The CFO's Role in Merger and Acquisitions by Maureen O'Connell, CFO at Scholastic Corporation

The CFO's Role in Merger and Acquisitions

Maureen O’ Connell Executive VP, CFO and CAO Scholastic Corporation Sept 29th, 2014 Note: The views expressed here are my own.

CFOs & M&A Deals ď‚— M&A deals are most often made to scale up,

expand into new geographic markets or product lines, add new capabilities or integrate the supply chain. Regardless of the reason, when your business is considering an M&A, there are 3 essential roles - which I like to call playing SIR that you, being the CFO, must play to lead it to success.

1) Strategize ď‚— Ensuring that the deal is financially sound falls into

your purview automatically. ď‚— In addition, you are also expected to offer insights

into qualitative aspects like shaping the renewed vision for the future and identifying potential problems. ď‚— Since you are the trusted truth-teller of

stakeholders, you will have to give voice to this vision to garner their support and also explain yourself if objectives are not achieved as planned.

2) Integrate  Consolidating two entities could reduce costs,

increase sales, boost profitability, pool in talent and offer a range of other benefits.  To kick-start the momentum in a timely manner,

you would play a key role in creating a sound integration plan after the merger and identifying the people who can execute it.  This role will last all through the first year, when

the integration effort is most significant, in charting out the roadmap for the future.

3) Redesign  Merging the finance teams effectively is the least of

your worries.  You must define objectives and create performance

metrics that more than justify the deal’s purchase price.  You must redesign the compensation and incentive

programs.  You must organize training programs to help new

employees identify the key value drivers within their control and how to attain performance goals.

To Conclude‌  Your bittersweet role of truth-teller would also mean

that you would have to explain to stakeholders if objectives aren't achieved. In such a scenario, make your communication timely and clear: explain the reasons behind the failure and reassure them with specifics of the corrective steps being taken.

Maureen O'Connell Maureen O’Connell is the current Executive VP, CFO and CAO of Scholastic Corporation. When not working, Maureen loves running, Skiing, Scuba Diving or Travelling.