Profile: Clyde Blowers’ partner Shauna Powell
The Drawdown catches up with Clyde Blowers’ partner Shauna Powell, who takes care of all legal matters at the GP, to explore the ever-growing importance of having this kind of oversight within the partnership.
The Drawdown: It’s fairly rare for legal and operational heads to be partners – what are the advantages of being in the partnership in terms of overseeing the firm’s legal activities?
Shauna Powell: From the partnership perspective there is a good balance; we have the engineering and operational expertise, as well as the financial backgrounds, so to complement and add value to that set of skills and expertise it was thought beneficial to have someone with legal and compliance knowledge as a partner to ensure a well-balanced partnership. Unlike the perception of some, our firm sees (the right) lawyer as someone to help achieve solutions to issues and not just part of a “business prevention” team. Why would you therefore not have a lawyer as a partner of the firm if they can add value?
The approach our firm takes is also not to put people in silos – so whilst I am lawyer whose primary responsibility is to look at the legal matters, I am however a partner equal with the other partners in the firm.
I think my promotion to partner back in 2011 was also very encouraging to see from a gender balance perspective. I think it’s vital in what has traditionally been a very male dominated sector to see women in senior positions.
TDD: You also sit on the Fund Leadership Team and the Investment Committee – what are the benefits of having in-house legal expertise on those teams?
SP: More and more firms are acknowledging that legal and compliance issues are important and can go to the value of investments and ultimately investor return; especially given the regulatory change over the past decade. These key issues need to be discussed and taken account of at the investment stage so it’s important to have someone on the committee that can assess them.
TDD: As private equity faces more regulation, how are you managing the newer rules coming into force?
SP: We’re getting support with managing new regulation through external advisors who help us navigate the landscape.
It’s key for us to use these advisors not only to understand the regulations themselves, but to also gain an understanding of what best practice is and how our peers are dealing with the issues.
TDD: Are there any regulations causing particular issues or difficulties at the moment?
SP: The hot topic has clearly been GDPR – that has impacted the entire business; the GP and portfolio companies.
And mid next year SM&CR will come into force, which will present another big change for us as a GP.
Because of the close interaction we have with our portfolio companies, we’re also more involved than perhaps other GPs on things like export control. Again, this is something we will work with external advisors and consultants on. In particular we have worked very closely with US and European law firms regarding the situation with Iran and the US Sanctions and what it means for our portfolio companies.
Looking ahead to Brexit, we still don’t know what it will mean, especially in terms of marketing and passporting funds. As with most areas on this topic, there is still so much uncertainty when it comes to regulation.
TDD: Are there any rules on the horizon you are worried about?
SP: A concern for us is marketing funds in Europe post Brexit – we’re not worried, we just need clarity on the future. A large number or our LPs are based in mainland Europe. As a GP based in Scotland, we’re on a level playing field with the rest of the industry so we need a framework that will allow that to continue.
I think with all new regulation, there is always that initial worry or concern as to how are we going to manage this ever increasing volume of regulation – particularly where the regulations seem to be disproportionate for our industry – but our experience to date has been there is usually a manageable and practical solution to ensure you are complaint.
TDD: Given CBC’s focus on industrials, what are the main legal concerns in the sector?
SP: Contracting practices and contract management is a key focus for us to ensure our businesses are not taking on unpalatable risks.
IPR protection is also key. An important factor in our value creation is investing in companies that supply highly engineered mission critical goods, so it’s vital to protect the IP aspect.
Due to where our businesses operate, a key focus for us has also been on anti-bribery and corruption policies and procedures. It’s positive to see that this is now understood and embraced in higher risk territories.
TDD: Do you use any software or tech to help with compliance?
SP: Yes, technology software has been fundamental in assisting us with compliance issues. For our portfolio companies, in dealing with export compliance we use WeComply software. We also use Dow Jones’s anti-bribery and corruption software.
For compliance training we use a product developed by law firm Pinsent Masons – Cerico Solutions – which has been acquired by Dow Jones. We’re proud to say we were one of the first adopters of this technology as we have portfolio companies operating in all jurisdictions, so it’s very important to have tech support in training so we can roll this out globally. Face to face training is obviously preferred but it’s not always practical. Also the translation services are vital, especially in places such as China where we need portfolio companies to be compliant.
We’re currently reviewing another product, also developed by a law firm, to support the management of contracts. Many of our portfolio companies enter into contracts which may span many months; a product which allows us to manage key milestone dates etc could be really beneficial. Of course, like any system it’s dependent on the correct information being input, but once there it is intuitive and reduces human error.
TDD: When you joined CBC you initially focused on transactions, and now you have responsibilities for all legal activities – how did you develop your skill set since joining?
SP: I joined in 2006 from a transactional background. When I came in I had an awareness of compliance but not a huge amount of experience – especially from a fund perspective.
It has been a steep but very interesting learning curve. I’ve had lots of help, including guidance from external consultants and advisors, as well as attending seminars.
But a lot of the time, the biggest learning has been about getting in there and being faced with the reality of each situation. Experience is the best trainer.
We raised our first fund in 2008, days before the financial crash. The regulatory landscape has changed so much in the last 10 years. Compliance has now moved up the agenda and is now given the appropriate place in the assessment of investments. In fact, we’ve pulled out of a number of deals because of compliance matters, despite there being good numbers / projections. The agenda has certainly changed.
TDD: How do you see your role progressing over the coming years?
SP: While I am responsible for all legal matters, since becoming a partner my role is much broader, with more of a commercial angle. So the future is about developing that by participating in strategic activities and the general growth of the business.
In terms of progression, I don’t think you ever stop learning which can only lead to progression.
TDD: What are you most optimistic about for the next 12 months?
SP: There are a lot of interesting projects in our portfolio for this year which will help towards raising our next equity fund. We are also looking at launching a debt strategy, which is hugely exciting.