Can M&A Drive Change Through Diversity, Equity and Inclusion?

The M&A industry is perhaps wonderfully positioned to drive change from a Diversity, Equity and Inclusion (DEI) standpoint. When we work with our clients, one aspect of the acquisition strategy is to consider the DEI impacts of the target on their post-merger integration plan, how this impacts their reputation, and many other factors. But in order for us to achieve this successfully and to share the best advice, we also need to ensure that our own internal teams possess and reflect these same qualities.

M&A as a Catalyst for Change

It has long been recognized that DEI is a key factor in driving good governance and achieving success, financial or otherwise (more women in senior roles, more diverse board members, etc.). And this concept is true for the acquisition process too. Organizations that focus on DEI from the early stages of the process have a greater opportunity to set the tone for the future and manage any potential bias from the get-go. 

Due diligence offers an early opportunity for both the acquirer and the target to assess whether their companies are aligned or complementary when it comes to DEI initiatives.

From a post-acquisition perspective, there is usually a need to restructure teams, routines and processes. When considering these major organizational changes, doing so from a DEI perspective can be extremely beneficial for the future performance of a newly ‘merged’ entity.

Can M&A Help Organisations Improve Their Diversity?

A 2021 research study undertaken by Letian Zhang from Harvard Business School, which looked at more than 37,000 M&A transactions in the US over the course of some 44 years, found that target companies increased their female managers by 4% more than companies that were not acquired. Zhang also found that M&A deals can help women and people of color who are stuck in lower-level positions move up the ladder.

As part of his study, Zhang noted that these disruptive events could serve as a much-needed reset button for many organizations.

In this sense, we can view the recent Covid-19 pandemic to have had a similar effect. As perhaps one of the most widespread disruptive events in our recent lifetime, Covid highlighted the difficulties that many women face in terms of balancing work and life commitments, and the impact on their ability to advance their careers, pursue promotion, achieve pay parity, and much more.

For organizations, it was an opportunity to address unconscious bias and make DEI values non-negotiable within their cultures.

Pursuing Diversity, Equity & Inclusion in our Own Organisations

As I’ve spoken about in previous issues of M&A Pulse, it is no secret that the investment banking industry – and particularly M&A – has historically had a reputation as lacking representation. That said, despite significant efforts made by governments, organizations and individuals, workplace inequality remains high across most industries.

Within Global Financial Services (Natixis CIB and Natixis Investment Managers), our teams believe diverse profiles that are representative of society as a whole foster greater intelligence, wellbeing and performance, and we have been making concerted efforts to reflect this in our workforce and workplaces.

Since 2019, we have featured in the Bloomberg gender-equality index. We also rank as the leading bank for gender balance in management bodies for companies listed on the SBF 120.

As of 15 February 2023, across Global Financial Services, women account for 43% of our teams. 75% of our senior management committee is staffed by women, and when it comes to our senior leadership circle, women represent 35% of the members.

Allies, Employee Resource Groups, Mentors and Sponsors

There are various steps we can each take towards embracing Diversity, Equity and Inclusion.

Being an ally to women and under-represented groups allows us to better understand potentially biased dynamics within the workplace, to learn from these shortfalls, and to advocate for change. Similarly, Employee Resource Groups (ERGs) are also an effective way of building inclusion. Within Groupe BPCE, we have the WINN network and AllEquals, advocating for women and the LQBTQ+ community, respectively.

Mentorship is also a powerful tool to empower colleagues with advice to navigate their careers, skill development, and general ongoing support.

Sponsorship, likewise, goes a long way to addressing the imbalance many workplaces face, by well-placed individuals actively advocating for capable colleague to receive the recognition they deserve.

The key to remember among all of this is that none of these actions are designed to be detrimental or create unfair advantage to anyone. The purpose is to build a system that is fair and inclusive, which benefits everyone.

Embracing DEI Across Our M&A Network

I am a firm believer that a key factor in what makes our M&A network so successful is the diverse and inclusive nature of its set up. Much as we know that diversity of gender, nationality, education (among other factors) brings a multitude of benefits and success to an organization – the same philosophy applies to the boutiques in our M&A network. There is acceptance of each organizations’ differences and an understanding that a “one size fits all” approach is not necessarily the key to success. Hence, in mind of the specialization of the boutiques, each team proves a local and complementary expertise with their own identity and strength while delivering active collaboration between our partners and clients.