Corporate value creation: the effects of board role and composition on post-merger integration

Purpose Post-merger integration (PMI) processes are essential to prevent mergers and acquisitions (M&A) failures and support company resilience to societal challenges. Still, we lack a comprehensive understanding of corporate governance value creation within PMIs. The composition of the boards, characteristics of their members and board links to company performance in light of corporate sustainability are important strands of research (Adams et al., 2018; Carline et al., 2009; Gokkaya et al., 2003; Walters et al., 2007). However, the links between the board’s expertise, independence, involvement and the role in PMI processes remain underexamined. The study aims specifically to address the gap in research by examining how the boards are composed and what their role in PMI processes is targeting value creation. Design/methodology/approach A qualitative research was performed based on Gioia methodology, aligned with a constructivist perspective. The paper presents findings from in-depth interviews of companies’ board members, who have been involved in M&A transactions and execution of PMI processes. The data are analysed thematically, employing digital tools for coding and systematization. Findings The study provides evidence that M&A failures are deeply rooted in limited attention to post-M&A company board structure and its composition, as well as underinvolvement of boards in PMI. The board's strongly diversified competencies, its members’ expertise, the involvement of members with previous PMI experience and the ability to reinforce the expertise of the chief executive officer are crucial for integration success and value creation. The paper suggests decomposing PMI, a multifaceted and dynamic process, into separate stages and examines links between the specific stage and role of the board in it when addressing targets of value preservation and value creation. Originality/value The study contributes to the literature on corporate governance by addressing the tensions among major stakeholders with different goals and preferences throughout different stages of PMI. The study has governance policy implications, suggesting that it becomes imperative to integrate board roles into the PMI framework and adjust its composition to ensure value creation during PMI.