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January 26, 2023

In order for an M&A process to be successful, there must be effective governance in place. Governance is used to manage risks, and ensure that key stakeholders are well-informed and able to provide appropriate oversight throughout a transaction. In this article, Guy Fisher, Head of Corporate Development at Suncorp Group, shares his expertise in setting up M&A governance for efficiency. 

"Speed and efficiency create better outcomes. It reduces confusion and the time for external factors to impact the value of the deal and increases certainty." – Guy Fisher

How to set up efficient M&A governance

To establish efficient M&A governance, assess the situation, consider any constraints such as confidentiality and regulatory obligations, and review prior transactions to identify areas of agitation and friction to minimize business disruption. By having the right individuals in place and well-aligned, the ideal process can be mapped out.

  1. Retrospective - Note what went well and what didn’t from past experiences to continuously improve the function. 
  2. Preparation - Plan the ideal process and map out committees and stakeholders. 
  3. Set M&A up for success - Look at the current team. Make sure the M&A team has the right capability and efficient process. Heavily consider the project management aspect of M&A. Understand the business thoroughly and set the team up around it. 
  4. Templates - Template as much as possible so everyone can move quickly. Template artifacts that the function uses regularly. 
  5. Have the right advisors - Make sure that the selected advisor brings something incremental to the deal. 
  6. Consult with key stakeholders - Talk to key stakeholders and understand their thought processes. 
  7. Alignment - The key stakeholders must understand what is required of them and their role in the process.  
  8. Timely decision-making - Identify the final decision-maker to avoid wasting time. Simplify documents for faster comprehension
  9. Clear agenda for meetings - Be respectful of people’s time. Ensure that every meeting has a clear purpose. 

Governing bodies

Risks are tied to every deal, no matter the materiality or size. Every governing body must be informed and aligned to keep decision-making efficient. Make sure that the transaction documents are easily digestible for everyone to comprehend and make decisions quickly. 

  1. Group Board. The group board is the final approval for every transaction. 
  2. Board Subcommittee - Sometimes, the board creates a subcommittee who meets frequently to oversee the transaction and make recommendations to the group board. 
  3. M&A steering committee. The steer co includes the CEO, CFO, CRO, and general counsel, and is the one who will approve any activity regarding the transaction, such as allocating the budget and resources.
  4. Business sponsor. The M&A team can’t champion a deal. The business sponsor must be the one who will take ownership and accountability for the entire transaction. 
  5. Working group leads - These are the functional leaders who are the subject matter experts in their respective teams. They are the ones that are constantly meeting and dealing with issues regarding the deal. 

How to approach stakeholders

Guy finds it surprising that although it's crucial, people seem to show little regard for internal and external relationships. Building strong connections is key to M&A; successful transactions are only possible with empathy and trust among key stakeholders. When M&A gets intense and stressful, people will question how it will affect them and their careers. Make sure to let them know you are thinking of them and show them how valuable they are to the process.

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