Mill Road Capital (“Mill Road”), an investment firm with a 15-year track record of bringing private equity skills to the public markets, today announced that it will be launching the Mill Road Progressive Governance Fund (“MRPG”) in the second quarter of 2021. MRPG’s objective is to generate strong returns by taking large equity positions in small-cap companies and appointing board members capable of improving the culture and character of the boards in those target companies. The strategy aims to improve the functioning of boards by adding directors with the ability to drive long-term value creation, while also enhancing the culture of boards by bringing in more diverse viewpoints and committing that at least 50 percent of its director nominees will be women or people of color.
Mill Road has a history of prioritizing investments in companies with progressive social values, and MRPG will build on that record by targeting undervalued small-cap public companies, with a primary mission of unlocking value by improving governance and enhancing diversity.
The Progressive Governance Fund has a distinctive strategy that is neither passive nor adversarial; it is a “Sponsoring Investor” fund that will seek board seats and constructively engage with management to create economic and social value for shareholders. MRPG’s sponsorship of a company is structured to be a signal to all shareholders that the board has the private equity skills to drive superior operating results and the social commitment to build a diverse and inclusive culture.
“Our Sponsoring Investor fund aims to change the way public companies are governed in America,” said Thomas Lynch, Senior Managing Director and Founder of Mill Road. “With passive index funds becoming the largest voting bloc in public equities, shareholders now more than ever need a skilled, engaged, and aligned partner on the board to ensure the highest standards of operational and social governance are upheld. The Progressive Governance Fund was created to be that partner.”
In support of this goal, James D. White has joined Mill Road as a Managing Director and the Head of Board Governance and Diversity Initiatives. White comes to Mill Road with a long and successful track record of combining highly profitable returns with responsible ESG policies. As a former CEO of Jamba Juice, White led a successful turnaround of the business. During his tenure as CEO, the company’s share price increased by over 300%, while deeply embedding the values of diversity and inclusion into its culture and tripling diversity in its highest ranks. Mill Road’s appointment of White is aligned with the firm’s mission to deliver strong results while bringing value-enhancing diversity to small-cap companies.
White is a transformational leader with 20 years of board experience on over a dozen boards. He is the co-founder and chairman of the Director’s Academy, a not-for-profit organization developed to identify, train and place the next generation of diverse directors. Earlier this month, White was appointed to the Board of Directors of Chief Executives for Corporate Purpose (“CECP”), which was founded by actor and philanthropist Paul Newman and other business leaders. White previously served on the non-profit boards of the NASDAQ Entrepreneurial Center and the Network of Executive Women.
White has long been an outspoken advocate of diversity in the boardroom. He recently wrote in the Harvard Business Review that changing company culture and internal systems, giving diversity officers more control and authority over HR systems, and encouraging merit-based diversity at the highest levels of a company will not only build a culture of diversity and equity, it will also improve the bottom line.
“Study after study has shown that racial and ethnic diversity in both the executive suite and the boardroom not only enhances company morale from top to bottom, but also improves financial performance, encourages innovation, and brings in new perspectives that lead to new opportunities,” said White. “Our mission at Mill Road is to understand the role of diversity, encourage it in all of our investments, and serve as the tip of the spear as corporate America takes this bold step forward into being more inclusive at the highest levels. I am very proud to be a part of this movement and am looking forward to helping Mill Road invest in and support companies with progressive social values and products.”