Build Awareness and Skills for Better Organizational Performance
Advocates of the private-equity model have long argued that the better private equity firms perform better than public companies do. This advantage, these advocates say, stems not only from financial engineering but also from stronger operational performance. Directors who have served on the boards of both public and private companies agree—and add that the behavior of the board is one key element in driving superior operational performance. Among the twenty chairmen or CEOs we recently interviewed as part of a study in the United Kingdom, most said that private equity boards were significantly more effective than were those of their public counterparts. The results are not comprehensive, nor do they fully reflect the wide diversity of public- and private-company boards.
Clearly, public boards cannot (and should not) seek to replicate all elements of the private equity model: the public-company one offers superior access to capital and liquidity but in return requires a more extensive and transparent approach to governance and a more explicit balancing of stakeholder interests.
Taking Control of Organizational Risk Culture
Public boards earned their best scores in governance and risk management, a result that reflected the drive to improve governance standards and controls in the wake of the various scandals that led to the Sarbanes–Oxley legislation and the initiatives suggested in the Higgs Report. The typical board subcommittees (audit, nomination, remuneration, and corporate social responsibility) are seen as conducting a thorough, professional scrutiny of the agreed-upon areas of focus, while the overall board supervises effectively and can draw on a broad range of insights and experiences to identify potential risks.
We take a comprehensive approach when helping MoDs and DoDs evaluate budgets and reduce spending in an era of defense austerity. In conducting audits of defense budgets or individual programs, we assess all segments of spend, from administrative and external services to personnel, procurement, maintenance and operations. We collaborate with clients to redesign key processes such as recruiting and training so they can align personnel and assets to better support defense strategies and priorities.
Our audits deliver substantial results: A recent audit for a MoD resulted in a fifty percent reduction in the operating costs per flying hour for an advanced aircraft system, while another MoD captured nearly two- billion in savings as a result of a total budget review. Beyond conducting audits, we build our clients’ capability to analyze and prioritize future spend, allowing them to respond quickly to new priorities.
We support owners planning mega projects by developing business cases aligned with their long-term strategic objectives, by ensuring rapid and effective decision making through our proprietary tools, and by performing key analyses to monitor the progress, economics, and risk associated with projects. more