Confirmation DDs

This topic contains 2 replies, has 3 voices, and was last updated by   1 week, 3 days ago.

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  • #114377


    Participant

    One thing I have realised is that project sponsors and top managers are looking for the DDs to support their point of view of the need of a M&A deal, this is a confirmation bias. What we/the team involved in the M&A deal can do to overcome this bias?

    #114575

    Clark Murphy
    Participant

    Well a couple of things. I think the easiest answer, is a team that is looks at all sides of the M&A Deal. The finance team is usually a pretty good of over coming confirmation bias. They are the ones who are usually risk adverse and they are involved with budgets and understand the operations. The second one is a little bit of the obvious and a little bit challenging but understanding the confirmation bias and understanding the objections to the M&A Deal by looking at it from the other peoples view.

    #114663


    Participant

    From my perspective, another possibility in overcoming this confirmation bias would be to keep the independent directors or even the audit committee in the loop of the developments of the M&A so that they are able to provide inputs or intercept in the process, if needed, to help in ensuring that the due diligence process is as neutral or as beneficial to the company as possible.

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