"As chairman of the board, you need to master the art of tandem cycling," says Dirk De Pauw of the publicly listed logistics real estate investor Montea. "The CEO sits at the front. He steers, accelerates, and brakes. As chairman, you sit at the back. You can look left and right and be critical, but you cannot make operational decisions. If the collaboration doesn't work, one of the two has to go."
As a captain, De Pauw deliberately chooses a CEO who does not come from the family of the reference shareholder. "The family must be a shareholder and sit on the board of directors. Family members who are not on the board are also kept well informed. They receive the same quarterly updates as the other institutional investors."
De Pauw has the right to speak. He put Montea on the map. First by professionally committing to real estate, then in 2006, despite all advice, taking the company, initially called Logistiek Vastgoed De Pauw, public.
However, the roots of the De Pauw family lie in vinegar brewing, vegetable canning, and reconditioning second-hand metal barrels for reuse. But when brothers Pierre (Dirk's father) and Jos De Pauw were asked to invest in a large real estate project, the rootstock took a different direction. They saw more potential in it than in their old activities. Later, they divided the portfolio. Pierre's part laid the foundation for today's Montea, and Jos' part for the current WDP.
The focus on developing logistics real estate, however, only came over time. "Seeing opportunities is in our blood. We found a business case in buying bankruptcies. We sold the assets in Morocco, Tunisia, and Turkey. Then we had to find a purpose for the real estate. That became stacking spaces. Real warehouses didn’t really exist at the time. But the demand evolved, and that’s when we started building storage facilities ourselves."
"In the end, I had the plan to go public. It could provide a recurring dividend stream and made the real estate liquid, which was important for the non-operating family members. Still, the idea was met with skepticism. Eventually, ING wanted to join. We then added a second portfolio so we could start with a size of about 100 million euros!"
After the IPO, De Pauw chose a role as director at Montea. Since 2014, he has been chairman of the board, sitting at the back of the tandem, although he had to briefly take over the steering wheel himself between two external captains.
Remarkably for a family business: you appointed an external CEO immediately after the IPO. Not an obvious choice?
Dirk De Pauw: "I can advise everyone to choose a non-family CEO. The family must be a shareholder, sit on the board of directors, and stay well-informed about what’s happening.
We chose Frederic Sohet as CEO because he had a financial profile. He came from the real estate developer Robelco, where he was CFO. And as chairman of the board, we brought Gerard Van Acker on board, who had experience with the stock market.
Three years after his appointment, however, Sohet left us for a job at Deloitte. Initially, we were heartbroken, but in hindsight, it was the best thing that could have happened to us. At that point, we needed a different type of CEO, and we brought Jo De Wolf in, who is more of a developer. You need to be agile when your profile changes.
I myself initially just became a member of the board and chairman of the investment committee. That’s where I could channel my entrepreneurship. The next generation in the family, however, will be purely board members."
What does your ideal board look like?
"I’m a proponent of limiting the board of directors, because the more people around the table, the less inspiring the meetings are. If you want to bring out the real value, you’re better off with a lean board.
I agree with gender diversity. It’s needed. But imposing quotas, I think, is unnecessary.
One thing that is hardly ever discussed is age. Not just for the elderly, but also for the young. We need to connect them with how a board works. Everything has to be in the interest of the company. You shouldn’t dismiss someone just because they’re getting older. But you shouldn’t exclude someone just because they’re young.
A board member must also be an ambassador. That means being involved 24/7. If you read something in the newspaper, think about the consequences it might have for the company."
Author: Johan Van Geyte
