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Boardroom bloopers

A boardroom full of smart directors and supervisory directors is no guarantee for smart decisions. The importance of communications is an underestimated and scarcely researched factor in this process. Board members run on routine and automatisms and often do not speak frankly. This can lead to costly mistakes.   Researcher Marilieke Engbers gave a glimpse into the research she is conducting for her doctoral dissertation in an article in the August 2017 edition of the MCA (Management Accounting & Control) trade journal. Her research focuses on the decision-making process in the boardroom. Engbers is the Programme Director of the new ‘Board Dynamics, leadership and communication’ executive programme at VU University Amsterdam.   She has been struck by the fact that research into boardroom decision-making has so far been focused primarily on tangible aspects such as governance, the composition of the board and the role of the chair. This is striking because, in her opinion, the quality of the decision-making is largely determined by the board members’ dynamics, behaviour and intercommunications. Engbers says this remains a black box for researchers.   The researcher notes that strategic and complex decisions must be made in the boardroom by a relatively large group of people. There is little time for an extensive exchange of information. The relationships among the board members also play a key role. Speakers decide themselves at the last second what they do or do not say. They also attune their remarks to the context in which they are operating.   Communicating in a group requires the willingness to take risks. You can place yourself or someone else in a vulnerable position by sharing information. The estimated risk is connected with the people on the team and the balance of power among the members (who has the formal and who has the informal power). This estimation can in turn be based on assumptions or speculations.   If supervisory directors do not have a shared vision of the objectives they are aiming to achieve, different supervisory directors may pursue different objectives. As a result there is insufficient time to examine each topic in depth and to tap into the existing diversity of knowledge and experience.   It is remarkable that the role of communications in decision-making processes has been paid so little attention. This is probably due in part to the fact that communications are wrongly associated with large groups and mass media. Communications are also often only deployed at the end of the decision-making process, so once the decision has already been made. This is odd considering that the effects of a decision depend to a large extent on the acceptance by stakeholders. Communications are crucial for the successful implementation of a decision.   One reason why communications are applied at such a late stage could be that the professionals in the field increasingly focus on the execution process rather than the content. Change processes are currently being completed at an ever-faster pace and are increasingly managed by super specialists. This is causing the gap between content and process in communications to become wider and wider.   This leads to tension in the communications and comes at the expense of the support for changes among internal and external stakeholders. The task of communications is to close that gap by focussing more on the content than the process and claiming a role at an earlier stage in the decision-making process. Also in the boardroom.

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Boardroom bloopers

A boardroom full of smart directors and supervisory directors is no guarantee for smart decisions. The importance of communications is an underestimated and scarcely researched factor in this process. Board members run on routine and automatisms and often do not speak frankly. This can lead to costly mistakes.   Researcher Marilieke Engbers gave a glimpse into the research she is conducting for her doctoral dissertation in an article in the August 2017 edition of the MCA (Management Accounting & Control) trade journal. Her research focuses on the decision-making process in the boardroom. Engbers is the Programme Director of the new ‘Board Dynamics, leadership and communication’ executive programme at VU University Amsterdam.   She has been struck by the fact that research into boardroom decision-making has so far been focused primarily on tangible aspects such as governance, the composition of the board and the role of the chair. This is striking because, in her opinion, the quality of the decision-making is largely determined by the board members’ dynamics, behaviour and intercommunications. Engbers says this remains a black box for researchers.   The researcher notes that strategic and complex decisions must be made in the boardroom by a relatively large group of people. There is little time for an extensive exchange of information. The relationships among the board members also play a key role. Speakers decide themselves at the last second what they do or do not say. They also attune their remarks to the context in which they are operating.   Communicating in a group requires the willingness to take risks. You can place yourself or someone else in a vulnerable position by sharing information. The estimated risk is connected with the people on the team and the balance of power among the members (who has the formal and who has the informal power). This estimation can in turn be based on assumptions or speculations.   If supervisory directors do not have a shared vision of the objectives they are aiming to achieve, different supervisory directors may pursue different objectives. As a result there is insufficient time to examine each topic in depth and to tap into the existing diversity of knowledge and experience.   It is remarkable that the role of communications in decision-making processes has been paid so little attention. This is probably due in part to the fact that communications are wrongly associated with large groups and mass media. Communications are also often only deployed at the end of the decision-making process, so once the decision has already been made. This is odd considering that the effects of a decision depend to a large extent on the acceptance by stakeholders. Communications are crucial for the successful implementation of a decision.   One reason why communications are applied at such a late stage could be that the professionals in the field increasingly focus on the execution process rather than the content. Change processes are currently being completed at an ever-faster pace and are increasingly managed by super specialists. This is causing the gap between content and process in communications to become wider and wider.   This leads to tension in the communications and comes at the expense of the support for changes among internal and external stakeholders. The task of communications is to close that gap by focussing more on the content than the process and claiming a role at an earlier stage in the decision-making process. Also in the boardroom.

