Director Dialogue: Navigating M&A Deals in an Uncertain Environment

In brief:  Over the years, researchers have found that the vast majority of merger and acquisition (M&A) deals—from 70% to almost 90%, depending on the study—fail to achieve their objectives in one way or another. Yet these figures have not put a damper on deal activity, and M&A has been consistently cited as a top board priority by respondents to NACD’s governance surveys.

NACD and Protiviti held a series of roundtables that brought together more than 60 directors to discuss current challenges and effective practices in board-level M&A oversight, focusing on those situations in which the board’s company is the acquirer.  This Director Dialogue paper summarizes takeaways from the discussions, which highlighted five questions for board members:

• Have we clarified the company’s acquisition philosophy and its link with our overall strategy?
• How thorough is our due-diligence process?
• What role is the board playing to help overcome “deal heat”?
• How do we measure the success of the integration process?
• What insights have we gained from post-deal reviews over time?

Most relevant audiences:  Board members of public and private companies, particularly those considering potential acquisitions.