In a recent article from the Harvard Law School Forum on
Corporate Governance and Financial Regulation, Alexandra R. Lajoux,
chief knowledge officer at the National Association of Corporate
Directors, discusses the role of boards of directors in M&A
deals. Emphasis is made on readiness and oversight.
According to Dealogic, the value of M&A activity is at its
highest since the global financial crisis with July 2015 totalling
$549.7 billion globally, the second highest
monthly total value since April 2007. A more detailed review of
global M&A trends may be found
According to Ms. Lajoux, boards must consider M&A
transactions as part of its routine corporate responsibility. In
doing so, Holly J. Gregory suggests that boards must evaluate whether a
transaction is in the best interests of the company and its
The extent of a board's involvement in such evaluation will
depend on the size of the acquisition and the potential risks.
Boards should, however, be involved at all stages of an M&A
transaction, from the strategic stage to evaluation and execution
Ms. Lajoux and Ms. Gregory both emphasize the importance of
engaging with management and advisors in order to ask key questions
in the following areas: strategic considerations of the company,
risk profiles, capital and cost implications, industry-specific
M&A trends, and resulting opportunities and obstacles.
From the perspective of corporate governance, boards must
consider whether specific measures should be implemented to ensure
an independent process of evaluation. Options may include
appointing a special committee of independent and disinterested
directors to evaluate and negotiate the transaction on an
By taking an active role in the consideration and execution of
M&A transactions, boards execute their director
responsibilities and duties and contribute to the creation of
optimal value for the company and its shareholders.
Norton Rose Fulbright Canada LLP
Norton Rose Fulbright is a global legal practice. We provide
the world's pre-eminent corporations and financial institutions
with a full business law service. We have more than 3800 lawyers
based in over 50 cities across Europe, the United States, Canada,
Latin America, Asia, Australia, Africa, the Middle East and Central
Recognized for our industry focus, we are strong across all
the key industry sectors: financial institutions; energy;
infrastructure, mining and commodities; transport; technology and
innovation; and life sciences and healthcare.
Wherever we are, we operate in accordance with our global
business principles of quality, unity and integrity. We aim to
provide the highest possible standard of legal service in each of
our offices and to maintain that level of quality at every point of
Norton Rose Fulbright LLP, Norton Rose Fulbright Australia,
Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South
Africa (incorporated as Deneys Reitz Inc) and Fulbright &
Jaworski LLP, each of which is a separate legal entity, are members
('the Norton Rose Fulbright members') of Norton Rose
Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein
helps coordinate the activities of the Norton Rose Fulbright
members but does not itself provide legal services to
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should be
sought about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).