In a presentation at the International Association of Interim Executives at the Four Seasons today, Prism Capital partner Stephen Vivian spoke about the unique nature of private equity boards. “The independent directors of private equity boards are much more immersed in active engagement with management, coaching them, mentoring them as they focus relentlessly on business strategy. ”
Often characterized as “player-coaches,” these independent directors play an important role in taking the company to the next level. “We find that the CEOs of these companies listen better to these independent directors because they’ve been there–they’ve run a business; they’ve been successful. They can make enormous contributions as mentors. However, the independent board members don’t work for the PE firm but rather have a fiduciary duty to act in the best interest of the company.”
In the best of all worlds, engagement, focus on strategy and commitment to one’s fiduciary duty are qualities that directors of private equity and corporate boards share.