Finance and tech directors at risk after mergers

July 19, 2016 | City A.M.

IF YOUR company is going through a merger, research out today suggests you might want to polish off your CV if you have a boardroom position in charge of cash or computers.

The study by DHR International revealed 43 per cent of director-level jobs are dropped from companies a year after they merge, with technology and finance chiefs being the most likely to be shown the door.

“Our research confirms that mergers and acquisitions are a ruthless process and demonstrates how high the loss of talent can be,” said Simon Mansfield, managing partner of DHR International’s London office.

Technology chiefs whose company is merging to take advantage of the technical prowess of another firm should be watching their step particularly carefully, the research found. 

“If one of the drivers behind the merger is a technological advantage over competitors that is seen not to be fully utilised, then the technology chief can often find their position under threat in the aftermath of M&A activity,” explained Mansfield.

However, finance heads should be just as wary, with Mansfield pointing out, if the merged company is substantially larger than the two companies which combined to create it,
then management may decide a completely new outlook is needed from its finance crew.

“It is quite often the case that the post-merger composition of the company exceeds the experience of both finance chiefs. It is then likely that both executives will lose their positions in favour of an external director possessing this expertise,” commented Mansfield.

Those who are yet to claim their place at the boardroom table can relax, as director level jobs are the most likely to be dropped.

 

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