Experience at WeWork suggests that it missed a few prep steps before its IPO – an important one being getting its corporate governance in order.
During 2019, about 159 IPOs were priced at $50 million or more in the US (compared to 192 in 2018). Most of these companies listed on NYSE or Nasdaq. Whichever exchange they listed on, the companies needed to adhere to minimum listing standards. In addition, they had to comply with SEC and other standards. But it seems that even compliance with those standards did not keep some of those newly public companies from going off the governance rails.
Setting up the mechanics, the processes, and the culture to be a successful public company requires a great deal of planning — leading to alignment on values, policies, and processes. Building those requires that the company’s leaders be advised by and listen to experienced governance professionals. Experienced governance professionals can also help in other ways. Helping to determine the checks and balances needed to mitigate risk and promote desired behaviors. Building a diverse board. Building an annual board and committee calendar that ensures the board identifies and addresses all required and relevant agenda topics. Ensuring that meeting agenda focus on the things that must be addressed and those that will matter over the long-term. Fostering candid board discussion and effective board decision-making.
Do not overlook how technology can help the IPO preparation, transition to public company compliance and long-term success. FORESIGHT® is an enormous aid to the law firm or in-house personnel putting in place the mechanics. It provides the framework and the governance confidence needed to get the organization and the board ready for the IPO. And, it will help keep the company on track with governance after the IPO.
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