LEADING A BUSINESS THROUGH IPO, EXIT AND BEYOND

• Deciding whether to float or not?
• Short, medium, long term – the pros/cons of different scenarios
• How to enhance shareholder / stock value
• What are the pitfalls which can result in a flotation and how to avoid them
• What are the Corporate Governance, risk mitigation and due diligence requirements?
• How do you go about assembling an effective Board of Execs and NEDs?
• What are the key skills of a successful Non-Executive Chairman?
• Examples of leading ailing businesses through turnaround and learnings gained.

DECIDING WHETHER TO FLOAT OR NOT?

Need to be certain you want to move into a public spotlight that comes with being listed

Significant greater rules and regulations as a public company

Undergo internal audit to ascertain whether the business is in a position to do so. A full business review

Assessing in advance issues including:

• Corporate structure
• Board structure
• Board and senior management abilities
• Corporate Governance analyses
• Issues which would prevent Listing
• Internal control reviews
• Tax check ups and requirements

UNDERSTANDING THE REQUIREMENTS OF INSTITUTIONAL INVESTORS

• Solid management team
• Proven concept
• Sizeable market opportunity
• Differentiated proposition
• Rationale for joining the AIM
  • Growth Capital
  • Raise profile
  • Incentive / retain staff through tradable equity

The items above should form an executive summary to the superior strategies for business plan and strategy document, together with a financial summary, to use as a preliminary document to start to assist the Company.

IPO PROCESS – PHASE 1 – STRATEGIC ISSUES

Strategic issues:

• Business Plan and Strategy
• Rationale for an IPO
• Capital Structure and Debt Financing
• Intentions of major shareholders post listing
• Issue size and structure
• Timing
• Advisors
  • Nomad
  • Legal
  • Accountants
  • PR
  • Registrars

Indicative AIM flotation timetable

The Advisors

IPO PROCESS – PHASE 2 – PLANNING

Planning:

• Corporate Structure and domicile
• Financial Track record
• Dividend policy
• Board Structure and Corporate Governance
• Incentivisation Schemes
• Employee Participation
• Project Timetable

DUE DILIGENCE

• Financial Modelling
• Long Form report
• Commercial due diligence
• Legal due diligence
• Prospectus Drafting
• Shareholder Agreement
• Underwriting Agreement
• Lock up undertakings
• Roadshow presentation

We will guide you in the selection of the relevant professionals who can provide relevant services around the above activities

COMMERCIAL AND FINANCIAL DUE DILIGENCE

• Detailed operational, commercial and strategic plan for the business
• Business development opportunities
• Detailed budgets and forecasts

At this preliminary stage this only needs to be provided at a high level and in summary form

LONG FORM REPORT

• Nature and scope of business
• Adequacy of accounting systems and internal controls
• Past record of forecasting of results and working capital requirements
• Appropriateness of accounting policies

SHORT FORM REPORT

• Financial Statements and Cash flow for 3 years
• Accountants to confirm that accounts are fair and reasonable

WORKING CAPITAL REPORT

• Statement is required in prospectus / admission document that company has sufficient working capital for the next 12/15 months
• Detailed review of monthly working capital requirements and compliance with relevant covenants together with sensitivity analysis

Not required at this preliminary stage

SHORT, MEDIUM, LONG TERM THE PROS/CONS OF DIFFERENT SCENARIOS Of AN IPO

Short Term (PROS) 18 Months

• Providing access to Capital for growth – Raise finance for further developments as Company grows
• Placing an objective market value on the Company’s business
• Increasing the Company’s ability to make acquisitions (Available Currency)
• Create a market for Company’s shares and broadening the shareholder base
• Encourage Employee commitment and incentivising their long term motivation e.g. share options
• Creating heightened public profile
• Always under promise and over deliver

Short Term (CONS)

• Dealing with increased disclosure and greater Regulatory obligations
• Additional costs associated with new audit fees, investor relations, NEDs, etc.

Medium Term 3-5 years

• Stable Management team pulling in the same direction
• Stay focused on Plan
• Maintain momentum – with shareholders following IPO
• Be transparent – To obtain the long term support of all shareholders
• Consistently meet the delivery or growth plan
• Do not become obsessed with share price

Change Board / Chair at what point and why?

Long Term 5 year +

Investors looking for:

• A committed and experienced management team
• Commitment to strong corporate governance procedures
• A viable Corporate Culture
• Sustainable Competitive position
• Growing business operating in an expanding market, locally and / or internationally
• Visibility and quality of earnings
• In summary: Quality, Good Governance and Value

HOW TO ENHANCE SHAREHOLDER / STOCK VALUE

• Once transformation into a Public Company is complete, it is just the beginning, and company then needs to meet the ongoing obligations of public markets
• Management needs to execute strategic initiatives and transactions
• Invest in good people and continue to evaluate the performance of the Board and management team
• Under promise and over deliver – Turnover, Profits, etc.
• Engage with investors effectively through a clear communication plan
• Manage Risk and Promoting good Corporate Governance , will add value
• Do not over-value the business. This is less important at IPO time.

