Bring the boards together
An organisational change as significant as a merger necessarily involves changes to board and other governance structures. Potentially, these changes can be the source of tension. The challenge is twofold: members must feel valued and involved in the merger process, but leaders of the merger must convene a board with the necessary skills and capabilities of the merged organisation. Creating a new, effective board requires new roles and responsibilities, and a new cultural identity based on a shared sense of ownership of the organisation.
When developing the new board and committee structure, consider the skills and capabilities required to support the vision and mission of the merged organisation. Additional skills and capabilities may be required to oversee a larger, more complex organisation formed following the merger. And if these are not held by current board members, new board members may be required to fill identified gaps. New board members can provide fresh ideas and perspectives on organisational oversight, and are unrestricted by ties to previous organisational structure.
Participation in the integration team
Board members should be actively involved in creating and implementing the integration plan. Choose board members for the integration team that are held in high regard, can think strategically, have good people skills and most importantly are committed to the vision of the merged organisation. The board integration team is both the overseer and ambassador for the integration process for board members of both organisations. The team should stay in place for at least six months following the merger. Before legal agreements are signed, the new organisation’s board should meet the new executive director before the finalisation of the merger to discuss board meetings: how they will be run, what agendas should look like, what materials should be sent in advance of meetings and so on.
Setting the right tone
How the board works together during the transition period is a platform for setting productive ongoing board behaviours and habits. The board should consciously work to develop its own culture, creating new patterns of operating and breaking away from previous practices where they are unhelpful. Be aware this could be a very challenging period for the board. Parochial sentiments such as “we’ve always done it this way” should be assessed against organisational needs. Leverage the benefits of previous board experience, but avoid clinging to them. Finally, the lead up to a merger can be long and hard, and enthusiasm for the change can wane. Hold an event or special activity that gives the organisation a tangible achievement to propel the integration process. Ensure that board members understand their contribution is recognised, and that the ultimate success of the merger depends on their ongoing commitment.
Establishing the new board
Determining board roles post-merger involves significant forethought and planning. Some board members will inevitably need to step down to avoid ending up with a large and unruly board post-merger. It is not always the case that the board members driving the integration process are the most suitable candidates for membership of the newly constituted board. A skills audit to identify the skills and experiences for the new board will assist in this process. Recruitment of new board members should also be considered to bring members who only have a duty to the new entity.
Figure 15 provides a list of tasks which Board members and the executive should complete post-merger.
Managing the Board-Executive relationship
Mergers often involve changes in the Board, and in executive management. Members of the board and executives need to forge effective working relationships quickly to ensure the effective management of the transition to post-merger arrangements. This can be challenging, particularly if executive management and board members have different expectations of behaviours, conduct of board meetings and the role of the board. Naming organisational culture traits and addressing clashes is the first step to avoiding personal conflict arising from the integration process.
The appointment of the CEO of the new entity is one of the most important decisions that the board will make. An open, transparent process that is supported by the full board will set the organisation for success.
Please feel free to leave questions or comments on this part of the merger toolkit.