Director survey: How the pandemic has set new M&A priorities

On the board’s agenda, December 2021

By Joel Schlachtenhaufen, Andrew Wilson, Trevear Thomas, Alvina Patel


Over the past two years, corporate boards have seen a raft of challenges come their way. As COVID-19 spread globally, directors suddenly had to be certain that their management teams were doing everything possible to protect the health and safety of employees, to strengthen supply chains, to reinforce the company’s finances, and more. On the M&A front, boards saw a brief drop-in activity followed by a strong rebound that presented both risks and opportunities.1

Even as the pandemic raged, directors also had to grapple with a societal reckoning around racial, economic, and environmental issues. Boards faced a new urgency to ensure that their company’s strategies and actions aligned with its greater purpose and its responsibilities toward a broad range of stakeholders.

With so much going on—so many demands on their time and expertise—directors inevitably reordered their priorities.

The third annual survey of directors of US companies, conducted jointly by the National Association of Corporate Directors (NACD) and Deloitte, shows how directors’ views and actions on M&A matters have shifted.2

In summary, the survey found that boards are giving M&A activity greater attention earlier in the process, ensuring that a company’s deal strategy is right and that diligence is done properly. The flip side is that they are giving less granular attention to integration planning and to longer-term efforts to assess deal success. Directors also are putting new emphasis on environmental, social, and governance (ESG) considerations in M&A, responding to growing demands from diverse stakeholders and the increased attention management teams are giving these issues.

Director survey: How the pandemic has set new M&A priorities

Shifting board priorities

Directors are focused on earlier stages in the M&A process. They report greater involvement in strategy development, deal selection and due diligence, and a smaller role post-close in overseeing value capture and integration execution.

Asked when in the M&A process the board got involved, almost all the directors surveyed (95%) report that they have a role in pre-deal strategy, and 75% say they are involved with due diligence, including structuring and financing decisions. The numbers then drop off for responses that come later in the process, with 70% saying they play a role in value creation, 65% citing integration planning, and just 49% saying that the board discusses or addresses integration execution.

This is a notable change from prior surveys. The percentage of respondents citing pre-deal strategy is up 8 percentage points from the survey a year ago, and the due diligence answer gained 14 points.3

Responses to a separate question showed the same bias toward activities earlier in the deal life cycle. The survey asked about transaction-related M&A activities where the board is likely to take the lead. Just over two-thirds (68%) say they approve company strategy and evaluate M&A in that context. That was the highest response, followed by 54% who say the board will assess whether it’s an opportune time for a purchase or sale. The lowest-scoring responses were 32% who say they oversee performance against long-term targets and 38% who report the board is likely to create and guide the company’s long-term vision.

The survey also asked directors about their M&A oversight role. Fully 99% say their boards approve M&A transactions—surely not a surprise—while 86% say the board ensures deals are consistent with existing strategy and 72% say they evaluate the fairness of the deal price. By contrast, just 43% of directors say they establish metrics to measure the success of a deal as part of their oversight role, and 37% say their boards perform a retrospective review, again showing reluctance around oversight of M&A success post-close.

These answers represent a big change from a year ago. The percentage who say the board performs a retrospective review was down by 35 points; the number who say the board establishes metrics to measure success fell 24 percentage points. If attitudes about the need for board involvement in post-transaction assessment efforts vary widely, these answers may be particularly sensitive to who is being asked, and the survey cohort changes year to year.4

In response to a question that asked specifically about board involvement in post-merger integration, 71% of respondents say they hold management accountable for integration strategy. The other possible responses score much lower: just 30% say they review post-merger integration plans, and even fewer (23%) say they oversee post-merger execution.


What explains the shift in this year’s director survey in favor of board oversight earlier in the M&A transaction process? The findings may indicate that boards are generally interested in knowing that the right deals are getting done and are confident in their management teams. If so, boards may be giving less weight to direct involvement or oversight related to deal execution and value creation post-close—and may be giving more attention to the other matters that have climbed higher on the agenda during the pandemic.

