No two M&A positions are the same: Different organizational structures and sizes require a different setup for a dedicated Corporate Development and/or M&A department.
We surveyed our community of over 200 Corporate Development professionals about their day-to-day activities. We wanted to understand: What makes M&A professionals inside larger organizations successful?
This will be part of a series of articles sharing our survey results.
Who do M&A leaders report to?
4 out of 10 M&A professionals report directly to the CFO – twice as many as report to the CEO.
While this is not surprising, the number of Corporate Development leaders who report to growth-related functions (Business Development, Expansion) is equal to those who report to the CEO.
Who owns Corporate Strategy?
Not rarely do we see Vice Presidents who own Corporate Strategy and M&A. However, our survey shows: Corporate Development rarely actually owns strategy.
More often, the CEO is the clear strategy leader, and even Business unit leaders have more influence on strategy than Corporate Development.
The role for Corporate Development is clear: While they do not own strategy, they have a clear role in influencing, informing, and executing on it. One participant points out that the CEO leads strategy through a dedicated Head of Strategy in his firm.
CEO owns the strategy through the Head of Strategy. Business Unit leaders execute the strategy and manage the tacticsCorporate M&A leader
Relationship to CEO and CFO
2/3 or participants describe their relationship with the CEO as close or very close. Most of the participants work on a daily basis with their CEO, bounce off ideas.
The relationship with the CFO however looks less close for most Corporate Development leaders. 60% still describe it as close or very close. 40% describe it as neutral or distant, versus only 33% for the relationship to the CEO.
From the qualitative answers, we can tell that the relationship to the CFO is generally more informal, and the CFO comes into play when accounting/controlling related topics touch upon M&A matters.
Key influencers and collaborators
The picture of influencers on M&A is more diverse. The key influencers across the board is the C-Level management, with CEO, CFO, and COO being the most prominent.
But more operational influencers (Chairman, business unit leaders, SVPs) also take a closer role here.
When looking at the departments our Corporate Development leaders collaborate with, it becomes even more granular and shows that M&A is often deeply involved with operations to identify key acquisition opportunities. Finance, Product, Sales, Marketing, and R&D are the most commonly referred to collaborators for M&A teams.
In our next article, we will analyze the data on M&A strategy, and how M&A leaders leverage their organization from origination to execution.