As the IPO climate remains positive, what do the CEO and board need to address to enhance public company readiness? We offer five suggestions.
1. Thoughtfully consider the business case for going public long before starting the journey. Also, develop a strategic plan which your team can execute to be properly prepared. Going public certainly has its advantages—liquidity, returns for investors and employees, and a true valuation for the business for owners who desire to monetize their company. Like all good things, becoming a public company has its price—costly and time-consuming reporting, less time to run the business, a shorter-term orientation as the market determines your valuation, and increased attention on the associated reputation and other risks of being public.
2. Don’t underestimate the level of effort, wear and tear on your people, and potential disruption to your business that an IPO requires. Effective financial systems and robust internal controls all are necessary to get ready for prime time. So is an efficient period-end financial close (at least seven to 10 business days) and a scalable IT environment.
3. Start acting like a public company before you have to for real. For example, give the financial close and earnings release exercise several dry runs. In regulated environments, a strong corporate governance process and control environment are critical to compliance with Sarbanes-Oxley, exchange listing standards and applicable industry regulations. Assemble a superb team to get the pieces in place, including treasury, legal and internal audit. Develop a public company consciousness among employees to initiate the discipline.
4. Make sure you have a “market facing” CFO who can effectively manage the IPO process. He/she should be able to handle the follow-on activities with analysts, underwriters, investors and other external stakeholders. A “been there, done that” CFO can help manage the distraction of the registration statement process, organize “road show” presentations, and effectively manage the critical ongoing quarterly and annual reporting requirements once the IPO goes effective. Also, the CFO must ensure there is a reliable business forecasting process and manage investor/analyst expectations appropriately.
5. Surround yourself with experienced people. This includes board members, legal counsel and external trusted business advisors who understand the dynamics of transforming to a public company. Tap into their experience to deal with the legal and regulatory hurdles to going public. Agree on the issues the CEO and board collectively must address in preparing the company, including actions each must take. For example, it is common for boards of pre-IPO companies to address independence and composition requirements, form the necessary committees (e.g., nominating, audit and compensation), organize for risk oversight, define matters requiring board approval, approve the compensation structure, and ensure an effective tone at the top, among other things.
In summary, we’ve provided suggestions around readiness. Yes, pricing an IPO is important, but getting ready for prime time and having a well-planned positioning and communication strategy in place are vital prerequisites for maximizing the value of going public.
Joseph Tarantino is president and CEO of Protiviti, a global consulting firm (www.protiviti.com). He has more than 27 years of experience working with a variety of organizations to enhance their business performance through risk management, operational effectiveness and enhanced governance. In 2014, Tarantino was named one of National Law Journal’s 50 GRC Trailblazers and Pioneers.
Steve Hobbs is the global leader of Protiviti’s Public Company Transformation practice. Hobbs has more than 30 years of experience providing business consulting and financial reporting services to clients in numerous industries, primarily technology and consumer products companies.
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
