Leadership Risk : A Guide for Private Equity and Strategic Investors

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  • Edition: 1st
  • Format: Hardcover
  • Copyright: 2010-05-03
  • Publisher: Wiley
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This book is a practical guide for private equity investors. It sets out a framework for understanding, assessing and managing the risks associated with senior management during the due diligence process of an acquisition.. This provides an essential input into the wider due diligence review and a sound basis for managing the investment after the deal has been done so as to maximise the chances of a successful exit. The book comes at a time of significant growth in the field of private equity. In the UK over 3 million people (around 18% of all private sector employees) now work for private equity backed companies. It is estimated that European funds currently have somewhere between #200 and #300 billion to invest over the next few years. In the US, the whole issue of private equity due diligence is much more advanced but it is still likely that due diligence will remain a significant issue for private equity investors for the foreseeable future.

Author Biography

David Cooper is a specialist in the assessment and development of senior executives and supports investors in managing leadership risk. For the first eleven years of his career he worked in the risk advisory group at Arthur Andersen. He then completed a Masters degree in Organisational Psychology at the London School of Economics, where he began to develop the concept of 'leadership risk'. He went on to become one of the few Chartered Accountants to qualify as a Chartered Psychologist and founded Cooper Limon, a professional advisory business specialising in management due diligence and portfolio review for Private Equity and Strategic investors. Through Cooper Limon and in his role as head of executive assessment at Praesta Partners, an international coaching firm, he has assessed and coached several hundred senior executives and advised some of the world’s leading Private Equity funds. He continues his research into leadership risk and has spoken internationally at both Accounting and Psychology conferences.
David can be contacted at david.cooper@cooperlimon.com

Table of Contents

Acknowledgementsp. xi
Introductionp. 1
The Problems of Leadership Riskp. 2
The Problems of Leadership Assessmentp. 3
The Principles Underpinning this Bookp. 4
The Audience for this Bookp. 7
The Structure of this Bookp. 9
The Landscape of Leadership Riskp. 11
Introductionp. 11
The Financial Perspectivep. 12
A Brief History of Risk and Uncertaintyp. 14
Leadership Theoryp. 17
Leadership Risk and Uncertaintyp. 18
Leadership Risk in Business Performancep. 19
The Four Quadrants of Awarenessp. 22
Summaryp. 23
Referencesp. 24
Overview of the Leadership Risk Mapping Frameworkp. 25
Introductionp. 25
Overview of the Stages of the Frameworkp. 30
Summaryp. 35
Planning and Preparationp. 37
Introductionp. 37
Planning Through the Four Quadrants of Awarenessp. 38
Summaryp. 49
Deciding What to Assess at an Individual Levelp. 51
Introductionp. 51
Leadership Competenciesp. 53
Psychological Traitsp. 56
Motivationp. 59
Some Common Characteristics of Successful Private Equity-backed Chief Executivesp. 62
The Importance of Contextp. 64
Summaryp. 66
Referencesp. 67
Conducting Assessments at an Individual Levelp. 69
Introductionp. 69
Individual Interviewsp. 71
Multi-rater Feedbackp. 75
Assessing Psychological Traitsp. 78
Review of Available Documentationp. 80
Summaryp. 81
Deciding What to Assess at a Team Levelp. 83
Introductionp. 83
Which 'Team' to Assessp. 84
The Outer View of the Investee Teamp. 86
The Inner Perspective - Team Dynamicsp. 93
The Outer View of the Investorp. 96
The Inner View of the Investorp. 97
Summaryp. 98
Referencep. 98
Conducting Assessments at a Team Levelp. 99
Introductionp. 99
Interviews with Team Membersp. 101
Interviews with Other Stakeholdersp. 102
Feedback Questionnairesp. 103
Existing Documentationp. 105
Aggregate Data from Individual Team Membersp. 106
Live Observation of the Teamp. 108
Summaryp. 110
What to Assess at an Organisational Levelp. 113
Introductionp. 113
Insights from the Four Quadrants of Awarenessp. 116
Summaryp. 123
Referencesp. 124
Conducting Assessments at an Organisational Levelp. 125
Introductionp. 125
The 'Top-down' Perspectivep. 127
Data from Other Levels of Assessment - the 'Bottom-up' Viewp. 133
Summaryp. 135
Referencep. 136
The Review Phasep. 137
Introductionp. 137
Considerations in the Four Quadrants of Awarenessp. 138
The Review Processp. 141
Report Formatp. 146
Summaryp. 150
The Address Phasep. 153
Introductionp. 153
Addressing Leadership Risk at an Individual Levelp. 154
Addressing Leadership Risk at a Team Levelp. 157
Addressing Leadership Risk at an Organisational Levelp. 160
Summaryp. 161
Referencep. 162
Third-party Service Providers and their Approachesp. 163
Introductionp. 163
Considerations in the Four Quadrants of Awarenessp. 165
Third-party Suppliers and their Approachesp. 167
Identifying Potential Suppliersp. 172
Summaryp. 174
Appendicesp. 177
Indexp. 233
Table of Contents provided by Ingram. All Rights Reserved.

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