Risk and Compliance In M&A

When a company is entering into possible merger or acquisition, a risk and compliance team should have a seat at the table starting with the earliest exploratory conversations, says this post by the COO and president of NAVEX.  A good R&C team, he says, will be primed to uncover potential compliance issues related to such things as violations of anti-bribery laws and health and safety issues, as well as the quality of the potential deal partner’s own risk management program.

“Don’t take my word for it,” he says, noting this imperative recently become part of an updated DOJ guidance. A company’s compliance program, says the guidance, “should include comprehensive due diligence of acquisition targets, and should include a process for timely and orderly integration of the acquired entity into existing compliance program structures and internal controls.”

One practical tip: Look carefully at the company’s hot line data to see what’s been flagged and how it was handled, in particular with regard to potential Environmental, Social, and Governance (ESG) issues.