Ensuring a Successful Credit Union Merger
Our firm recently facilitated the successful merger of two credit unions. One of the fundamental issues that we focused on was the ability of the post-merger team to quickly establish and maintain productive working relationships with employees and the members they serve. From the outset, it was critical to identify people-related risk factors as well as integration challenges and their value.
A Bain & Company survey of 250 global executives involved in mergers and acquisitions concluded that only three out of 10 transactions created meaningful value for shareholders. Poor integration was one of the major causes for these failed corporate unions. Harvard Business Review points out in its article “Human Due Diligence” (April 2007), that if deal making ignores and underestimates the significance of people issues, the results can be a significant loss of talent after the merger, long-term attrition and lost market share (two-thirds of mergers lose market share in the first quarter after the merger is completed).
Plan, facilitate and coordinate the delivery of due diligence draft and final package from the accounting firm on time and on budget. Conceive and implement a Transitional Governance Committee to facilitate board engagement and communication. Identify and facilitate closure of key human resources decisions. Position CEOs to exceed board expectations and achieve higher levels of Board confidence. Plan, facilitate and develop materials for Go/No Go meeting of both boards. Develop collaborative way to create the foundation for the new board. Build processes and criteria that position board to be a strategic asset to the CEO. Develop and manage an enterprise risk management framework for the transaction.