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Aegon invests in Dynamic Credit

Dynamic Credit, the Amsterdam-based alternative fixed income asset manager and Aegon have reached an agreement on a strategic partnership. Aegon will become a 25% shareholder of Dynamic Credit. The investment will be used to accelerate the expansion into new lending products, such as buy-to-let and SME loans. Furthermore, Dynamic Credit’s innovative LoanClear platform will be further upgraded and extended into an investment hub for loans from marketplace lenders.   According to Tonko Gast, founder and CEO of Dynamic Credit, the partnership reflects the position and reputation that Dynamic Credit has established: “As a company we have been able to build a leading position in creating and managing loan portfolios. This creates a strong basis for further expansion into new markets and market segments.”   For almost 15 years Dynamic Credit’s technology has connected institutional investors to borrowers faster, simpler and at lower cost. The company is a fast growing, fully licensed, asset manager in alternative fixed income, with its own proprietary direct lending activities and by managing loans of others. Since its formation in 2003 in New York, Dynamic Credit has earned the commitment and trust of a broad range of institutional investors and banks, who invest in its products.   With Aegon as a new shareholder in the company, Dynamic Credit secures the backing of a global strategic partner with a solid international reputation and network as well as a strong track record in ventures and innovation.    

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Alteri Investors Buys Intertoys

Alteri Investors takes over toy retailer Intertoys from Blokker Holding. The acquisition fits well with Alteri which is a specialist investor in the European retail sector. Alteri will use her extensive experience in transforming and renovating retail companies to focus on further expanding and strengthening Intertoys' position as a leading toy chain.   CEO Gavin George of Alteri calls it a great privilege to add Intertoys to the portfolio. ‘We look forward to partnering with the Intertoys colleagues and its franchisees to leverage its strong position in the specialist toy sector and further transform Intertoys into an omnichannel retail business, which is the best way to safeguard the health of the company.’   Intertoys operates around 500 stores in the Netherlands, Belgium, Germany and Luxembourg and has more than 4,000 employees. Alteri and Blokker expect to complete the acquisition before the end of November. Intertoys will be well capitalised on completion of the deal and able to leverage the Alteri industry insights, experts and network.

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We share our expertise with our partners within AMO, an international network of agencies that hold leading positions in their home markets.

