Two CEOs and zero incentives don’t make a merger, conference warned

Mergers and acquisitions would be more common in the third sector if CEOs were given the sort of parting packages that are common in mainstream business, said a leading social entrepreneur yesterday.

Craig Dearden-Phillips, CEO of Speaking Up, which is itself in the final throws of a planned merger with Advocacy Partners, told a conference on mergers and acquisitions that there was little incentive for CEOs to plan mergers which might lead to their own redundancy.

Dearden-Phillips said: 'With our merger one of us is on our way and leaving with nothing, but you have to go beyond your own interest, and your family's interest, and your kids, and perhaps we should be saying to CEOs that we will give them some help to get their new career going.

'The problem is CEOs and boards are wholly unincentivised to merge,' said Dearden-Phillips.

He was backed up in his view by Karin Pappenheim, acting director, work and lifelong learning, at the Shaw Trust.

She said: 'I do think there should be some support for CEOs because compared to the private sector we don't have the incentives to do mergers.'

Fay Selvan, CEO of The Big Life Group, said offering a package of support would remove one of the obstacles to mergers in the third sector.

'I don't see why social enterprises should be different to the private sector and that would take away one of the obstacles,' said Selvan.

Earlier in the day the conference heard from Neil Goulden, executive chairman of the large multinational Gala Coral, who said one of the main reasons mergers failed was because 'two Jags don't fit in the same parking spot'.

Dearden-Phillips said: 'Our Ford Fiestas will fit in the same parking spot for a bit but eventually one will have to go into the horizon.'