WHAT ARE THE PITFALLS WHICH CAN RESULT IN A FAILED FLOTATION AND HOW TO AVOID THEM

• Management – Comply with rules, culture, etc
• Need to be sensible when valuing Company
• Investors will not invest in Companies where the Revenues or Assets are not substantiated
• Need a clear vision with credible management team committed for the long term
• Cannot raise all the funds needed
• Down turn in economy and stock market
• Fraudulent information
• Intellectual Property Rights – issues relating there too

FINANCIAL DUE DILIGENCE

The Business Plan prepared by the Company

• Detailed operational and strategic plan for the business
• Business development
• Detailed Budgets and forecasts

Long form report prepared – by the reporting accountants who records the results of the financial due diligence

• Nature and scope of business trends
• Adequacy of accounting systems
• Forecasting, working capital, accounting policies

Short Form Report

• 3 year Financial statements (Audited)

Working Capital Report – 18 Months

Legal including verification of, Material contracts, Underwriting Agreements

WHAT ARE THE CORPORATE GOVERNANCE, RISK MITIGATION?

RISK MITIGATIONS (who is responsible for reviewing Risk mitigation issues)

• Auditors
• Reporting Accountants
• Lawyers
• NOMAD (Nominated Advisors)

All above would assist in ensuring that the information is correct and ensure due care with risk mitigation

The end result being the admission document which is the responsibility of the NOMAD to the Stock Exchange, ensuring everything is correct and verified.

STRUCTURE AND REQUIREMENTS OF AN EFFECTIVE BOARD

Well functioning Board is led by the Chairman

CORPORATE GOVERNANCE FOR GROWING COMPANIES

WHAT ARE THE OBJECTIVES OF CORPORATE GOVERNANCE?

Corporate Governance is the system of processes, activities, standards and reporting to facilitate and deliver growth in long term shareholder value by reducing risk while maintaining a flexible, efficient and effective management framework within an entrepreneurial environment.

It represents a dynamic relationship between shareholders, the Company and the Directors, influenced by a number of external factors including regulation and social responsibility.

It reduces the risk of uncommercial and inappropriate bad decisions being made.

SUPERIOR STRATEGIES FOR BUSINESS GROWTH: QCA Code

THE PRINCIPLES OF THE QCA CODE

• Establish a strategy and business model which promotes long term value for shareholders
• Seek to understand and meet shareholder needs and expectations
• Take into account why the stakeholder and social responsibilities and their implications for long term success
• Embed effective risk management, considering both opportunities and threats throughout the organisation
• Maintain the board as a well functioning, balanced team led by the chair
• Ensure that between them, the directors have the necessary up-to-date experience, skills and capabilities
• Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
• Promote a corporate cultures that is based on ethical values and behaviours
• Maintain governance structures and processes that are fit for purpose and support good decision making by the board
• Communicate how the company is governed and is performing by maintaining a dialog with shareholders and other relevant stakeholders

1. WHAT ARE THE OBJECTIVES OF CORPORATE GOVERNANCE?

1. Corporate Governance is the system of processes, activities, standards and reporting to facilitate and deliver growth in long term shareholder value by reducing risk while maintaining a flexible, efficient and effective management framework within an entrepreneurial environment.
2. Corporate Governance represents a dynamic relationship between shareholders, the Company and its Directors, influenced by a number of external factors including regulation and social responsibility.
3. Good Corporate Governance should reduce the risk of uncommercial and inappropriate bad decisions being made.

2. Mandatory Corporate Governance

Mandatory Corporate Governance for larger Companies has been with us in the UK for some time now. The Cadbury guidelines were introduced in 1992 and have evolved and developed into the UK Corporate Governance Code which must be followed by all premium and listed Companies in London’s main market.

3. The corporate governance code

In terms of AIM Rule 26, the corporate governance code that an AIM Company applies, or if no code has been adopted, must be stated together with an explanation of what corporate governance arrangements that company has.

Aim Companies that do not adopt the code, normally adopt the “principles” based alternative known as the QCA guidelines, developed by the Quoted Company Alliance.

4. The challenge for many is that the QCA guidelines

Like the code, the QCA guidelines are an influence for everything that the growing Company should seek for itself, specifying good practice which should promote the development and growth which it naturally seeks. The challenge for many is that the QCA guidelines is less prescriptive in nature than the code, which therefore could present dilemmas of judgement for an inexperienced Board of Directors.

5. Corporate governance has five main underlying principles

For growing companies, corporate governance has five main underlying principles:

• LEADERSHIP
• EFFECTIVENESS
• ACCOUNTABILITY
• REMUNERATION
• RELATIONS WITH SHAREHOLDERS

6. Governance as a collective responsibility

Governance is the collective responsibility of the whole Board and the main accountability falling upon the Chairman. At its heart. Governance is about creating long term Company value, and reducing the risks that the Company faces. Corporate Governance is about making a better Company.

7. Ten operational principles in the QCA guidelines

There are ten operational principles in the QCA guidelines, which will enable Companies to deliver growth and long term shareholder value.

1. Establish a strategy and business model which promotes long term value for shareholders
2. Seek to understand and meet shareholder needs and expectations
3. Take into account why the stakeholder and social responsibilities and their implications for long term success
4. Embed effective risk management, considering both opportunities and threats throughout the organisation
5. Maintain the board as a well functioning, balanced team led by the chair.
6. Ensure that between them, the directors have the necessary up-to-date experience, skills and capabilities
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
8. Promote a corporate cultures that is based on ethical values and behaviours
9. Maintain governance structures and processes that are fit for purpose and support good decision making by the board
10. Communicate how the company is governed and is performing by maintaining a dialog with shareholders and other relevant stakeholders

8. ADOPTION

1. How the above principles are adopted depends on the size, sector, company culture, etc.
2. The terms of complying with the QCA guidelines, the notion of “COMPLY OR EXPLAIN” must be borne in mind. For example, there is an expectation that a well governed company has at least two Non-Executive Directors on the Board. If you have two NEDs then you have complied. If you have no NEDs then you need to EXPLAIN why this is the case, and what the plans of the company is to recruit appropriate and suitable candidates.
3. It is necessary to take each of the twelve guidelines and for the Board together to take the measures needed to comply, or explain non-compliance. Each guideline requires an action plan to ensure that all twelve principles will eventually be implemented.

