When CEOs identify a trend, corporate board members should listen. New research from the Oliver Wyman Forum third annual CEO Agenda survey suggests that more chief executives will be considering the use of mergers and acquisitions over the next two years to accelerate their company’s growth. The report surveyed 415 CEOs representing roughly 10 percent of global market capitalization, shedding critical insight on several areas boards will need to work on closely with CEOs in order to keep their organizations competitive in one of the most volatile environments in recent years.
According to the report, “CEOs are doubling down on acquisitions, with 94 percent of executives planning to pursue mergers and acquisitions in the next one to two years. Nearly two-thirds of respondents reported plans to leverage industry consolidation as another mechanism to build scale and competitive advantage.”
Ana Kreacic, partner and chief operating officer of the Oliver Wyman Forum explained why M&A is going to be a priority for many organizations in 2026: “CEOs are no longer waiting for stability before they act,” she wrote in the report’s release. “They are converting disruption into a competitive advantage and seeking to buy the scale and capabilities that take too long to build.”
To Kreacic’s point, the report revealed that 42 percent of the CEOs who planned deals plan to acquire new capabilities and intellectual capital. As high as 54 percent of the largest companies and above 55 percent of companies in the sectors where technological change is moving fastest plan to acquire new capabilities and intellectual capital.
So, with such a high percentage of CEOs contemplating M&A activity, here are some questions boards may want to consider:
Have the board and CEO agreed on what the process of selecting an acquisition or merger target will entail? Merging with or acquiring the wrong company can have a negative effect on an organization’s future growth, so the board must make sure there is a robust and objective process that includes rigorous due diligence when evaluating potential target companies. The CEO’s level of M&A experience and the M&A experience of board members matters, so consider if third party consultants or new board members with appropriate experience need to be added to the process. Consider what type of input will be required from other key executives (financials, human capital, legal) to ensure that the company selection process is as extensive as possible.
Have the board and CEO agreed on the purpose and benefits of the merger or acquisition? The board and CEO must be on the same page regarding the reasons for the merger and what the potential benefits will be. What are the synergies that can be capitalized upon by merging or acquiring this specific company? Will this action expand current markets or create new market opportunities? Will the current business model and business operations change for the better by taking this action? How will the board communicate the benefits of the merger to get shareholder approval? These questions and more should be discussed between the board and management before proceeding.
How do the current board members fit into the board of the newly merged companies? When two companies merge, the board members of each company may need to do some soul-searching. Directors of the company that is acquired will likely need to find board seats elsewhere (although a few directors with critically important experience may be absorbed into the acquiring company board). Meanwhile, directors of the acquiring company may need to consider if their skillset and experience will continue to be an asset for the newly formed company moving forward. Nothing should be taken for granted. Additionally, having worked on a board that completed a successful merger might make directors more attractive to other companies looking to make acquisitions in the future. Opportunities to serve on multiple boards or to move to a board that would allow a director to have a more prominent role might be available.
