Management due diligence

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Management Due Diligence is the process of evaluating the executives who make up the senior management team(s) prior to the close of a business deal that involves integrating the functions and cultures of two or more companies. The process is also known as management assessment.

Before going forward with a deal, firms conduct extensive due diligence in the areas of legal and finance, and some also deal with than talent management.

Five key questions the management due diligence process covers are:

  1. Will this management team be able to execute our growth strategy?
  2. Will the organization’s culture support the objectives or get in the way?
  3. How can we accelerate management’s ability to execute the investment thesis?
  4. Which players do we keep? Who needs to go?
  5. How will this management team partner with us?

Sources and references[edit]

  • Lajoux, A.R., & Elson, C.M. (2000). The Art of M&A Due Diligence. New York: McGraw-Hill
  • Bond Gunning, A. (Ed.). (2007) “Human Capital in Private equity.” London
  • Harding, D., & Rouse, T. (2007, April). “Human Due Diligence,” Harvard Business Review, 85(4).
  • Astorino, D., (2009). “Five Roadblocks to Successful Acquisition Integration,” Executive Insights, 24(2).
  • Popp, Karl Michael (2013). Mergers and Acquisitions in the Software Industry - foundations of due diligence. Norderstedt: Books on demand. ISBN 978-3-7322-4381-5.