9. CONCLUSION

If you are planning to list your company on a public market, you should be looking at implementing corporate governance straight away. Without introducing a corporate governance regime, you will not get a listing. Also, better governance equals a higher market value.

It should be clearly noted that in terms of the Companies Act, all Directors, Executive and Non-Executive Directors have a statutory duty to promote the success of the Company for the benefit of its members as a whole.

CHARACTERISTICS OF AN EFFECTIVE BOARD OF DIRECTORS WISHING TO DO AN IPO

• Well-functioning Boards of Directors are teams led by the Chairman.
• The Board of a public Company must be carefully selected and managed, taking into account group dynamics and the needs of the business.
• Succession planning is very important and a clear policy needs to be documented.
• A well refined Corporate strategy is most likely to be developed by a Board of Directors and delivered by an executive team, and encouraged by the Chairman, to work together for the benefit of all stakeholders.

CHAIRMAN ROLE

• The role of the Chairman has become much higher in profile and the expectations have increased as quite rightly, shareholders now expect an engaged, energetic, charismatic and involved Chairman who does more than simply manage the Corporate Governance process.
• The success of a Chairmanship undoubtedly hinges on the relationship the Chairman has with the CEO, a relationship which should be centered on honesty, trust and transparency. The success of the relationship is based on mutual understanding, by both parties of the distinction between their two roles.
• Effective Chairmen must have a good knowledge of the business to provide a constructive level of challenge to the CEO.
• Chairmen need to comprehend that they are not there to run the business. Their role is to support and guide. To ensure that the Business is well run but not to run the business.
• What ultimately defines a good Chairman is the ability to run an effective Board and to manage relationships with both shareholders and stakeholders.

CEO ROLE

• The role of the CEO is to run the day to day business of the Company.
• To communicate with the Chairman and the Board of Directors.
• To gain the confidence of the Board.
• To be responsible for ensuring that the Business Plan and Vision for the Company is achieved and that the business is well managed.

ARTICULATING STRATEGY OF THE COMPANY

• Each Director should be capable of articulating internally.
• The Company strategy and the manner in which it will be delivered.
• How the Corporate Governance structure facilitates decision making.
• Why the structure is appropriate for the Company.

BOARD EVALUATIONS

• The Chairman should work to maximise the effectiveness of each Board member for the benefit of the Company as a whole.
• Open and honest Board evaluation is an opportunity for the Board of Directors to improve its performance.

AN EFFECTIVE BOARD INFORMS AND ENGAGES WITH SHAREHOLDERS

• The Chairman must ensure that the Company has in place, effective lines of communications with all shareholders, institutional and individual.
• Communication must be dynamic, encouraging both discussion and feed back.

EFFECTIVE BOARDS HAS A BALANCE OF SKILLS

• The composition of the Board of Directors should demonstrate to its shareholders that it has the right mix of skills and experiences to deliver the strategy of the Company, for the benefit of the shareholders as a whole.

DIRECTORS INDEPENDENCE

• It may not be possible for SMEs to meet all the independence criteria.
• A Company should have at least two independent Non-Executive Directors and in a small Company, the Chairman may count as one of the independent Directors, provided he/she was independent at the time of his/her appointment.

INDEPENDENT AND MAJOR SHAREHOLDERS

• Directors who are or connected with a major shareholder is an issue of significant concern. Therefore, Boards including Directors associated with major shareholders should clearly explain to shareholders the reasons for them sitting on the Board.

COMPOSITION OF THE BOARD

A balanced Board of Directors of a listed Company would consist of:

• A Non-Executive Chairman
• Non-Executive Directors – usually two (one of whom may be the Chairman)
• Executive Directors
• Independent NEDs are important as they provide the appropriate oversight to deliver the strategy of the Company for the benefit of shareholders as a whole. Independence can be defined as independence of character and judgement, and being able to demonstrate this to shareholders in an objective manner.

The qualities required in my opinion:

• Good interpersonal skills
• Sound judgement
• Ability to influence
• Integrity
• The independence and conviction to say things that need saying when necessary

The NEDs usually chair and sit on the following committees

• Audit Committee
• Risk Committee
• Remuneration Committee
• Nominations Committee

CULTURE

The FRC recently came out with a report which looked at the increasing importance which Corporate culture plays in delivering long term business and economic success. The FRC believes that Company Boards:

• Should be connecting their purpose and strategy to culture
• Aligning values and incentives which support and encourage positive behaviours consistent with the Company’s purpose, values, strategy and business model
• Assessing, measuring and reporting on Company culture in annual financial statements.

