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Merger Samples and Tools

1. Bring both boards together to discuss and sanction the merger process
2. Board chairs kick off due diligence
3. Identifying due diligence questions
4. After due diligence, bring the boards together
5. The report executive summary

2. Board chairs kick off due diligence

Be clear and formal in authorizing work. In the example below, four committees have been designated: Legal and Governance, Finance, Community Relations and Funding, and Programs.

As you know, CMC and NFS have together begun the process of due diligence to consider a merger. The Merger Committee-consisting of 12 total members representing each organization - met last week. We had a great meeting-productive and characterized by a lot of good spirit.

One important conclusion from the meeting is how vital and important your work will be.

This memo represents the detail we are able to give you at this point about the due diligence process.

Putting some parameters around your work

The Merger Committee proposes that you view your work in the following ways:

• You have four months to complete your work. You should be finished by the last week in May.
• You have full authority to do your work and to make a recommendation.
• You may organize the effort however you would like.
  
  The only starting point in terms of content is the list of attached questions for your committee to consider. These come from the respective board discussions to date. We've chosen to not edit them. Some are broad-view them only from the vantage point of the merger question. Address them as you see fit!
  
  Note: You need only be concerned with the questions listed under your subcommittee. (We wanted you, however, to see the whole list.)

How to organize your effort

While you can organize your work in any way you'd like, the following are examples of things you might address:

• Discussion and agreement on the short list of key issues you want to take up (using the preliminary questions as your starting point)
• The rough sequence for addressing these issues
• Agreement on the data and background material needed to serve the first couple important discussions
• Establish a preliminary time line and meeting dates

The most efficient course of action would include having the first meeting address at least one substantive issue.

We would like a recommendation from your committee

Sometime in early May the CCC will hold a meeting in which the subcommittees present recommendations. These recommendations might be organized around three basic questions.

1. What did you find that supports the merger of the two organizations? (List out in simple presentation form up to 10 findings)
2. Did you find anything in your deliberations that is serious enough to question the value of a merger or preclude a merger? (If yes, describe.)
3. From your vantage point, do you recommend merger (or not)? (a simple yes or no)

We'll be developing a format for you to use in the coming weeks.

A note on staff roles

Each committee will have as members a staff person from each organization. These individuals will fulfill several roles:

• Full participants in the committee deliberations and decision making
• Point person or go-to person for each organization's general staff
• Technical assistance to the board members on the Committee by a) helping to gather information and b) conducting simple analyses in the interim periods

A note on the essential challenge of distilling the information into a recommendation

We understand that it will be no easy task to distill a variety of types of information into a short presentation and a simple yes/no recommendation. Remember though, the major assumption going into the process is that that your recommendations will need to be made within an environment of uncertainty. This is the "social entrepreneurial" challenge you face!

We know that we're asking that you be willing to make a hard and important judgment within a relatively short time period. This argues for going quickly to the essence of what is important and excluding all marginal issues.

How you will get support during the process

We recognize the challenge of the subcommittee work and want to offer a couple types of assistance. The two of us, along with our executive directors Jim and Joan-will be meeting with you periodically to help in any way. Feel free to call on us collectively or individually at any time.

Also, our consultant stands ready at any point to help. Steve Forman's phone is 206-524-1988.