borrowed having recently taken on some very expensive facilities once they reached their bank limits
  • The two shareholders did not share the same vision or perspective on much and were barely on speaking terms
  • Their decision-making process was deeply flawed based not on a shared vision and agreed strategy but on who won the argument either through manipulation or sheer obstinacy
  • Governance and oversight of the board was futile for all decisions were deferred to the two warring shareholders
  • The risk of the business collapsing was very high due to 1) the dysfunctional leadership; 2) unclear strategy for the future and; 3) under capitalisation and highly geared nature of its financials

The recommendations we made included:

  • Appointing an independent, experienced and considered Chairman to the board – to provide a steadying hand and much needed stewardship for the board and for the business
  • Reviewing options for the next phase in the business’ growth including splitting the business
  • Conflict coaching for both shareholders – to get over their differences and to learn to respect each other, in order for them to work more effectively and collaboratively for the sake of the business

Outcome:

The business was faced with three options.

  1. Do nothing and face probable insolvency
  2. Do nothing and sell at a probable distressed price
  3. Make recommended changes to sustain the business

It has to be noted that the longer the it takes to make a decision, the less attractive the outcome.

Despite these potential consequences, the two main shareholders could not agree on the to set aside their differences for the viability of their business.  The business has since shrunk and decreased significantly in value – as it starts to fail and key members of staff leave for more promising options.

Case Study II Generation change & succession planning (lack thereof)

The Company is a medium sized family owned asset heavy business.  All of the shares are owned by the Chair and his wider family.  The company is not particularly profitable by industry standards and EBITDA is declining to the extent that the Company struggles to replace capital equipment in a timely manner.

Through our evaluation, we observed the following:

  • The board consisted of the Chair, an external non-executive director, a long-standing operations director (and also a close friend & ally of the Chair), as well as two executive directors who were recruited from major competitors in the last three years
  • Board oversight was largely a formality and very little time was spent looking at the future of the business.  The lion’s share of the board meetings and communications were either about deferring to the dominant Chair or trying to manage him and his expectations as new proposals were put forward
  • The Chair was losing touch with the details of the business and tended to show favouritism towards the operations director, as well as one or two areas he still felt that he understood, ignoring the modernising ideas of the newer executives.  The Chair was deaf to warnings that he and the business were out of touch with the direction in which the industry was heading
  • The Chair had discussed relinquishing his hold on the business by saying he would exit soon, but three years later, this was little sign of this happening
  • The structure of the board was questionable, where none of the executives really had the will to stand up to such a dominant Chair, despite their individual and combined expertise in their specific roles
  • There was no clear succession plan and it appeared that the Chair had little desire to put one in place despite his stated intentions.
  • The risks to the business were that it was 1) driving itself into the ground with a blinkered captain at the helm; 2) exacerbating its own situation by clinging steadfastly to outdated practices; 3) talented employees were jumping ship before it crashed

The recommendations we made included:

  • The Chair relinquishing control over the day-to-day operations of the business
  • Appointing stronger and more experienced board members and giving them the freedom to make appropriate changes
  • Introducing better processes for more effective oversight and reporting, and to ensure a more independent role for the Chair with clearly defined duties
  • Consider and implement an appropriate succession plan and to factor in specific family business considerations such as inheritance tax implications, as well as leadership development for the next generation
  • A clear and forward-thinking strategy for the future of the business
  • A coherent and effective approach to attract & support senior managers – recruitment, development and compensation – to increase commitment, alignment and investment into the future of the business

Outcome:

  • The business reviewed and considered the recommendations made and decided to take them up
  • During to regular follow-ups since, it appears that the changes made have had a positive impact for the business.  These include:
    • A more engaged and committed senior management team
    • A new independent chair
    • Greater clarity of business mission, objectives and strategy, which has led to better execution of said strategy
    • A much improved and more diverse skillset post hires
    • Work is still being done to decide whether to sell or retain the Company in family ownership through to the next generation
    • The business is growing well and is attracting talented managers

Whilst there is no guarantee that recommendations made will lead to immediate success, in this case, the client did take our review and its findings seriously, which resulted in positive change for them.  The Chair and other board members saw that the viability, health and future of the business were greater than the desires of one or two individuals – which is exactly what the role of the Chair and board members is there to perform.