The corporate governance model applied by private equity is fundamental to the value creation process in portfolio companies. It involves active ownership, small, empowered boards and efficient decision-making.
At IK, we are deeply committed to responsible governance. This starts internally with the clearly established distinction between the investment manager and investment advisory functions.
We also ensure that each of our portfolio companies puts in place a robust governance and management structure.
A board is appointed as soon as a portfolio company is acquired. A carefully chosen team of specialists, it combines members of the management team and selected experts. The board is responsible for implementing the company’s strategy and ensuring that it operates in accordance with IK values and the principles defined with management.
IK interacts with portfolio companies primarily through the board of directors but also through regular contact with the management teams.
By investing in the company management establish a strong alignment of interest between the investors, the board and the company management.
Expert boards, professional supervisory structures and appropriate management incentives encourage best practice and discipline, so helping portfolio companies to grow and develop. Strong corporate governance also supports independent decision-making.
Corporate responsibility is an integral part of IK’s commitment to robust governance, and we highlight its importance with all portfolio company boards. We constantly strive to provide support for management so that they recognise and capture the opportunities and manage the risks associated with ESG issues. We pursue this strategy for two simple reasons: it makes sound commercial sense, and we believe it is right.