Is the market for initial public offerings back?
After a long, dormant period for new issues caused by the financial crisis and recession, the pipeline of potential flotations is reportedly strong.
But the markets remain volatile, and investor demand for high-priced or risky floats is weak.
In this environment, it is more essential than ever that pre-IPO companies are led by a strong and effective board of directors.
A high-calibre chairman and board will help management teams make the cultural transition from private to public hands. It can bring its knowledge to bear on risk management, internal controls, investor and media relations, and corporate governance.
It can ensure that the IPO process does not detract from the successful running of the business, and give investors the confidence to back the float.
This paper looks at the questions that companies preparing for IPO should be asking about the composition of their board.
- How many non-executive directors should be appointed, and from what backgrounds?
- What skills and experience are needed in a chairman?
- Which provisions of the UK Governance Code must be applied in advance, and which may be incorporated over time?
- What differences of approach are required if the listing is planned for Aim
- versus the Main Market?
Odgers Berndtson has extensive experience in advising pre-IPO companies on critical board appointments. We have drawn on interviews with directors from companies that have recently floated or are planning to do so, as well as from City advisers and private equity professionals.
The result is a ‘how to’ guide on getting your board right, and so maximising the chances of a successful flotation.
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By Paul Butterworth MNI, Global Head of the Maritime & Shipping Practice at Odgers Berndtson