Bridging the Gender Divide in M&A: Origins and Actions - Part II

Today, I continue the discussion on the reasons for the gender gap within M&A. This post was inspired by a law review article on Women and M&A out of UC Irvine Law. The article cites three major reasons for the gender gap within M&A. Implicit and explicit biases, which I discussed yesterday, and structural bias within M&A that I’ll be discussing today.?

Structural bias in the practice of M&A

Common characteristics of the M&A industry are unpredictability given that a new project can arise at any given moment as well as at times, very demanding deadlines. From a financial due diligence (“FDD”) perspective, the team is typically engaged after a letter of intent has been signed and the potential acquirer has the ability to conduct diligence on the target company for a certain time period.?

When the FDD team is engaged, how long they have to do their diligence is a variable that largely depends on what has been negotiated between the client and the target. The other piece to keep in mind here is that during very active M&A cycles, engagement teams can be working on multiple projects at one time.?

These factors fail to accommodate the demands on women who often bear the brunt of family responsibilities.

The UC Irvine Law article notes, “M&A leaders point out that women for whom family issues loom more significantly because of existing gender roles, may select out of a transactional practice area that is perceived as extremely focused on client interaction and meeting client demands.”

Because the inherent nature of the industry is not structured to account for those added family responsibilities, women often leave, especially as they move towards more senior levels of leadership. Women often enter M&A at junior positions and leave the industry within 10-15 years. For example, within a Big 4 Deals practice, women represent 50% of staff at the Associate level and only 35% at the Director level.?

Proposed solutions to structural bias

One idea that could be implemented in the near term is to have an offering that involves high level “desktop” due diligence that would lend itself to professionals that want to have more balance in their schedule. Another idea is to have a specific offering where a discount to clients is given in return for a slower timeline that would allow for more balance in the lives of team members that want that. For each of the above ideas, there would also be a collective agreement between the client and service provider on response times for emails and working hours of the team.?

In the long term, affording women the same opportunities as their male colleagues in M&A will require larger structural changes. As of yet, the historical industry structure has superseded true inclusion of women. Obviously, if any firm is willing to creatively reorganize to support women, we'd want them to succeed. Yet, they may risk losing business to competitors who continue to operate under the existing structures. In this way, there isn't a fast or easy solution to gain full equity.

These are just a few of the solutions that could help address this complex issue. What are your thoughts on this topic?

Link to Part I of this series: https://bit.ly/4b1zMoT

Bio:

Stacy Michelle, a seasoned financial services leader with 20+ years’ experience, provides organizational coaching rooted in diverse personal and professional development methodologies. Currently advancing her coaching expertise at the University of British Columbia, she empowers leaders and teams to harness their strengths and excel in dynamic work environments.??

Refrence:

Afra Afsharipour, Women and M&A, 12 U.C. Irvine L. Rev. 359 (2022).