The role of the Board after close
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What have you seen in terms of the role of a board for a privately held company once they are acquired? There is certainly a possibility that they may be part of a steering committee but also a possibility that their job may be done if their goal was to support an exit strategy for the owners of the privately held company. In my experience, sometimes the Board has too little knowledge of the day to day workings of the company to be of much assistance to the integration team. Other times a board member or two has had a history working in the business and can continue to serve as an adivsor through the integration until the transition phase winds down.
In many acquisitions, there’s a change in leadership, and the acquiring company may appoint new executives or integrate existing leadership from both companies. This can lead to a shift in the composition of the board. The board plays a crucial role in overseeing the integration process. This includes aligning the strategies and cultures of the two companies, addressing operational synergies, and ensuring a smooth transition to achieve the desired objectives of the acquisition. While the day-to-day operations may be overseen by the management team, the board retains a strategic oversight role. They may be involved in decisions related to the direction of the integrated entity, key investments, and overall business strategy.
From my experience, the board played a key role in overseeing the integration process by providing guidance to the management on integration strategies and challenges. They also played a big role in facilitating the executive leadership transition, especially when executives of the acquiring company were appointed for certain responsibilities replacing former executives, as the board helped maintaining organization stability.
I would think about the M&A has been done, and integrated, the old board would have to cease. There maybe a combined board (with lesser directors).
Typically the old board would cease operating in its current function once the transaction is completed. There might be some holdover on the new board makeup but typically the buyer will form its own board to govern this new acquisition. The founder of the selling company usually gets a seat at the new board if they are rolling equity and play an integral long term role in the new plans of the business.
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