Role Of The Non-Executive Director In Difficult Markets And Economic Uncertainty And What Keeps Him Awake At Night

1. My definition of a good Non-Executive Director is one that ensures that the business is well run but does not run the business.
2. Qualities which are needed to be a good NED:
   • Good interpersonal skills and ability to manage conflict
   • Sound judgment
   • The ability to influence through clear communication
   • Integrity
   • The conviction to say things that need saying and, as a last resort, to vote with your feet
   • To be commercially aware and to have board room experience!
3. Combined Code: The provisions of the Combined Code which sets out standards of good corporate governance, and the QCA Corporate Governance Guidelines, which assists in educating its members on best practice relating to NEDs – should be regarded as a benchmark for the standards required.
4. Other attributes and duties of a good NED:
   • The NED should be providing a helicopter view of the company and should not get entangled in the day-to-day operations.
   • He or she should be constantly challenging the MD and Executive Board by asking the apparently simple questions about the business.
   • Advise on strategy. A business without a strategy is a business without a direction or purpose.
5. In these difficult economic times and markets one reads of more fraudulent actions by companies and their executives and more hiding of price sensitive information etc.
6. For this reason NEDs should ensure more transparency with the executives, timely financial information and ensuring that internal control procedures are continually being reviewed.
7. Today, NEDs in the board room face an increasingly tough and challenging job.
8. New legislation under the Company’s Act has ratcheted up the threat of legal action. Activist shareholders are all too ready to put NEDs under fire. This has made the role of the NED even more crucial and onerous.
9. Also, the NED sits around the table on an equal footing and with the same legal obligations as those who run the company on a full time basis.
10. Therefore, in these difficult economic times the focus of the NEDs should be on the various risks facing the business.
11. There should be an emphasis on:
    • Internal controls
    • Cash management/receivables
    • Gearing of balance sheet
    • Ensuring bank covenants are not breached
    • Keeping customers and protecting markets
12. Non-financial risks should also be reviewed, e.g.:
    • Retaining key personnel
    • Litigation
    • Environmental
    • Health and Safety etc.
13. The NEDs should ensure that the Executive Team fully understands the issues of the day and that they are complying with the Board’s decisions at all times.
14. As they say you cannot beat experience and grey hair, as well as having the “scars and the T-shirt” and, hopefully, one can impart one’s experience of difficult times to the Management Teams.
15. You might know of Sir Digby Jones who was once head of the CBI. He was a Non-Executive Director of a company called I-Soft and was criticised years ago in the press. He said “We cannot be seen as Board Room policemen. NEDs can add value in so many ways but investigative policemen they are not”.
16. In my opinion there should be a balance of being a policeman – ensuring there is good corporate governance and adding commercial value to the enterprise.
17. However, no-one has yet come up with a better way of dealing with the fact that the owners of businesses – the shareholders – have to hand control over to professional managers. Therefore, if corporate governance fails, capitalism fails. We therefore need to make corporate governance work.
18. The Combined Code and Corporate Governance which sets out standards of good practice in relation to issues such as board composition, remuneration, accountability, relations with shareholders is seen in much of the world as the best model of corporate governance. The problem is not with the Code but the way it is applied.
19. Too often, people who should know better treat corporate governance as a matter of compliance with rules – but it is not. The banks that have run into trouble complied and got ticks in all the boxes – so what?
20. Good governance is a complex mix but in simple terms it is dependent on two main things-the first is Board Room behaviour – are the difficult questions being asked? Is there effective challenge or is there an over-dependence on the Management’s view?
21. The second, is making sure that the Board has a clear line of sight. If the Directors cannot see what is happening inside the business and are not getting good information, they will not know what questions to ask.
22. If the risk-management processes are not organised in a clear and methodical way then a handful of part-time non-executives do not stand much chance of overseeing them.
23. These two things, boardroom behaviour and connectedness to the organisation are inter-dependent. Therefore, there will be no real challenge for the Board Room unless the company makes it possible, which means that the Management needs to want it to happen.
24. In these difficult markets and economic times, I would like to share with you some of the concerns which keep me, as a Non-Executive Director, awake at night:
    • It is impossible for a NED to know everything about a company in an average of 26.5 days per year. The issue here is therefore how does one accelerate both industry and company knowledge?
    • As Chairman of the Audit Committee, the depth and detail of the Audit Committee Agenda and getting to grips with risk assessment is particularly challenging.
    • Geographic diversity and cultural differences in many companies gives one cause for concern.
    • Technology and security risks in today’s world is a worry.
    • Reputation risk – given that NEDs have to rely on others in the company and its control mechanisms, to keep matters under review, the fear of “what is not known” is an issue and a worry.
    • Legal proceedings against directors can result in reputational damage that can, in many cases, be irreparable. I always try to have a legal representative at Board level to advise all directors on issues as they arise.
25. There are many challenges therefore being a Non-Executive Director, especially in an economic downturn.

Although we should not be policemen, NEDs need to be more vigilant and clearly understand our fiduciary duties, and need to clearly identify major risks of the company on whose Board we serve.

Last Updated: March 04, 2026

The role of the Chairman has become much higher in profile than ever before. Stakeholders now expect an engaged, energetic, and involved Chairman who does far more than simply manage the corporate governance process. According to PwC’s 2025 Annual Corporate Directors Survey, 55% of directors believe at least one board colleague should be replaced — the highest proportion in the survey’s history — underscoring the growing demand for effective board leadership at the top.

The success of a Chairmanship undoubtedly hinges on the relationship the Chairman has with the chief executive, a relationship that should be centered on honesty, trust, and transparency. The success of this relationship is based on mutual understanding by both parties of the distinction between their two roles — the Chairman guides and oversees; the CEO executes and manages.

Good and effective Chairmen must have an extremely thorough knowledge of the business they are chairing. They must know enough to ask the right questions and must provide a constructive level of challenge to the chief executive. One of the main faults of chairmen deemed to be ineffective is their failure to comprehend that they are not there to run the business — their role is instead to support and guide. In simple terms, the job of the chairman is to ensure that the business is well run, not to run the business themselves.

There is, however, a fine line to walk between being too involved and being too remote. This means Chairmen should devote the appropriate level of time to their roles, which means visiting operations, talking with staff and customers, as well as investors and other key stakeholders.

