Active ownership

A reliable business partner
The business is operated through and in cooperation with the managements
of the individual portfolio companies.

For Schouw & Co., having ownership in a company implies active involvement. The company’s Board of Directors is appointed so that, as a main rule, it has representatives from both the Executive Management and the Board of Directors of Schouw & Co. as well as external members who have specific knowledge about the company’s industry, sales channels, customers or similar aspects. »That way, we are sure to have a profound commitment and involvement as well as great expertise on our boards capable of both challenging and supporting the management,« explains Schouw & Co.’s
President Jens Bjerg Sørensen.

Schouw & Co. not only becomes involved in its portfolio companies at board level. Our businesses never develop major projects on their own, only to make a presentation of it to the owners at a board meeting. That would make it much too late to provide a meaningful contribution to the process. »It is important to support both the strategic and financial foundation, for the management to feel comfortable with the decision-making processes,« adds Jens Bjerg Sørensen.

That is why, as a general rule, the managements of the portfolio companies are in touch with the Executive Management of Schouw & Co. once a week. »We act as a sounding board for our businesses in a large number of areas. We are deeply involved in the strategy work, we challenge the financial reporting and we often meet with the companies’ major customers. In addition, we are always heavily involved when a company makes an acquisition or a divestment. These close working relations mean that we
know both what the challenges are for our businesses and what their potentials are,« explains Jens Bjerg Sørensen.

Schouw & Co. does not delve into details, however. »One of our strongest abilities as an active owner is the fact that we give our managers the full responsibility for running their businesses. We know a lot about our businesses, because that is the only way we can stay abreast of developments. However, there is no doubt that it’s the managements
of our companies who know their businesses best and, consequently, they have the full daytoday responsibility.«

»We don’t see ourselves in the ‘big brother’-role for our businesses. By Danish standards, we own some relatively large companies. They must all have a management capable of playing with the very best in the industry, and we should not expect to attract the right people if we are not prepared to let them manage the business they are in charge of.«

Active ownership also involves capacity for action and being prepared for a risktaking approach. We have several examples of companies we have taken over, where the company needed new ownership and fresh resources in order to move on.

»When we acquired Fibertex, we gave our support to the development plan that the management preferred to see implemented. It involved a good strategic opportunity to establish production in Asia, but it also entailed risk to quite some extent. A factory had to be built from scratch and a business
had to be run in a foreign cultural setting very different from our own. We were able to act as a strategic sounding board and provide the financial support, so we joined forces with Fibertex and chose to go to Asia.«

Over the years, we have invested more than DKK 1 billion to expand output capacity in Asia and Europe. Today, Fibertex has two production lines in Malaysia, and the company has nearly tripled its size compared to when Schouw & Co. took an ownership interest in 2002.