Indeed, directors may be of a mind that once a transaction is completed, the acquired operations are integrated with existing business and become part of the ongoing activities of the management team—which the board already oversees in many other ways. The counterargument to that, however, lies in the need to be able to measure the value that M&A activity creates. Without established metrics and appropriate reviews, it may be difficult to know whether management and the board are getting strategy or deal selection right in the first place.

Management’s view

In preliminary analysis from Deloitte’s upcoming M&A Trends report (due out in January), we understand that executives say boards have become less likely to be involved in a range of activities related to M&A transactions. This survey is separate from the NACD-Deloitte board research, and the cohort that is polled is made up of corporate and private equity executives rather than directors.5

Asked about areas in which the board is more likely to lead, rather than management, the M&A Trends respondents cite less of a role for directors almost across the board compared with prior years. Last year, 33% of executives said the board was likely to take the lead in assessing the timing of a deal,6 and this year just 22% said the same. Similarly, the 28% of respondents who said the board might take the lead in assessing whether a transaction was the best use of company resources marks a drop of 10 percentage points.

What might explain this change in executives’ responses in the M&A Trends data? Perhaps as directors report a shift in their M&A role and a narrower focus on the earlier part of the deal life cycle, their management teams perceive this as a lower overall level of involvement. It may also be that competing issues, added to the board agenda due to the pandemic or the attention to ESG factors or other events, have indeed left directors less involved in M&A matters.

M&A and corporate purpose

ESG concerns have been pushed to the fore, presenting risks if mishandled and opportunities if proactively managed. Directors say that ESG topics are now a significant factor in M&A decision-making. While fewer say the same about diversity considerations, here too they report significant attention to the role it plays in M&A activity.

In response to a question about how much of a priority ESG factors are in M&A, 19% of respondents say they are a focused priority or an explicit consideration for boards, and another 43% say they are a moderate consideration. Taken together, that means 62% of directors say they weigh ESG factors in an M&A context, as compared with just 38% who say ESG gets minimal consideration or none.

Asked the same question about diversity, equity, and inclusion (DEI), respondents indicate that it plays less of a role in M&A activity so far. Just 10% of directors say that DEI is a focused priority or explicit consideration, while another 34% say it is a moderate consideration. A majority (56%) say DEI is a minimal consideration or none.


We see the effort to address environmental concerns and diversity issues—and corporate purpose—in the M&A context as an emerging trend. One might expect that management teams and directors first address ESG considerations in the running of existing businesses and only a bit later begin to see ESG as a factor that could define M&A activity. But in fact, these survey results show that ESG has quickly become a front-of-mind matter for boards in their M&A oversight role.

Indeed, the prominence of these issues in M&A is only likely to grow. External reporting on ESG topics is expanding, and attention is rising on environmental impact in particular. European companies already have reporting requirements related to climate change and other issues, and the US Securities and Exchange Commission is giving increased attention to ESG matters.

44% of survey respondents are giving DEI issues consideration in M&A which may indicate increased focus around diversity issues in M&A along with other elements such as good environmental stewardship. The strong endorsement for ESG in the M&A context in general may signal that all the factors under the umbrella will likely continue to gain in importance for management teams and boards.


There are always competing demands for directors’ time and attention, and the topics that rise to the top of the board agenda will change over time. Against this backdrop, it’s clearly interesting—and encouraging—to see the attention being paid to corporate purpose, as reflected in the answers to the survey’s ESG and DEI questions. It is also notable that directors have shifted their attention earlier in the deal life cycle.

Knowing how boards are setting their priorities is a good first step toward evaluating the effectiveness of board oversight. It can help to highlight the topics that matter most while also showing where more attention might be needed to mitigate risks—and to ensure that the board is meeting its responsibilities and supporting opportunities for the company.

End notes

2 Survey conducted October 6 -25, 2021, with responses from 79 directors of US companies representing a cross-section of industries. A majority of respondents serve on boards of companies with annual revenue of $1 billion or more.
3 Survey conducted August 5 -25, 2020, with responses from 165 directors from US companies.
4 Respondents in this year’s survey represented boards of smaller companies, on average, compared with prior years.

Did you find this useful?