M&A Policy: A Board Responsibility
In times of crisis, such as an unsolicited takeover offer, or the pressure of a seemingly attractive property in a short fuse auction situation, it is just too late to develop the policies and controls that should have been enacted earlier. It is the board of directors? responsibility to see that appropriate policies and controls are in place before a bear hug occurs, before shark repellent is needed, before poison pills are swallowed. Each board member should ensure that CDP is adequate, on balance, to protect shareholder value, the rights of all constituencies and the viability of the corporation. There are three major areas for CDP focus: board prerogatives, clarification of management responsibilities and controls. All these have been discussed in detail. Hence, with the right fundamental CDP in place, the board will be best equipped to deal with a crisis or an unsolicited offer. Having thought through its own policies in a less turbulent time, the board is then free, when most needed, to bring its whole focus to optimizing shareholder value.