Why Some CFOs Make Better M&A Deals
Many companies fall into the trap of paying an excessively large premium to close an acquisition. The authors analyzed nearly 2,000 acquisitions by U.S. companies over a period of more than 20 years and found that companies were less likely to overpay if their CFO had certain characteristics that allowed them to wield greater influence in strategic decision-making. Those common characteristics are markers of informal power based on a CFO’s breadth of skills, relationships, and status.