Have you been involved in M&A in your career??

1. » Quick question
Taking over
‘They also play a key coordination role in
Have you been involved in M&A in your own career? the company between it and its shareholders,
so they need to be an intrinsic part of the
85%: Yes process in order for it to run smoothly,
15%: No especially in Class 1 or Takeover Code
governed deals. These deals often involve
be taken into account. While 73% responded complex capital structures, the concepts of
by saying that other factors should also be which company secretaries are the most
taken into account, when we reviewed the familiar with. The challenge can sometimes be
additional comments, we have found that getting others to recognise this,’ he furthered.
many respondents saw shareholder value This year has shown an upsurge of
as perhaps the most important factor to be shareholder activism, with rebellions against
taken into account. However, other factors undue executive remuneration packages
that were raised, which should be considered never being too far away from the headlines.
as motivation for successful M&A, included: all We wondered, though, if this ‘louder’
other stakeholders, reputation, public interest, shareholder voice is extending to other
employees and long-term prospects. business matters. Having already established
Issues concerning shareholder integration Further to this, we also wanted to know to that shareholder value is one of the most
in mergers and acquisitions (M&A) have what extent the company secretary should be important motivations behind a successful
recently provided a welcome distraction involved in shareholder and board integration M&A, it is perhaps unsurprising that 84% of
from the predominant shareholder issue of as part of a successful M&A. This particular the Chartered Secretary/CSS panel believe that
2012 – remuneration packages. Undoubtedly, feature of the role of the company secretary there is increasingly more shareholder activism
the commodities group Glencore, which has ranked highly amongst our panel, with 85% stretching into the realm of M&A.
been in talks with rival commodities giant, agreeing this to be an important responsibility. A shareholder vote on Glencore and
Xstrata, over one of the largest potential However, our respondents felt that, while this Xstrata’s merger has now been set for
M&A deals, will disagree. Nevertheless, we is a significant aspect of their role, they also September as shareholders battle for improved
wanted to open up this discussion to the thought there were several others areas which terms and protest against multimillion-pound
Chartered Secretary/CSS panel to gain a they believe a company secretary should payouts for directors. In addition, the delay
broader sense of the company secretary’s role bear in mind while assisting in M&A. These will also give Glencore’s Chief Executive, Ivan
and the shareholder’s involvement in M&A. included: program management, performing Glasenberg, more time to hammer out a deal
One hundred per cent of our panel – their duties to shareholders, ensuring with Qatar Holding, Xstrata’s second-biggest
our strongest statistic yet – considered the appropriate governance and general ‘hands shareholder, which is demanding a larger
role of the company secretary to be an on’ board support. payout from the deal. What has become clear
important one during M&A, with 85% One respondent commented: ‘The company from this month’s Quick Question is that the
affirming that they had been involved in secretary will often know how a company’s company secretariat in both companies, are
at least one during their careers. structure operates better than anyone. This going to be kept busy.
One of the key reasons behind the holistic overview is extremely important in
postponement of the Glencore/Xstrata £50 M&A situations, as they know how to channel
billion merger, which, if approved, would information quickly.
create the world’s largest multinational
commodities trading and mining company,
is because of shareholder angst over the
terms of the proposed agreement. In light
of this, we wanted to ask our corporate
governance community if they felt M&A
should be solely motivated by shareholder
value, in keeping with directors’ fiduciary
obligation to their shareholders; or whether
other factors such as public interest should
Conducted in association
with Company Secretarial Services
If you’re a company secretary of a leading UK business, and you’d like to take part in or comment on future surveys, e-mail Caroline Evans
at CSS on cje@blt.co.uk.
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