Building Your M&A Steering Committee

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Building your steering committee is one of the most important things to focus on during a transaction. It will help set your post-merger integration up for success and increase your chances of achieving the most value out of your acquisition. After all, integration is where you make or break value. In this article, we will be talking about the basics of a steering committee and how you can build an effective one.

What is a steering committee?

A steering committee is a group of people tasked to steer a "project" in the "right direction", from start to finish. In M&A, the project usually involves integrating a newly acquired company, determining the strategic rationale of the deal, and dedicating the right direction.?

This group of advisors is usually activated when the deal has closed and the formal execution of the integration plan has begun. The main role of the steering committee is to provide guidance to the integration and make sure the execution sticks to the plan.????

Roles and responsibilities

Whether you are building your steering committee or you are picked to be a part of one yourself, it is important to understand all the roles and responsibilities bestowed upon a member of the steering committee:?

1. Understand the goal?

The first responsibility of the steering committee is to understand the aim, strategy, and intended outcomes of the project. Members will not provide effective guidance if they don't know the intended goals.?

2. Keep the project moving?

Without an overseeing body, projects can sometimes slow down. It can also be hard to get people to support and follow the integration lead. No one wants a slow integration process. The sooner you integrate, the faster you realize value.?

3. The steering committee can help push the project forward?

Frequently, they are made up of C-suite executives or heads of contributing departments, whose voice will have a bigger impact and can push their teams to work harder.????

4. Make crucial decisions?

Some decisions are too big for project managers or integration leads to decide. When this happens, they approach the steering committee. Some of these decisions may involve changes in the business process or additional budget needed to complete the project.?

5. Resolve issues?

Similar to the decision-making, there are problems that cannot be resolved by the integration lead alone. A typical steering committee will have key people that can usually solve operational issues of the acquired company.?

6. Listen to status updates?

The committee is usually involved in a regular cadence of meetings for status updates and project monitoring. Availability is key to an effective steering committee member.??

How to Build your Steering Committee

Now that you know the scope of a steering committee, here are the steps into building one:

Step 1: Involve the Right People

Having the right people overseeing the execution of the integration is also a huge contributing factor to transaction success. Here are some suggested key individuals that need to be involved in your committee:

• Deal Sponsor - This person SHOULD be included in your steering committee. He/She is responsible for the entire business on a go-forward basis; they are typically selected as the head of the steering committee.?
• Leadership from the acquired company - No one knows the business better than the leaders who ran it for years. Their voice is needed to help steer the company to success.?
• Functional experts - Whatever issue you need to mitigate, you need to involve the corresponding functional experts of both companies. If it's a product issue, you need to put the CPO of both companies on the steering committee and the Head of Sales.?
• Industry expert - If a special acquisition requires technical skills out of the leader's depth, you should always bring in an expert advisor.?

The size of your steering committee will vary depending on the deal. However, it is considered best practice to keep it at a manageable size. Nothing too small that you don't include necessary people and expertise on the role, but not too big to hinder efficiency. Typically, the ideal size is around 6 to 8 people.??

Business leaders can offer training and coaching for first-time participants to get them acquainted with the role and responsibilities as part of the steering committee.??

Step 2: Orient Them on the Deal Rationale

No matter who you have in your steering committee, if they do not know the project's intended result, they cannot steer it in the right direction. You need to inform everyone why the acquisition was made, the deal’s goals, and the plans on how you intend to achieve those goals. This should happen preferably way ahead of time to draft their questions before the initial meeting.?

Step 3: Set Meeting Cadences

You need to have an agreed-upon cadence of meetings of all steering committee members. Every member of the steering committee is there for a reason, and you should have full attendance at every meeting.?

Some steering committees agree to meet more than they should. Frequent meetings can decrease the efficiency and effectiveness of the integration team, as additional reporting can disrupt their work and waste their time. Every session must have a purpose.?

What you can do is limit the number of meetings depending on the execution of the deal. If the integration is going as planned, there is no need to meet. You can do ad hoc meetings aside from the regular once-a-month meeting. You can also do milestone-based meetings. You can set a meeting for every milestone achieved to keep everyone in the loop.

How to Run an Effective Steering Committee Meeting

1. Focus on the big picture

The steering committee doesn't have to understand every little detail of the project at hand. Meetings need to be short and succinct, as members also have many other responsibilities.?

Focus on the big picture and the main issues that need to be addressed to keep the project on the right track. Make the most out of their time.?

2. Perform a recap at the end of meetings

Before you adjourn the meeting, use the time to reconfirm the results of the meeting. This will allow you to highlight unresolved issues and highlight the key decision made.?

Doing this gives members a chance to reinforce the results or, in some instances, revisit any decisions if they change their minds. It also gives you an overview of whether the meetings were efficient or not for future reference.?

3. Efficient knowledge transfer

If a member cannot attend a meeting, they need to have an adequate replacement to efficiently transfer the information back to them. This can also be discussed upfront and have the selected person appoint a replacement right from the start if he/she cannot attend a meeting.

Just make sure to avoid placing a biased person in the steering committee.

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