The best Chairman is able to develop empathy with the business and engage with its people and issues. But there is no “one-size-fits-all” prescription for an effective Chairman. The right level of engagement will vary depending on the company’s stage in the business cycle, competitive environment, the experience of the chief executive, and — increasingly in 2025 — the complexity of challenges like digital transformation, cybersecurity risk, and evolving regulatory expectations.

What ultimately defines a good Chairman is the ability to run an effective board and to manage relationships with both shareholders and stakeholders.

10 Essential Qualities of a Good Chairman in 2026

• Charismatic personality
• Good communicator and listener
• Clear sense of direction
• Strategic view — The Big Picture
• Allows chief executives to get on with their job
• Good at governance
• Broad experience
• Business acumen
• Able to gain shareholders’ confidence
• Able to get to the key issues quickly

1. Charismatic Personality

A good chairman is someone who can easily inspire confidence and motivate people. They should have the ability to energize a boardroom and make directors, executives, and stakeholders believe in the company’s vision. This charisma extends beyond the board — a strong chairman can rally employees, reassure investors during turbulent times, and represent the company with credibility in public forums and investor meetings.

2. Good Communicator and Listener

A good chairman is first and foremost a good communicator — and an even better listener. They need to articulate the board’s vision and strategic priorities clearly, and they need to genuinely listen to the ideas, concerns, and feedback of directors, the CEO, management, and shareholders. Effective chairmen foster an environment where constructive dissent is welcomed and diverse viewpoints are heard before critical decisions are made. They should be open to challenge and willing to adapt their position based on the strength of the argument.

3. Clear Sense of Direction

A good chairman needs a clear sense of where the company should be heading. They should be able to set clear board priorities and governance objectives, ensuring that every board meeting is purposeful and focused on the issues that matter most. This means being disciplined about agendas, ensuring time is allocated to strategic discussion rather than just compliance updates, and keeping both the board and management aligned on the same long-term trajectory.

4. Strategic View — The Big Picture

A good chairman should be able to see the big picture — understanding how the company’s strategy fits within broader market trends, competitive dynamics, and macroeconomic forces. They should think strategically about the organization’s future, including emerging opportunities and threats, rather than getting drawn into operational details. In today’s business environment, this means understanding the impact of trends like AI adoption, geopolitical shifts, supply chain disruption, and changing consumer behavior on the company’s long-term position.

5. Allows Chief Executives to Get On With Their Job

A good chairman should not try to micro-manage the chief executive. They should allow the CEO to run the company and only step in when necessary — providing support, guidance, and constructive challenge, but not interfering with day-to-day operations. The chairman-CEO relationship is one of the most critical dynamics in any organization. CEO turnover remained elevated in 2025, and a notable number of departures were prompted by activist pressure. The best chairmen navigate this relationship by being a trusted sounding board for the CEO while holding them accountable for delivering results.

6. Good at Governance

A good chairman needs to be able to effectively govern the company. They should make decisions that are in the best interest of the company and its shareholders, be aware of relevant laws and regulations, and ensure full compliance. In 2025, governance expectations have expanded significantly. Boards must now oversee cybersecurity risk as a core governance priority — the SEC requires public companies to disclose material cybersecurity incidents within four business days and include cybersecurity governance details in annual reports. Effective chairmen also ensure robust board evaluation processes, successor planning, and alignment with evolving ESG frameworks and disclosure requirements.

7. Broad Experience

A good chairman should have a broad range of experience spanning business, finance, governance, and ideally, the specific industry the company operates in. They should be familiar with the different aspects of running a company — from financial reporting and risk management to talent strategy and digital transformation. Increasingly, boards also value chairmen with international experience, as global markets, cross-border regulations, and geopolitical factors play an ever-larger role in corporate strategy.

8. Business Acumen

A good chairman needs a strong understanding of business fundamentals. They should know how to evaluate growth opportunities, assess competitive positioning, and drive sustainable long-term growth. They should be able to spot risks and opportunities that others might miss, and make decisions that create lasting value for the company. This also means understanding the financial implications of strategic decisions and being able to constructively challenge management’s assumptions with data-driven reasoning.

9. Able to Gain Shareholders’ Confidence

A good chairman needs to be able to earn and maintain the confidence of shareholders. They should communicate the board’s vision, strategy, and governance practices transparently and answer difficult questions credibly. Regular, proactive engagement with major investors is essential — not just during AGMs, but through ongoing dialogue that demonstrates the board’s responsiveness to investor perspectives. As regulatory shifts continue to reshape the relationship between companies and shareholders, the chairman plays a critical role in navigating proxy season, responding to activist campaigns, and maintaining investor trust.

10. Able to Get to the Key Issues Quickly

A good chairman needs to quickly identify the most critical issues facing the company. They should be able to sift through complex information, cut through noise, and focus the board’s attention on the matters that require immediate action or strategic deliberation. This includes knowing when to convene the board on urgent matters — whether it’s a cybersecurity incident, an acquisition opportunity, a CEO succession issue, or a sudden market shift — and ensuring the board has the right information to make timely, well-informed decisions.

How Much Does a Chairman of the Board Earn?

Chairman compensation varies enormously depending on company size, whether the role is executive or non-executive, and whether the company is public or private. According to Spencer Stuart’s 2024 Director Compensation Snapshot, the average total compensation for S&P 500 independent directors is $327,092 — with independent board chairs receiving an additional premium ranging from $25,000 to $500,000 on top of that. Retainer levels for independent chairs at large-cap companies sit around $175,000, while small-cap independent chairs earn approximately $82,500.

