Pre-merger: Areas of focus

Things to consider in the run-up to a formal merger.

There are a number of pre-merger areas of focus which if not addressed early can delay or derail a merger. You should consider these having considered our key questions before merging.

The make up of the board of the merged charity

The make up of the board are important to try to agree early on. You will also need to decide who the chair and other key officers on the board will be.

This is also a good time to make sure the board:

• is a manageable size
• reflects its diverse stakeholder groups
• includes a mix of relevant skills.

You may wish to have all trustees to reapply within a trustee selection process, with agreed criteria used to decide who joins the new board.    

Thought also needs to be given to how the boards of each organisation meet before merger takes place. For example, the boards (or subcommittees of the boards tasked with carrying out merger) could meet beforehand. 

Chief executive

For charities who do not have a chief executive, this will not be relevant. For those that do, the appointment of a chief executive can be difficult particularly when trustees aim to choose from existing postholders. 

People associated with a particular organisation may have strong loyalty to its existing chief executive and the institutional knowledge they would bring with them into their potential new role. Appointing the chief executive early on reduces uncertainty and gives focus to the leadership of the merged organisation.

Organisations are often very proud of their brand, although it is difficult to measure the value it brings to their work. Organisational identity can be more of an issue where one organisation is absorbed into another. But if brand is considered a valuable asset, it can be preserved in a merged organisation.

It may be that the merged organisation will launch with a new brand. Rebranding can involve a large amount of cost and human resources as well as time to get everything ready. But the merger gives a perfect opportunity to contact supporters and other stakeholders and reconnect with them.   

Although it is hard to quantify, organisational culture is important to voluntary and community organisations and should be factored into decision-making. Mergers have struggled with differences in culture and cultural incompatibility can mean assimilation will be difficult if merger goes ahead.

Merging organisations facing this challenge need to ask themselves whether cultural difference is a reason not to merge, can differences be reconciled, perhaps with the help of an external facilitator.  

Perhaps organisational culture needs to change because it is currently causing the organisation to fail to meet its aims. This is an area where for a fee NCVO’s team of consultants could support your organisation. Read more about our consultancy services. 

However, incompatible culture is sometimes also used as a smokescreen to mask issues such as:

• the chairs or chief executives of the merging organisations not getting on
• disagreement over who will be the chief executive of the merged organisation
• governance differences between organisations, such as a strongly democratic membership organisation and an organisation where trustees select themselves
• different decision-making cultures, for example a flat structured organisation and one that is more hierarchical
• different attitudes to service delivery. 

In assessing organisational culture, consider:

• attitude to risk
• flexibility and tolerance of change
• decision-making approach
• level of participation by staff and beneficiaries
• management style
• involvement of trustees
• remuneration and reward systems. 

Our expert team of governance and strategy consultants can help you to work through many of the issues and common challenges associated with merger. Areas where we can offer support include helping boards to:

• decide if merger is right for your charity
• agree the strategic direction for a post-merger charity
• map future governance structures and agree board composition
• scenario plan and workshop potential issues or obstacles to successful merger.

Please contact our consulting team to explore how we can help and to understand the associated fees for this work. Please note we do not support with the legal aspects of merger. Bates Wells are able to offer this support.