CVCA Academy Management Series – Corporate Governance of Portfolio Companies

中文

CVCA conducted a training course titled Corporate Governance of Portfolio Companies on May 22 in Beijing. Around 30 CVCA members and professionals from non-member companies participated in the training.

With numerous cases, Mark Wu, Partner of Deloitte Consulting, presented how to enhance the corporate governance of portfolio companies to balance the relationship between investors and portfolio companies, as well as how to facilitate the companies with building up stronger management team to achieve win-win goal in practice. He demonstrated the leading practice of value-added services, along with other cases of conflicts between investors and companies. In addition, Mark summarized the main characteristics of excellent management, and expounded the methods to help portfolio companies to complete the management promotion and incentive system. He concluded that with the aim of adding value more than capital to the portfolio companies, investors' role will be changed from an outsider to a family member of portfolio companies during the process.

In the dialogue session afterwards, Raymond Chen, Director of Legend Capital, introduced the value-added service framework and principles of Legend Capital, and shared his experience with the audience from the perspective of investors. Raymond and Mark discussed issues on the cost control of value-added services, the judging criteria of portfolio companies' management, and the impact of incentive system to the long-term growth of the companies, etc. They both deem the critical incident method of performance appraisal as the key when it comes to the judging criteria of the management. Raymond stated that investors will be acquiring in-depth understanding about the businesses and industries while providing the value-added services. The services will be enhanced with more practical experience accumulated. Joyce Wang, Associate Director of Deloitte Consulting, moderated the dialogue.

The training course ended with a Q & A session. Questions were raised on how to align the interests of investors with those of companies, how to cope with the conflicts between investors and companies on the business operational decisions, and etc.