Delivering Shareholder Value Through Mergers and Acquisitions: How the Compliance Function Needs to Work with Boards and Executives to Improve Transaction Results
Compliance & Regulatory Journal, No. 8, 2010
60 Pages Posted: 18 Dec 2010
Date Written: June 6, 2010
Significant literature has pointed to acquisition transactions as frequently being losing events for the shareholders of acquiring companies due to value destruction. This research article explores the attitudes and priorities of directors during this process and aims to highlight some important cues for the corporate compliance function to consider in how they can assist the Board of a listed company in planning and implementing merger and acquisition activity.
The article argues that the corporate compliance function can and should be intimately involved in transaction processes, before and after the event, to provide extra scrutiny and an independent set of eyes and ears to assist Boards with their stewardship.
This article draws on recent research conducted by the author as part of a PhD investigating Board governance of major transactions with the research focus being “What Boards Ought to do to Secure Value when Merging or Acquiring Companies”.
The research conducted was qualitative in nature and is based on semi-structured interviews. Interviews canvassed the views and experience of a range of seasoned Chairmen and non executive directors on a cross-section of Boards, primarily for listed public companies. The author was then able to combine the insights provided by this research with his own advisory experience in mergers and acquisitions to draw conclusions in regard to the value-adding role that compliance can play in the M&A process: starting from strategic planning and going well beyond the execution phase.
Keywords: Compliance Funcation, M&A, Boards, Governance
JEL Classification: G34
Suggested Citation: Suggested Citation