Tips and Answers to Your Questions
The Negotiations Process

Communicating with your Board During the Negotiations Process

Typically only a subset of your board will participate directly on the partnership negotiations committee. Such an approach makes for a much smoother negotiation process, as it leads to a more manageable committee size, fewer personalities and opinions to juggle during the discussions, easier scheduling, and more consistent attendance at meetings. Of course, when choosing each organization's representatives to the negotiations committee it is important to ensure that they fairly represent the feelings and wishes of the board as a whole.

As the negotiation progresses, the members of the negotiations committee will begin to buy in to the process, and will come to a series of agreements about how to resolve the issues and questions raised. In the end, they will usually come up with a final agreement that reflects the results of the negotiations, and a recommendation for how to move forward. However, neither the committee nor its members has the authority to make the merger or other type of strategic restructuring happen. The members must take the recommendations back to their entire boards, and each board must vote on the proposed course of action. This is where it can get tricky. The other members of the board have not lived through the negotiation process, so have not necessarily bought into it. They may not understand how decisions were made, and will have many questions regarding the decisions that were made. This is natural; an organization they care about, and for which they are responsible, is going to change.

To minimize this type of uncertainty at the board level, it is extremely important that communications between the negotiations committee members and their boards be open and constant. When the representatives to the negotiations committee are chosen, make sure everyone on the board understands how the process works - that they will be meeting with members of the other organization's board and will be making decisions as a committee that will be recorded in meeting minutes. These minutes will eventually become the Terms of Agreement if and when a final agreement reached. Ideally, after each negotiations committee meeting the boards will meet individually to discuss the decisions made to date and any new questions that have arisen. This is not always practical or possible, however. At minimum, the entire board should receive copies of the minutes. If a full board meeting to review them is not possible, a good alternative is for the members of the negotiations committee to call the other members of their respective boards to check in, update them on how the meeting went, and answer any questions they might have. By ensuring that everyone understands what decisions have been made to date, the committee members make it more likely that the final approval process will be a smooth one.

Finally, at the meetings where each organization's board will vote on whether or not to move forward with the merger, asset transfer, etc. (approval of the Terms of Agreement, in other words), have the members of the negotiations committee take the time to describe the negotiations process before the Terms are discussed. This will help the other board members understand the trust and respect that has developed between the two organizations throughout the process.