These briefing sessions looked at best practice and also the legal, financial and governance implications for organisations. At each, a Chief Executive who had been through a merger, shared their experience from recent merger activities.
The seminars were held in London, Birmingham and Liverpool and interestingly there were no real differences between housing associations nationally. However the following points were made consistently at all three sessions:
- Most housing associations accepted that having a Board approved strategic response to consider future merger partners was good governance.
- Others recommended considering the merger process but also acknowledged that it may not be right for their organisation at this point in time.
It was recommended that organisations consider the following:
- When considering a merger, have the conversation about the difficult things and be clear about why this option is being considered.
- It is resource heavy and can be an expensive process with associations potentially having to back-fill to free up resources within the Executive Team. It will also take a lot longer than imagined; you should have a timetable that goes up to a year and a half.
- Board and Executive Team need to be clear about what the parameters are and what is non-negotiable.
- An association does not need to adopt the code to proceed with the merger process.
- Due diligence is a vital part of this and expertise is required to ensure nothing is overlooked. Funders’ requirements, staff benefits and pensions and governance structures all need to be reviewed extensively.
Individual Case Studies were presented by Geeta Nanda of Thames Valley in London, Bob Strachen of Stonewater in Birmingham and Anne Seddon of Symphony Housing Group in Liverpool.
The case studies provided an excellent way of understanding how the whole organisation and its stakeholders need to buy into any major change within an association. The lessons learnt include:
- There will be some areas where each organisation will have to compromise.
- Don’t expect to see any savings in the immediate future – the initial process can be costly and time consuming. Savings are more likely to arise after a few years following the successful merger. But a good merger gives significant extra capacity.
- It was a good way of increasing second tier management skills as they back-filled for the Executive Team.
- Talking to the relevant local authorities as soon as the business case for the merger is agreed was worthwhile.
- If it doesn’t meet your objectives you can take a step back.
The insights and discussion at the sessions provided plenty of food for thought for attendees. One area that needs to be developed by all housing associations is a strategic response from board and executive teams on how to respond in an objective way to approaches from other housing associations coupled with how to present overtures to others you wish to approach in the most effective way.
If you would like to have an informal conversation about your organisation’s response to the Merger Code or developing your Merger and Acquisition Strategy, please contact Meera Bedi, Senior Consultant at Altair on 07968 888 021 | firstname.lastname@example.org.