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The Alchemy of Leadership Blog

The Job Remains The Same

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I was sitting next to an experienced business leader at dinner earlier this week.  She’s been the CFO, CEO and Chairman of various consumer businesses.  We got talking about the differences between public equity – companies quoted on a stock exchange – and private equity, ie businesses owned by a private equity house.

My friend felt there were big differences between public and private equity, particularly if you’re the Chairman.  (Note: Chairmen can be male or female – the title doesn’t indicate gender).  In particular, a private equity (PE) Chairman is generally more hands-on.  S/he is more of an executive Chair, taking a close role in the development of the business as well as in board governance and company strategy.  A public equity Chairman, on the other hand, is more hands-off.  Their main role is to run the Board, not the business.  That’s the job of the Chief Executive.  The Chairman is there to ensure good governance, ie that the company’s strategy and performance are properly scrutinised by the Board.  S/he is a link with investors, particularly if they become unhappy, and a counsellor/guide/coach for the CEO.  He/she is also there to fire them if necessary, which adds spice to the relationship.

There are similarities as well as clear differences between the roles in a quoted company and a PE-backed business.  In the end, though, you find yourself in the same sorts of meeting rooms having the same sorts of conversations with the same sorts of people about the same sorts of issues.  Company strategy.  Execution.  Performance to budget.  Whether we’ve got the right people in place.  Remuneration and incentives.

When you come down to it, business is business, whoever owns it.  You may have to adjust your style to suit the ownership, but the fundamentals remain the same.

© Patrick Macdonald 2015

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