This article was originally published in the Adelaide Advertiser on 12 November, 2019 (p.30).
Directors with experience in mergers and acquisitions will be in strong demand in 2020 and beyond as more companies look to non-organic means to maintain growth, says a leading business and board advisor.
William Buck SA managing director Jamie McKeough said the skillsets and experience required on boards would reflect the low growth, highly competitive global environment.
“With tight conditions expected to linger for some time, generating growth organically becomes harder and firms of all sizes will need to look closer at their M&A options,” he said.
“I expect we’ll see more corporate transaction proposals crossing the desks of directors over the coming years.
“These proposals are increasingly likely to involve cross-border and overseas expansion opportunities as management seeks out new markets and customers.
“How well these proposals are scrutinised at board level will have a major impact on the company’s performance. Boards lacking the necessary acumen can make hasty or naive decisions that place their organisation on a very dangerous course.”
An experienced company director and AICD member, Mr McKeough said the challenges and opportunities facing businesses placed increased importance on having a diverse board composition with capacity in areas including technology, sales and marketing, brand and reputation management and people and culture.
Mr McKeough said financial knowledge should be a “nonnegotiable” for any board member. “But when you look at what really determines a successful merger, it’s 10 per cent financial and 90 per cent people,” he said.
“Having someone on the board that also understands the cultural dynamics in such a transaction is crucial.” He said boards must be equipped to clearly understand their organisation’s business model and constantly review and update the strategic direction to reflect a rapidly changing world. As businesses and business models are challenged by the barrage of technology, board members who are experienced in digital transformation will be sought after, he said. “It’s the boards that have a strong blend of skills and experience that will be best placed to lead their organisations into the future.”