On August 15th, Sandaire announced that Warwick Newbury would succeed me as Chairman of Sandaire in London.
Several people have asked if this means retirement; it couldn’t be further from the truth! This development is just another step along Sandaire’s evolution.
Since I started the business, my aspiration was to create a business that was reputable, valuable and enduring – the guiding lights of most entrepreneurs.
We must excel at what we do to have a powerful reputation and we must be aware that with a new(ish) brand, reputation is a fragile thing. So, we must do what we promise and do it well.
Value creation should follow reputational excellence. It’s important to grow and create value, not because we (as owners) have any desire to crystallise resulting value, but because it demonstrates an objective return on capital invested (and continually reinvested) in the business. It’s also a demonstration that time has been well spent in driving a business forward notwithstanding a ferociously competitive environment dominated by immensely strong brands.
A business that is reputable and valuable will endure unless it either becomes complacent or systemic changes erode its rationale for existence. A blend of relentless competition, clients with high expectations and management that is both effective and energetic, create consistent pressure to improve, develop and explore. That doesn’t guarantee endurance but it provides the necessary incentive.
Entrepreneurial businesses tend to combine the roles of manager and owner. I believe the entrepreneur is always asking themselves the question, “How can I make this business great?” As a business grows, the answer to that question may mean the time is right and it’s a good thing to separate ownership from management to clarify roles and ensure disciplined, objective business decision-making.
Family-owned businesses differ from others in that the roles of owner, manager and family member can often by held by the same parties, and successful participants become adept at addressing issues from different perspectives. In Sandaire’s case, the owning family is also a client, and this enmeshing represents extraordinary alignment.
In my view, family businesses with engaged owners and empowered management have a powerful advantage because the two parties can have high-quality direct dialogue. Well-run family businesses can avoid the ‘agency’ issues often apparent in quoted companies when communication with owners is indirect and often unrepresentative. The alternative partnership model combines ownership and management, but many struggle to endure.
The appointment of Warwick Newbury as Chairman of Sandaire marks my transition to being an engaged owner. If we are to achieve our objective of being reputable, valuable and enduring, then the business must flourish without the hands-on engagement of the Founder. Management’s role in the next chapter of the business is to create a powerful, resilient business – still connected but not overly reliant upon one person, one family.
I am confident that Sandaire will remain true to its founding values, spirit and underlying objective of doing the right thing. I will remain engaged, involved and supportive, acting as ambassador, advocate and advisor. I remain Chairman of my family’s holding company (and Sandaire’s owner and parent company), Applerigg, for the foreseeable future. I will continue working on various investments and initiatives in the financial services sector, and I hold to my aspiration to create reputable, valuable and enduring businesses.