For executive chairmen — those who also hold an active management role — compensation is significantly higher. Salary.com reports an average chairman salary of around $187,000, while Glassdoor puts it at approximately $269,000, with the 75th percentile reaching $366,000. Comparably reports an average of nearly $297,000. Private company boards compensate much more modestly — the median total compensation for a private company director was $40,000 in 2024, with the median chair premium at just $20,500.

The Role of the Chairman in an Initial Public Offering

The appointment of the right Chairman is key for a business wishing to IPO. The Chairman greatly enhances the prospects of a successful IPO by building an effective board and calling on their years of experience to ensure the story a company sells to the market is both compelling and credible. Investors and underwriters look closely at board composition and governance quality when evaluating IPO readiness — a strong, experienced chairman signals that the company takes governance seriously.

Further, it is the chairman’s task to set the tone at the top: to articulate what they want the organization to be, establish robust governance frameworks, ensure compliance readiness for public company reporting requirements, and make sure the business has the right corporate reputation in its community and among potential investors.

Modern Challenges Every Chairman Must Navigate in 2026

Beyond the foundational qualities listed above, today’s chairmen face a governance landscape that is more complex and demanding than ever. Key challenges include:

• Cybersecurity oversight: The SEC now requires public companies to disclose material cybersecurity incidents and report on board-level cybersecurity governance in annual reports. Chairmen must ensure the board receives regular briefings on cyber risk and that clear lines of accountability exist between the CISO, management, and the board.
• AI governance: As artificial intelligence reshapes industries, boards are under increasing pressure to provide oversight of AI strategy, responsible deployment, and associated risks. Effective chairmen ensure the board has sufficient technology literacy to ask the right questions.
• Board diversity and refreshment: Stakeholders and regulators expect boards to reflect diverse perspectives. Chairmen must lead ongoing board evaluation and refreshment to ensure the right mix of skills, experience, and backgrounds.
• ESG and sustainability: While political dynamics around ESG have shifted, particularly in the U.S., the underlying expectations from institutional investors and global regulators remain strong. Chairmen must help the board navigate these complexities thoughtfully.
• CEO succession planning: CEO turnover remained elevated in 2025, with a notable number of departures driven by activist investors. Forward-thinking chairmen maintain robust succession plans well before they’re needed.

Qualities of a Good Chairman: Conclusion

In conclusion, a chairman has done their job when the “vision for the business,” as set out and presented in the strategic plan to shareholders and stakeholders, has been achieved — and when the governance framework that enabled that achievement is robust, transparent, and fit for purpose.

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Managing the cultural gap with Chinese companies who want to do an IPO in London

I have been working with Chinese Companies for over 5 years and have been Associated with 3 Chinese companies as Chairman or NED that have listed in London (AIM).

With the globalisation of world business, China has become an appealing market for foreign investors. The problem of cross-cultural management arises as the cooperation between China and its culturally different Western partners continues to increase at an unprecedented rate.

The biggest barrier in doing business in the world market is managing cultural differences.  It ranks first in areas such as “law, price competition, information, language, delivery, foreign currency, time differences.  The spread of businesses onto the global stage brings the issue of national and regional differences to the fore – particularly in business –thus creating a number of management issues.

It is a big culture shock for Chinese business men and companies, who are considering coming to the UK to do business, perhaps to do an IPO, to later discover that they did not meet the transparency, legal, corporate governance and on-going obligations required to achieve becoming a listed company.

It can also be observed that most of the failures faced by cross-national companies are caused by neglect of cultural differences. The globalisation of the world economy, on one hand, has created tremendous opportunities for global collaboration among different countries; on the other hand, however, it has also created a unique set of problems and issues relating to the effective management of partnerships with different cultures.

Understanding the IPO process

Chinese business men in general do not fully understand the way business is done in the West including the IPO process.  Equally, the reverse applies; the people here also do not fully understand the Chinese culture or the way they do business. Here lies a dilemma.  Part of this cultural imbalance makes it important that Chinese companies have directors on their boards who speak English and know how business is conducted in the West.  These companies need to understand that they and their Directors will undergo examination and due diligence processes before an IPO can take place.  This due diligence process would include:

• Financial Position
• Business Plan and working capital requirements
• Legal Position
• Organisation Structure
• Directors in terms of suitability to be a Director of a listed company

The above would be examined and investigated by the Brokers / Nomads, Lawyers and Reporting Accountants.

China and the UK differ greatly with regard to their economic systems, political systems, social values, and laws, despite the substantial changes that have occurred in China during recent years.

It has been widely accepted that cultural differences greatly affect human thinking and behaviour and thus business organisations in which people interact on the basis of shared values. Management is embedded in a wider societal setting, and is heavily influenced by local historical and cultural norms. The significant differences between the UK and China seem to affect some aspects of their management practice.

Chinese Companies need to understand that a competent board of directors need to be set up with Executive and Independent Non-Executive Directors.  The concept of Non -Executive directors is not completely understood or appreciated and how they can add value to the progress and credibility of the company, including communicating with institutional investors.  By having experienced UK based English speaking Non-Executive Directors on their board with experience of working with Chinese companies, would greatly assist the Chinese directors with the IPO process and also assist post listing with regard to dealing with advisors, communication, listing rules and good Corporate Governance.

My personal experience is that generally one has to earn the respect and trust of Chinese colleagues on the board, and when there is mutual respect they will take the advice on running a listed company in the UK and comply with the rules, of Corporate Governance including risk management.

