If CFOs and boards of directors can align their thinking or are already aligned on how to approach mergers and acquisitions, deals have a chance to be more successful.

But a study released in August by Deloitte, “Bridging the Gap: M&A,” shows that CFOs and board members can have significantly different views on what kind of deals to pursue and how to create value from them. They also have contrasting opinions on how effective CFOs and boards are at identifying and assessing M&A opportunities and risks.

The nearly 200 board members and CFOs responding to the Deloitte survey on M&A disagreed most notably on the primary objectives for pursuing an M&A deal. (Only executives at publicly held companies with more than $500 million in revenue were surveyed.) Cost synergies or scale efficiencies were cited by the most board members, but the greatest number of CFOs said the primary aim of M&A was product and service differentiation. (See the interactive chart.)

Deloitte did find areas of consensus — for example, both boards and CFOs say their M&A strategy the rest of this year and next will be to “seek smaller strategic deals to take advantage of favorable opportunities and valuations.”

But CFOs and directors diverged on how those deals might be funded. More CFOs (37 percent) than directors (25 percent) chose debt (behind cash, which directors also chose first) as a primary funding source for takeovers in the next year-and-a-half.

Integration failure was the top concern about M&A transactions for both groups. But when asked about the greatest risk to achieving a successful integration, CFOs and directors displayed contrasting views. A quarter of board directors chose synergy capture as one of the greatest risks, but only 11 percent of CFOs did so. Meanwhile, thirty-two percent of CFOs chose customer retention, but only 20 percent of boards flagged that concern.

The disparity in viewpoints between CFOs and boards in part reflects their different responsibilities in an M&A deal and in the day to day operations of a company, says the Deloitte report.

As CFOs get more heavily involved in operations, for example, it’s no surprise they see the primary purpose of M&A as differentiating or diversifying products and services or entering new markets, instead of achieving synergies and cost efficiencies. CFOs also may have “disappointing experiences[s] regarding achievable synergies and efficiencies,” says Deloitte.

Finance chiefs actually have a pretty jaundiced view of both the finance department’s and the board’s effectiveness at assessing M&A risks and evaluating a transaction’s upside. Almost half of directors said the finance department was “extremely effective”” but only 19 percent of CFOs rated themselves that highly.

“Perhaps this can be explained by CFOs’ modesty, but it’s also possible that CFOs are being somewhat self-critical, due to a belief that they could be doing more in areas such as deal analysis, modeling, valuation and negotiation,” says Deloitte.

When rating board members, CFOs were just as critical: only 13 percent rated them “extremely effective” at overseeing and helping to mitigate risk associated with an M&A transaction. Twenty-seven percent of directors, however, put their boards in that category.

If boards recognize there is a deficiency, they could potentially do a deeper evaluation of what they have contributed to M&A transactions and outcomes, and consider changing the composition of the board to include more M&A skills and experience, Deloitte says.

To increase M&A effectiveness organization-wide, Deloitte says the board and the finance chief need to “make M&A objectives, strategies and risks explicit both in general and for each transaction. … Regular discussion between the board and the CFO around inorganic growth strategies and ways to implement them to achieve strategic goals could help bridge this gap.”

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