Diversity and ESG: implications for MA

This chapter explores the implications for mergers and acquisitions (M&A) from the twin movements of board diversity and ESG. The chapter analyses how diversity in board composition and a focus on ESG may affect both corporate strategy and board oversight in M&A. Not only is ESG poised to influence all aspects of M&A deal-making, but research suggests that a diverse board may be particularly attuned to and supportive of ESG considerations in business decisions. Yet integrating ESG into M&A may involve thorny tradeoffs. Large M&A deals affect virtually all constituencies of both the bidder and target company, and directors face the challenge of considering the often-conflicting interests of these various constituencies. This chapter focuses on the implications of board diversity and ESG for (i) the board’s role in M&A; (ii) shareholder engagement in M&A; and (iii) judicial review of board decisions in M&A.