In the process of cooperation, we in the UK place greater importance on contractual safeguards than the Chinese. This is based on the belief that contracts can ensure that their partners’ tendencies to focus on individual goals and aspirations do not interfere with their own individual goals and aspirations. But the Chinese don’t consider contracts as seriously as we do. They think there will always be changes and the contracts can be reasonably modified according to changes. Instead, they tend to pay more attention to relationships than contracts.

To deal with a difficult or controversial request in the IPO process, indirect forms of influence are preferred by Chinese managers to avoid losing face and damaging guanxi.  When their Western partners propose to use direct and open ways to deal with the issues, they may feel embarrassed. On the other hand, Western partners may get totally confused by the roundabout way the Chinese use to solve seemingly simple problems.

In conclusion, it is very important for Chinese or other companies wishing to do an IPO to appreciate that the IPO is only the beginning and not the end of the process, in terms of success and capital growth for shareholders

About the Author: Frank Lewis has over 25 years of experience in both listed and private companies. He has held a number of board positions as Chairman, Non Executive Director, CEO and Finance Director, both in the UK and abroad with growing mid-market companies.

With a background in sophisticated and developing markets, he has the commercial prospective required to assist with growth strategies, acquisitions and flotations. View Frank’s short bio

What is the definition of a Non-Executive Director (“NED”)?

Michael Grade once famously said: “Non-Executive Directors are like bidets – not sure what they are there for, but they add a bit of class!” This is far from the truth.

NEDs are working harder than ever. The risk/reward is not what it should be. The Walker Report has made the job more onerous.

Many boards are not tolerant enough of challenge and if someone asks too many questions, they are branded as part of the “awkward squad”.

Lord Walker in a recent speech said: “The ability of NEDs to stand up to executive management is more important than the qualifications those directors hold.”

While there has been a whole lot of discussion about the need for NEDs with relevant experience, that knowledge is little more than useless if it is not accompanied by a willingness to challenge the executives.

With regard to the more practical aspects of being a NED of a SME company,

MY DEFINITION OF A GOOD NED IS ONE WHO ENSURES THAT THE BUSINESS IS WELL RUN BUT DOES NOT RUN THE BUSINESS

Qualities which are needed:

• Good interpersonal skills and ability to manage conflict
• Sound judgement
• The ability to influence through clear communication
• Integrity
• The conviction to say things that need saying and, as a last resort, vote with your feet
• To be commercially aware

Other key points that make effective Non-Executive Directors:

• NEDs should look at the company as a whole – “take a helicopter view”.
• NEDs should not get entangled in the day-to-day operations.
• CHALLENGE THE MD AND EXECUTIVE BOARD: By asking apparently simple questions about the business, the NED can greatly help an executive team to re-focus on the important rather than the urgent. Also to challenge commercial ideas such as “We have always done it that way”.
• PROVIDE KNOWLEDGE, INSIGHT AND EXPERIENCE: General business wisdom and experience gained from a variety of environments has huge value as business people often learn best from the experience of others.
• RAISING GOVERNANCE: A good NED should help to raise the standards of corporate governance within a company. This helps to ensure that executives understand their obligations in this respect and thus comply with the Code.
• ADVISE ON STRATEGY: A business without a strategy is a business without a sense of direction or purpose. NEDs can assist the executive team in articulating the strategy. Therefore, NEDs must have good interpersonal skills and sound judgement.
• CHALLENGE BUSINESS PLANS: Executives can often produce business plans where their goals are comfortable rather than stretching. NEDS can push, interrogate and raise the performance bar. They can also challenge where they believe ambitions are simply unrealistic. They provide a commercial reality check.
• MENTOR: One of the most important roles of a NED, especially for SMEs, is to act as a mentor to the executive board and coaching of directors in governance, people management etc.
• ACTING AS A SOUNDING BOARD: NEDs have an invaluable role to play when a company is considering decisions such as acquisitions and disposals of businesses.

The above roles do, of course, have to be read in the context of any NED’s statutory duty to promote the success of the company for the benefit of its members as a whole under the Companies Act 2006 – which he shares with his co-directors.

In addition, however, the NED can act as the impartial “honest broker”, helping to make well thought out decisions where the heart wants to rule the head in some cases!

The Walker Report noted that while a complete overhaul of the contents of the Combined Code was not required, there remained parts which needed further review. Accordingly, the Market’s view could be seen to be that the flexible “soft law” approach remained the most appropriate way of raising standards of corporate governance.

The UK Corporate Governance key changes to improve effectiveness are:

• The entire board of FTSE 350 companies should stand for annual re-election.
• There should be a balance of skills, experience and knowledge on the board.
• The chairman should hold regular development reviews with each director and there should be an external evaluation of the board of FTSE 350 companies at least every 3 years. (I am sure that this will apply to AIM and lower FTSE companies in the near future).
• The importance of the chairman and the NEDs in providing leadership and constructive debate respectively is brought to the forefront of the Code.

It is necessary to ensure that the board has a clear line of sight.

If the directors cannot see what is happening inside the business, and are thus not receiving the necessary information, they will not know what questions to ask.

Indeed, if the risk management processes are not organised in a clear and methodical way, then a small number of part-time executives do not stand much chance of over-seeing them.

These two variables – boardroom behaviour and connectedness to the organisation – are necessarily inter-dependent. Therefore, there will be no real challenge for the board room unless the company makes it possible, which means that the management needs to want it to happen.

I believe that this represents the vital points which have come out of the Walker Report in that executive management and the way they conduct themselves is central to how both the Code is applied and companies conduct themselves.

