What kind of governance is required by an investment fund ?

The question of governance arises when an investment fund invests in a company.
Investors are not involved in the day-to-day running of the company. Nevertheless, outside formal meetings, managers are often called upon to discuss a range of issues with investors (business contacts, international approach, recruitment, etc.), for which investors can contribute their experience and advice.

Investors are almost always members of the company’s Supervisory Board or Board of Directors (full or non-voting members).

These Boards, which meet periodically (from once a month to once a quarter), give their opinions on issues such as :

• Assets disposals
• Financial commitments (loans, etc.) beyond a fixed amount
• Company budget
• Hiring above a certain salary
• Executive salary setting
• Capital increase decision
• Initial Public Offering
  …

WHAT TO REMEMBER?

With the entry of investors into your capital, you will still be at the head of your company, and you will still be the manager, but you will have a duty to provide information and, for certain important and binding decisions, the need to obtain a positive opinion from investors.