Neville Davis knows what his happy place looks like: four chairmanships of private equity-run businesses, plus one non-executive directorship of a listed company, to keep his hand in. “That’s what I like the best, as it gives me the right balance,” says Davis. This was the shape of the chairman’s portfolio when we met on the last day of June, but since then, a vacancy has appeared: Davis has stepped down as chairman of Fourth, as part of its ownership change.
But on the scorching hot day of our meeting, his chairmanships are as follows: Fourth (hospitality tech), SecureData (cybersecurity managed services), Clifford Thames (automotive tech), Key Travel (a non-tech business), plus a non-exec directorship of Kalibrate (petroleum tech). We’re enjoying the view of East London from Broadgate Tower, where Davis has secured a meeting room following his previous appointment with financial services group William Blair. That’s about as much as I can say about what he’s been up to today, as Davis takes the confidentiality of his charges very seriously.
Having said that, Davis is very open when it comes to sharing his opinions about the role of chairmanship, if a little reluctant to provide examples from his companies. It’s a bit like naming a favourite child: “I enjoy all the businesses I’m involved in, so I wouldn’t like to single any of them out!” We agree to discuss Fourth, as it’s timely: ECI has just exited to Insight Ventures. “It’s a fantastic business. It’s a pure play Software-as-a-Service, has been from the outset. […] I’m really positive about where the business is, what’s been achieved, and what it will achieve,” says Davis. “The new investor is very supportive and dynamic, which is a great outcome for the business. That’s one of my core beliefs: everything flows from the business being successful.”
The PE advantage
This success also means Davis will be in the market for a new mandate, probably another PE-backed company. So why this preference? “From my perspective, the balance of work between governance and added value, if I can use that phrase, is much more attractive in a PE-run business. The amount of focus on governance is much less, and I like that.” This goes to how Davis views his role as a chairman: “For me, I enjoy the added-value component of being chairman more than the governance. Of course, governance is important! But in a quoted company, you will spend a greater proportion of your time and efforts on governance, and it’s not what I really enjoy.”
Another reason for the PE preference is that Davis likes working with companies with an EBITDA of £4-10 million, a scale he thinks is well suited for private ownership. “What’s attractive about PE is a unanimity of focus on making the business successful. You have a very straightforward relationship with your shareholder, and they’ll typically sit around the boardroom table with you. Everybody is largely invested in making the business successful in a straightforward, simple way.”
As Davis’ most recent appointment, Key Travel, isn’t a tech company, there’s clearly no sector bias. But there are some rules: “My background is B2B and I have little experience in B2C. I wouldn’t get involved in retail or banking, or something that’s a long way from what I’ve done. But to understand a different sector, like travel, doesn’t really take that much time, because you already have the core basics of what business is about,” says Davis. “Management is management, and people are people. The dynamics of human beings don’t differ much.” So Davis focuses on finding good people to work with, not to mention how it’s always fun to be in a dynamic market. “I look for roles I’ll find interesting. Take Key Travel: it’s an interesting business with an ambitious and strong management team, lots of potential. [Then there’s] the fact that it was slightly leftfield of my main area of activity – that made it particularly interesting for me.”
We talk for a bit about how Key Travel may not be a tech company but it has many technology elements, similarly to how sector lines blur for Fourth, whose technology is fully mobile-enabled. Speaking of technology integration, is that an Apple Watch on Davis’ wrist? Yes it is! Davis leans forward to show me. “It’s fun, I have to admit. My wife got it for me, for my birthday.” He demonstrates some of the features. “When I first got it I wasn’t sure about it. But since I’ve had it, I haven’t had it off!” Davis laughs, but the Apple Watch is a testament to a device refined, and turned into something that grabs you.
The Compel variations
Davis (60) and his wife Karen live in Hertfordshire, outside Royston. They have two daughters, a chartered accountant and a doctor, and a son who’s doing his A-levels. “Throughout my life, my family has been the most important thing to me. So when I haven’t been at work, it’s been mostly about family.” He likes playing sports though: a bit of tennis and skiing – although he’s quick to add that’s he’s not very good. The family goes on trips together, most recently to Europe to ski. He loves going to see plays too, especially at the National Theatre in London – it will always be brilliantly acted and presented.
Originally from Sunderland, Davis went to grammar school in the north-east before moving to Canterbury to study at the University of Kent. He’s a chartered accountant by profession: “I learned with one of the big London firms. But I never wanted to be an accountant, I wanted to be a businessman.” Davis joined the company which later became Compel in 1980, taking over as CEO three years later. “Yes, I’ve had a most incredibly boring executive career!” He’s joking, because his 27 years at Compel brought no shortage of action. The long tenure was a happy accident though, says Davis, initially brought about by the fact that the company served real coffee at the interview: “It was a big factor!” He laughs, but in 1980, having proper coffee marked the company as a modern, dynamic business.
Another reason why Davis chose the company was that he wanted to join a smaller business in a more senior role, rather than the other way around. First entering as the company accountant, he soon moved up to CFO. “Then an opportunity arose to become CEO. And I said, ‘Please, can I have a go at running the business?’” Really? That must surely be a very modest recollection of what happened? Davis relents, sort of: “Well, I said, ‘I think I can do this.’ And they gave me a go. It was tremendous! The business turned around and became very successful.” Davis took the company from £5m revenue to a peak of £300m, and led the 1987 management buyout and the 1994 IPO. He eventually left Compel in 2007, when it was acquired by 2e2. “The business changed a lot. Every point where I could have done something different, I thought, ‘What would be more fun than this? What would be more stimulating and satisfying?’ And so, I stayed.”
The chairman as chameleon
When it comes to learning how to be a chairman there’s no set route, says Davis, but in order to be successful, you need to have been a CEO. “But the job of a chairman is fundamentally different from that of a CEO! The transition from CEO to chairman is one of the biggest you can make in a career,” says Davis, adding how it’s probably bigger than the move from being a CFO. Davis’ first chairmanship was industrial equipment auctioneers GoIndustry DoveBird – an enjoyable learning experience, he says, although he admits he might not have chosen the role today. “But when you begin being a chairman, as is so often the case in business, you need to get some experience! So actually, I probably still would have taken the GoIndustry job, because it got me that chairman experience,” says Davis. “I now have an extremely clear view of what the role of the chairman is, which, frankly, I didn’t really have when I started out.”
Now he knows the chairman’s job is to help and support the CEO and the board make the company successful: “The relationship between the CEO and chairman is critically important. The CEO’s role typically lonely, and very demanding. A decent chairman could help you in a million ways: a shoulder to lean on or cry on, a mentor, somebody who stimulates you, somebody to talk to.” And make no mistake: that means being the kind of chairman each individual CEO needs: “So if the CEO wants to talk to you about something which is pretty trivial in the broad scheme of things, your job to be there. Of course, in the majority of cases, the CEO is talking about important things. But sometimes there’s something aggravating within the business, and who else is he or she going to talk to about that?” Davis shrugs. ‘The chairman needs to be a chameleon, and adjust to the needs of each business.”
I ask Davis if he misses being CEO and he thinks for a while – not because he’s unsure, but because he loved being a CEO, and the answer is still no. “The nature of the chairmanship means you mustn’t want to do what the CEO does. Otherwise you’ll be a really lousy chairman! […] You need to have got to a point in your life where you have done enough of that, when you are fulfilled and satisfied and you want to do something different.” He thinks about it some more. “I spent my entire executive career in one business and now, I have this wonderful plural existence. That’s partly why I enjoy it so much: because I am involved in lots of different businesses.”