Updates and briefings
Of course, the board cannot oversee M&A strategy and deal-making without being advised by management. When it comes to strategy, just over half (52 percent) of respondents report that their board is given briefings on an ad hoc basis, while a quarter say their board is briefed at every meeting.
Thirty-six percent of those at large-cap companies, 34 percent of those at mid-caps, 19 percent of those at mega-caps and just 11 percent of those at small-cap companies say their board is briefed at every meeting.
One third of respondents in North America say their board is briefed on M&A strategy at every meeting, compared with just 14 percent of those in Europe. Seventeen percent of respondents in Europe say briefings take place at every other board meeting, compared with 2 percent of those in North America.
More than half (59 percent) of respondents report that their board is updated on deal preparation/ mechanics for a material M&A transaction on an ad hoc basis, while 19 percent say updates happen at every board meeting. Outside of that, 10 percent say updates are given on a daily, weekly or monthly basis.
Almost a third of those at large caps say deal updates are given to the board at each of its meetings. By comparison, just 5 percent of those at mega-caps and 11 percent of those at small caps say updates take place that frequently.
Boards also need to be kept in the loop on how a deal is being put into effect. Overall, 41 percent of respondents say their board is updated at every meeting on the implementation of a material M&A transaction during the first year after the deal closes. Around a third (32 percent) say those updates happen on an ad hoc basis.
Sixty percent of respondents at large caps report that implementation updates are given at every board meeting. This compares with 34 percent, 33 percent and 32 percent of those at mid-caps, mega-caps and small-cap companies, respectively.
More respondents in North America (43 percent) than in Europe (34 percent) say their board gets updates at every meeting.
Respondents were asked to name the most important role for governance teams in assisting the board on M&A. Due diligence and risk management are common responses. In addition to these, respondents’ comments include:
'Helping manage the process and [due diligence] on governance-related matters’
'Ensuring all necessary steps are followed and stakeholders consulted/informed’
'Transparent approach and supply of complete and accurate information’
'Environmental liability’
'Understanding target’s governance structure and challenges’
'Ensuring a good fit that is compliant with local laws and employment rules’
'Overall benefit/risk assessment and value’
'Finding errors’
'Due diligence, deal execution and post-closing integration’
'Reporting on risks’
'Understanding target’s ability to conform to parent’s governance requirements’
'Identifying and highlighting risks relevant to decision-making’
'Setting compliance strategy as a group’
'Disclosure issues’
'Identifying potential governance issues’
'Clear communication’
'Guiding the board [on any required] approvals and public announcements’
'Assisting the board in understanding the risks involved in the transaction and making sure it has adequate materials and information to properly assess the deals being presented for approval’
'Helping ensure all fiduciary duties and approval processes are met’
'Making sure all the regulatory steps are followed’
'Supporting execution materials. Ensuring effective information flows, decision-making and regulatory compliance. Shareholder approvals and external and internal comms’
'Identifying risks of the transaction, ensuring the transaction aligns with our values/priorities and forecasting the financial and brand implications’
'Identifying potential governance issues that can impact the structure of the transaction’
'Compliance’
'Gathering the data into a central location and advising the board on its governance requirements’
'Identifying potential liability issues (such as stockholder lawsuits) associated with transactions’
'Governance and disclosure matters’
'Alignment of businesses, leadership and culture’
'Ensuring disclosures are accurate’
'Project management and reporting’
'Supporting submission of clear and timely data on the deal and approval process. Helping board understand what authority it is giving management’
'Ensuring disclosures are well drafted and appropriate’
'Crafting appropriate deal-approval process’
'Right cadence of review and right information on decision-making process’
'Culture and ESG’
'Cyber-security’
