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Dial M for Merger

Published: 15/06/20 | Categories: Author: Judi Rhys

Judi Rhys, CEO at Tenovus Cancer Care and former CEO at Arthritis Care, shares her views on merger and the ingredients that are essential to a successful merger

It’s a shame that it often takes a crisis before charities start using the ‘M’ word. And it’s a sign of these critical times that the topic of collaboration and merger has been brought up so often during the many webinars and online roundtable discussions I have joined in recent months.

There have been a number of high profile mergers in the health charity sector over the past few years – Breast Cancer Now (itself a product of the merger of Breakthrough Breast Cancer and Breast Cancer Campaign) and Breast Cancer Care, British Lung Foundation and Asthma UK, and the merger that I instigated between Arthritis Care (where I was CEO) and Arthritis Research UK to form Versus Arthritis.

They have all been achieved from a position of strength and for strategic reasons, where the merger partners have recognized the synergy of purpose and the improvements that merger can bring. Improvements such as reaching more beneficiaries, pooling research efforts, increasing public profile and reducing costs and duplication.

Healthy competition

Around 29,000 charities registered with the Charity Commission define their core aim as ‘the advancement of health or saving of lives’.

It has long been the case that some of the most visible and high-profile charities in the UK are those involved in research, campaigning or support for medical conditions.

Medical research charities are an area that can be particularly ripe for mergers. Why would charities with similar missions in this space have to compete directly for donors? They may be duplicating research efforts if they work separately, rather than collaborating for better use of resources.

Of course, ‘merger’ and ‘acquisition’ are private sector terms, and come loaded with notions of power struggles, hostility and takeover.

But there is in truth no such thing as a hostile takeover in the voluntary sector, and the route to merger, and reasons for it, are very different.

Bigger, better and different

In my case, it was a desire and a strong conviction that the best thing for our beneficiaries was to bring research and support together.

This was something that the founder of Arthritis Care, a Welshman called Arthur Mainwaring-Bowen, had long hoped for, and it was a particular delight that his widow lived to see this come to fruition.

This was a transformational merger driven by a compelling vision to be ‘bigger, better and different’, to do more for the core beneficiaries of both predecessor organisations, and raise general public awareness of the 17.8m people affected by arthritis and related conditions.

My personal vision was to strengthen my charity and scale up activity. I knew that both policymakers and beneficiaries sometimes found the distinction between the two organisations confusing, and when we did seek to collaborate, sharing of research and intellectual property was problematic.

The negotiation process

My discussions and research around a potential merger began in February 2017, with initial conversations between the Arthritis Research UK chief executive and myself.

Both our charities had recently taken on new chairs, which brought a fresh dimension to the discussions, and a working group was formed including the CEOs, chairs and one additional trustee from each side.

We considered a full range of options, including forms of partnership and collaboration short of full merger. We then quickly moved towards testing the potential benefits of full merger.

In April that year, we consulted with the full trustee boards of both charities, with a provisional agreement to merge reached in May. This led to deeper due diligence, which found that both charities were financially stable, and we reached a final agreement to merge in July.

Dealing with ‘loss of empire’

It can be very hard to convince people that the merger is about the charity, its beneficiaries and fulfilling its aims.

I knew it was important to overcome the natural feelings of anxiety and scepticism, and that this would not happen without planning and organisation.

So, we kicked off a consultation campaign to explain the merger, which included visits to our local branches, whole-team ‘floor meetings’ in the offices of both organisations and senior staff members from both sides working in each other’s offices on certain days of the week.

My charity’s stakeholders approved the merger at an AGM, which we ran without Arthritis Research UK’s involvement.

This all helped to bring both sides together, and in particular to ensure that Arthritis Care’s staff, trustees and volunteer networks could feel the merger was an opportunity to increase their reach in a new organization, and to work through those feelings of vulnerability and ‘loss of empire’.

It’s well documented that ego, self-interest and the desire to preserve autonomy has scuppered merger discussions previously. Yet, no charity has an intrinsic right to exist. It was important throughout this process to demonstrate selfless leadership and to answer questions openly and honestly.

I made an early decision not to put myself forward for the CEO role, and that definitely removed one of the barriers that has thwarted other merger attempts.

Leading by example

Leading a merger in the voluntary sector is not for the faint hearted. It requires a forensic attention to detail, communication skills of the highest order and relentless focus.

The prize, though, is a stronger organisation, better placed to deliver the mission and make the difference for our beneficiaries that we all desire. I’ll take that over preserving the status quo any day of the week.