Further, discussion should be tough, testing and stretching, but conducted in an adult, grown-up way.

Challenge needs to be focused and informed, not aggressive or hostile.

The whole board needs to come together or it risks dysfunctionality. Having prima donnas is not helpful or constructive.

In these difficult economic times and markets one reads of more fraudulent actions by companies and their executives and more hiding of price-sensitive information etc.

For this reason, Non Executive Directors should ensure more transparency with the executives, timely financial information and ensuring that internal control procedures are continually being reviewed. Today, NEDs in the board room face an increasingly tough and challenging job. New legislation under the Companies Act has ratcheted up the threat of legal action. Activist shareholders are all too ready to put NEDs under fire. This has made the role of the NED even more crucial and onerous.

Also, the NED sits around the table on an equal footing and with the same legal obligations as those who run the company on a full-time basis.

Therefore, in these difficult economic times the focus of the Non-Executive Directors should be on the various risks facing the business.

There should be an emphasis on:

• internal controls
• cash management/receivables
• gearing of balance sheet
• ensuring bank covenants are not breached
• keeping customs and protecting markets

Non-financial risks should also be reviewed, e.g:

• retaining key personnel
• litigation
• environmental
• Health and Safety etc.

The NEDs should ensure that the executive team fully understands the issues of the day and that they are complying with the board’s decision at all times.

As they say, you cannot beat experience and grey hair – as well as having the “scars and the T-shirt”. Hopefully, however, one can seek to impart one’s experience of difficult times to the management teams.

You might know of Lord Digby Jones, who was once head of the CBI. He was a NED of a company called I-Soft and was criticised years ago in the Press. He said “we cannot be seen as board room policemen. Non Executive Directors can add value in so many ways but investigative policemen they are not”.

In my opinion there should be a balance of being a policeman – ensuring that there is good corporate governance and adding commercial value to the enterprise.

In these difficult markets and economic times, I would like to share with you some of the concerns which keep me, as a NED, awake at night:

It is impossible for a NED to know everything about a company in an average of 26.5 days per year. The issue here therefore is how does one accelerate both industry and company knowledge?

• As chairman of the audit committee, the depth and detail of the audit committee agenda and getting to grips with risk assessment is particularly challenging.
• Geographic diversity and cultural differences in many companies gives one cause for concern.
• Technology and security risks in today’s world are a worry.
• Reputation risk – given that Non-Executive Directors have to rely on others in the company and its control mechanisms, to keep matters under review, the fear of “what is not known” is an issue and a worry.
• Legal proceedings against directors can result in reputational damage that can, in many cases, be irreparable.

I always try to have a legal representative at board level to advise all directors on issues as they arise. There are, therefore, many challenges in being a NED, especially in an economic downturn.

Although NEDS should not be policemen, they need to be more vigilant and clearly understand their fiduciary duties and the requirement to clearly identify major risks to the company on whose board they serve.

The guiding principles for me with regard to corporate governance and the role of the NED for companies wishing to carry out an IPO both local and international companies are therefore:

• To ensure the ongoing implementation of corporate governance policies which have been put in place at the IPO.
• Non-Executive Directors should not be removed or replaced other than in exceptional circumstances within 12 months of an IPO.
• Any changes at any time to the NEDs should be approved by the NOMAD.
• The concept of the role and the relationship between the NED and company is one which is of great importance to me, the objective being to build and open a transparent relationship with the executive directors.
• Communication, therefore, plays a major role in attempting to achieve this objective, which is made more difficult due to cultural and language differences in dealing with international companies.

It is part of the learning process for executive directors of companies to understand their obligations and to build a sound relationship with their NEDs. Non-Executive Directors can also be of help with general business advice, mentoring and representing the company in the City. What I find works for me, for example, is that I speak with my companies at least weekly, get copied in on all relevant email correspondence, receive monthly management accounts, have monthly board meetings and ensure that accurate board minutes are produced when appropriate.

It is not enough to get company directors to sign that they understand their ongoing obligations.

I believe that the more one communicates, the better the chance one has to build a relationship of trust and transparency with the executive directors.

The Nomads should also play a major part in the education of the companies they are advising and bringing to the market.

I believe, therefore, that the guiding principles regarding the relationship of the company with their Non-Executive Directors are as follows:

• NEDs must be invited to attend all board meetings well in advance of the meeting and be provided with board papers.
• the executive directors of the company must be willing to engage in full dialogue with the NEDs and respond to their requests for information fully.
• prior to an IPO the entire board should attend a meeting with the company’s NOMAD and legal advisor to review the board’s overall responsibilities and duties include corporate governance.
• And, finally, the best advice I can give from my experience to overseas and local companies seeking to carry out an IPO is:
  • ensure that your company continues to be well-managed during the admission process as it will take up significant management resource;
  • meet your first year forecast – do not over-promise and under-deliver – failure to do so is likely to lead to a rapid deterioration in the company’s share price and inability to raise further equity in the markets, as well as impacting on the credibility of the company’s management with investors; and
  • appoint your NEDs as soon as possible in the IPO process in order for them to begin to build a trusting relationship with the executive directors. Please use their experience and expertise for the benefit of the company.

About the author: Frank Lewis has over 25 years of experience in both listed and private companies. He has held a number of board positions as Chairman, Non Executive Director, CEO and Finance Director, both in the UK and abroad with growing mid-market companies. With a background in sophisticated and developing markets, he has the commercial prospective required to assist with growth strategies, acquisitions and flotations.

View Frank’s short bio