Ernst &Young >Services>SGM IPO How ready is your business - Ernst & Young - Malaysia

IPO readiness encompasses much more than just acquiring resources and implementing controls. Businesses which successfully transition to life as a public company often start operating like one before actually listing. Rather than trust their luck, they ensure all systems are ‘go’, from Operational Effectiveness and People Recruitment to communications policy and execution strategy.

The IPO transformation process has three critical components:

Organizational change: systems, controls and policies adequate for a private company may not be best suited to help grow the company and monitor its performance. Your legal, financial and risk management infrastructure may need to change. How a company communicates any necessary changes internally will also affect staff retention.

World class financial organization: companies shouldn’t underestimate the financial and time commitments associated with going public and meeting regulatory requirements. Stakeholders will also want the business to be financially transparent.

Delivering on the promise: although exciting, life in the public markets is different. Public company stakeholders expect to be provided with company information and returns on their investment. If they don’t get it, then market confidence can slip — along with the share price.

During and after the IPO process, the CEO’s and CFO’s roles assume a new balance between time spent managing sharemarket relations versus managing the business, often a 30:70 mix. As the co-pilot of the pre-IPO process, the CFO’s role becomes critical to a successful outcome, and the CFO's finance team must have both public reporting and independent audit experience.

A company’s internal infrastructure must be capable of managing day-to-day operations within the context of the public domain. Exceptional enterprises evaluate and engage an outside advisory team 6 to 12 months in advance of filing. Advisors may include investment bankers, legal counsel, independent audit and an investor relations advisor or consultancy.