OPERATING COMPANIES’ BUSINESS PHILOSOPHY

We and our operating companies see ourselves as “partners-in-action” to produce sustainable cash flows and rising enterprise values for our owner-shareholders.

Acting like a partner, not just talking about partnership, is one of the hardest-to-learn human relationship skills. It is not for everyone. Once learned, we believe it yields powerful payoffs.

At Unio we are “partners-in-action” at several levels.

• The board at each of our operating companies is a partner with management through a process we call “engaged governance”.

• Unio’s two main businesses – the operating and investment management businesses – are partners in “knowledge exchange” – our term for the cross-transfer of business and investment intelligence.

• The operating companies that constitute Unio’s operating businesses are partners not only in “knowledge exchange” but in helping to drive each other toward the reality of a “greater whole” – a Unio that is more than the sum of its parts.

• The business minds at Unio are partners with the investment minds – our concept of “business and investment skills combined”.

• All who work at Unio or its companies are partners with one another in their adherence to Unio’s “culture-is-central” philosophy.

• Finally, Unio and its companies are partners with their customers and clients as embodied in the idea of “customer-connectedness”.

However, “partnership-in-action” does not mean any loss of clarity on accountability and authority.

To be successful, a Unio company – from the Board and Chief Executive on down – must live by the idea that whoever has accountability must have authority and whoever has authority must have accountability.

Mostly and rightly, accountability and authority are invested in one individual. Sometimes authority and accountability are “co-owned”. No matter who the owner of accountability and authority is – an individual or a group – the imperative for success is absolute clarity about the scope of the responsibility and the authority to carry that responsibility out.

At Unio, one major area of “co-ownership” occurs on the board itself.

We view an acquired company’s Chief Executive and its board as “co-owning” the implementation of traditional governance responsibilities plus policy decisions about people and culture, customers, risk, and strategy. We view the Chief Executive as having the accountability and authority to execute all other corporate actions and to initiate on all issues co-owned with the board.

To be “partners-in-action” and crystal clear in assigning accountability and authority – that is what we aim for at Unio and where we believe success can bring unassailable long-term differentiation.

Of course, finding partner-companies is meaningless if people at those companies, from senior management on outward, are not of high quality; or if the culture at those companies is too closed to accommodate high quality outside talent to fill in gaps or upgrade standards.

As an investor, Unio will look extensively at the competence, excellence, and commitment to the business of senior management as well as to the capabilities of the broader corporate team.

Only with quality people, and especially quality leadership, can Unio produce the enduring results that are the essence of what it aspires to.