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Striking a Balance – The Board’s Role in M&A

Corporate Development 2012 – Leveraging the power of relationships in M&A


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It is hard to understate the impact that the financial crisis has had on business practices. One of the greatest effects has been in the boardroom, where a heightened sensitivity to risk appears to have spurred more scenario planning, more judicious deployment of capital, and requests for better business intelligence from management. Not surprisingly, this caution is playing out in the board’s consideration of M&A activity. Greater than 40% of respondents note that their boards have become more involved in M&A over the past two years, primarily in the form of asking for more frequent updates and deeper details about evolving deals (figures 1 and 2). 

Figure 1. Change in involvement of the board of directors in M&A over past two years

Figure 2. Most significant way board of directors involvement in M&A has increased

With board members focused on being better stewards of corporate capital, corporate development teams face two key challenges: (1) how to provide a regular flow of high-quality information without excessively taxing their teams; and (2) how to help the board add value not just by protecting the company, but also by using its collective experience to serve shareholders by more diligent and intentional involvement in the company’s M&A and growth objectives. 

For further insights on what Corporate Development executives are thinking related to the Board’s role in M&A, read Corporate Development 2012 – Leveraging the power of relationships in M&A.

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