Through the acquisition lifecycle, funds need to bring in the right leadership talent, specifically in board and C-suite roles. A strong leadership framework drives value-creation, operational efficiencies, and, ultimately, higher returns. Seventy-three percent of portfolio-company CEOs and 75% of CFOs are replaced through the investment process.1 According to one of our global clients, the estimated cost of portfolio-company turnover can be upwards of $2M per head as a conservative estimate, with indirect and opportunity costs inflating the total cost up to 20 times.
The need for inclusive leadership and diverse cultures is clear. Building an inclusive company profile not only contributes to investor value-creation but mitigates financial risk in the long run. Diverse boards, C-suite leaders, and teams are more productive and drive innovation. We source the diverse talent of tomorrow—closing the gender and race gap and identifying leaders from nontraditional industries.
Increasingly, boards of portfolio companies are focused on leading their businesses into a new era of profitability married to sustainability. Committing to environmental, social, and governance (ESG) goals is not just the right thing to do; it is good for business.
1 (Source: AlixPartners)
November 30, 2022 3 min read