Court as oasis of calm

The management of a company is responsible for the strategy and is not obligated to engage in substantive talks with a serious bidder. This clear and equally consistent ruling of the Enterprise Section of the Amsterdam Court of Appeal brought an end to the discussion between the management and shareholders of AkzoNobel concerning the bid from PPG. The court once again proved to be a highly effective oasis of calm when emotions start running high.   The unsolicited bid from PPG for AkzoNobel has caused quite a stir in the Dutch corporate community. It has evoked reactions ranging from barbarians at the gate and panic in the polder to calls for new rules against the undesired sell-off of the Dutch business community. Experts and politicians have fallen over each other to come up with solutions to this pressing problem. Some of these are genuinely independent recommendations and others are presumably paid third-party endorsements. In short: these are confusing times.   At least one seasoned expert kept his cool amid the tumult: Huub Willems, former Chair of the Enterprise Chamber of the Amsterdam Court of Appeal. He expressed his misgivings in het Financieele Dagblad: ‘There is an assessment framework in place and everyone knows how it works. And that assessment framework is characterised by legal nuance and prevents shooting from the hip.’   Acquisitions take place in a private law atmosphere and Willems believes it should stay that way. ‘It would be extremely worrying if the government or a governmental body, for example the Netherlands Authority Financial Markets, were to start assessing the private business community in its entirety, as is the case in a state-controlled economy. I absolutely do not understand why, of all people, members of the business community seek these kinds of solutions.’   Acquisition processes are emotional rollercoasters. Board members feel their authority and position is under attack, employees are afraid of losing their jobs, trade unions are fearful for their members and shareholders want to see returns. One misplaced comment can spark upheaval. And that happens to be Anthony Burgmans’ trademark specialty. An unprecedentedly large number of big investors sided with Elliot in the case at the Enterprise Section of the Amsterdam Court of Appeal.   While the court crushed the shareholders’ demand to call a meeting with the only aim being to force Burgmans’ resignation also sent a clear message to the management of AkzoNobel: it cannot ignore shareholders’ incomprehension of its rejection of the bid. The Enterprise Chamber of the Amsterdam Court of Appeal is of the opinion that a continuing lack of confidence among a substantial proportion of the shareholders is damaging to the company and all its stakeholders. But they do not yet think it is their place to force AkzoNobel to provide a detailed explanation, but it must be provided nonetheless.   The Dutch system has worked and restored calm for the short term. But there is a greater danger looming in the longer term: international investors could start seeing the Netherlands as a place where shareholders have very little say when push comes to shove. The underlying nuance of the court’s message will not have escaped them.   It is up to the directors of Dutch companies to eliminate this potential resistance among investors through better communications and clear messages. The way in which the supervisory directors of AkzoNobel, ASM International, PostNL and TMG have recently done this can serve as an example of how not to do it.

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Court as oasis of calm

The management of a company is responsible for the strategy and is not obligated to engage in substantive talks with a serious bidder. This clear and equally consistent ruling of the Enterprise Section of the Amsterdam Court of Appeal brought an end to the discussion between the management and shareholders of AkzoNobel concerning the bid from PPG. The court once again proved to be a highly effective oasis of calm when emotions start running high.   The unsolicited bid from PPG for AkzoNobel has caused quite a stir in the Dutch corporate community. It has evoked reactions ranging from barbarians at the gate and panic in the polder to calls for new rules against the undesired sell-off of the Dutch business community. Experts and politicians have fallen over each other to come up with solutions to this pressing problem. Some of these are genuinely independent recommendations and others are presumably paid third-party endorsements. In short: these are confusing times.   At least one seasoned expert kept his cool amid the tumult: Huub Willems, former Chair of the Enterprise Chamber of the Amsterdam Court of Appeal. He expressed his misgivings in het Financieele Dagblad: ‘There is an assessment framework in place and everyone knows how it works. And that assessment framework is characterised by legal nuance and prevents shooting from the hip.’   Acquisitions take place in a private law atmosphere and Willems believes it should stay that way. ‘It would be extremely worrying if the government or a governmental body, for example the Netherlands Authority Financial Markets, were to start assessing the private business community in its entirety, as is the case in a state-controlled economy. I absolutely do not understand why, of all people, members of the business community seek these kinds of solutions.’   Acquisition processes are emotional rollercoasters. Board members feel their authority and position is under attack, employees are afraid of losing their jobs, trade unions are fearful for their members and shareholders want to see returns. One misplaced comment can spark upheaval. And that happens to be Anthony Burgmans’ trademark specialty. An unprecedentedly large number of big investors sided with Elliot in the case at the Enterprise Section of the Amsterdam Court of Appeal.   While the court crushed the shareholders’ demand to call a meeting with the only aim being to force Burgmans’ resignation also sent a clear message to the management of AkzoNobel: it cannot ignore shareholders’ incomprehension of its rejection of the bid. The Enterprise Chamber of the Amsterdam Court of Appeal is of the opinion that a continuing lack of confidence among a substantial proportion of the shareholders is damaging to the company and all its stakeholders. But they do not yet think it is their place to force AkzoNobel to provide a detailed explanation, but it must be provided nonetheless.   The Dutch system has worked and restored calm for the short term. But there is a greater danger looming in the longer term: international investors could start seeing the Netherlands as a place where shareholders have very little say when push comes to shove. The underlying nuance of the court’s message will not have escaped them.   It is up to the directors of Dutch companies to eliminate this potential resistance among investors through better communications and clear messages. The way in which the supervisory directors of AkzoNobel, ASM International, PostNL and TMG have recently done this can serve as an example of how not to do it.

Read more...