When making a large acquisition the CEO, CFO and integration team leader (and one or more related divisional heads) should make a firm commitment to see the integration process through. If you are part of the decision to take the risk, you owe it to the organization to stick around and make the return.
- Making a commitment (either as a personal ethic or a stated intention) of at least one year post-closing; and
- Living by that commitment despite other opportunities that might arise.
Whose job is it to ensure that these commitments are made? The CEO, plain and simple.
The Merger Verger Recommends:
As the transaction team is closing in on making a formal bid for a transformational acquisition, the CEO should call together the appropriate parties and say something like this:
We are about to make an investment that could open great new doors for our company but will also expose it to great new risk. Success will require the dedication, focus and time of this team in particular. For that reason, I am making a pledge to you and to the company that I will not seek or accept other opportunities that might come my way for at least one year following closing. I ask each of you to do the same. If we can’t make that pledge than we need to rethink our intentions for this deal.
Look, the Merger Verger understands that there is no loyalty any more and even that “shit happens.” But at the outset of a deal that has the potential to create or destroy enormous amounts of shareholder value, double-checking that there is an emotional (if not legal) commitment to standing by the risk should be a cornerstone of any “GO” decision.
About the Art
- Top: Sky and Water I by M.C. Escher, woodcut, 1938 (17.25″ x 17.25″)
- Bottom: Laying the cornerstone of the main Boston Public Library building in Copley Square, Charles Follen McKim architect, 1895