Sponsor-executive partnerships are critical to driving maximum value in the private equity-backed environment. Conflicting information can derail this partnership, eroding value in the process. When mixed signals or clashing priorities emerge from the fund, there’s one resource that can prove invaluable: the outside board director (OBD).
Savvy executives leverage their OBDs to arbitrate rifts and solve miscommunications. Discover what makes OBDs effective resources and how to best partner with them to protect critical alignment before conflicts grow.
Outside Board Directors: Your First Line of Defense Against Misalignment
Miscommunication and conflicting information are all too common in the sponsor-executive dynamic. In a recent PE-CXO survey, nearly 9 out of 10 executives reported a material disconnect between the fund-level deal team and the Operating Partners (OPs) who work with them day to day, indicating widespread and persistent friction.
“70.4% of executives say they perceive at least some level of disconnect between operating partners and deal teams; another 18.5% said those disconnects were significant.”
— PE-CXO Pulse Survey
When two voices from the firm give conflicting direction, strategy and execution can suffer. The biggest mistake leaders make is letting those contradictions linger. OBDs can serve as an early warning system and a critical lifeline for restoring alignment before problems escalate.
“In one situation, we had two different partners assigned to our portfolio company. At the time, the organization was underper...