2015 was a big year for Mergers & Acquisitions with high profile corporate deals as Pfizer-Allergan, Anthem-Cigna, ACE-Chubb, and many more. 2016 looks to continue this trend, especially in Life Sciences and Healthcare, as pharmaceutical companies aim to improve their pipelines and portfolios and health insurers make use of current low interest rates to pursue competitive advantages through M&A. Besides traditional M&A, divestitures - such as Zoetis spun off from Pfizer in 2013 - and asset swaps - GlaxoSmithKline and Novartis in 2014, Boehringer Ingelheim and Sanofi in 2015 - have also been popular for big pharma in recent years.
Get a head start on merger madness with four things to keep in mind when faced with Mergers, Acquisitions, and Divestitures from a Records & Information Management perspective:
Create MAD Checklists
Have checklists ready before a Merger, Acquisition, or Divestiture (MAD). One checklist should focus on the Records & Information Management (RIM) program and feature a description of the decision/question.
- How recently have records retention schedules been updated?
- Are there any legal holds on necessary incoming records from the acquired organization?
- Who on the RIM team is responsible for resolving the issue, target dates for completion of these tasks, and any comments or concerns.
The records checklist is an itemization of records types that will assist with determining records to be given/taken, especially important for an asset swap or divesture) and classification mapping for storage and retrieval. This checklist should include the original records owner, format of the records, where stored, etc.
After you have a plan in place, you can add dates and tailor tasks to any specific issues you face once a MAD happens. A MAD can pop up while you are busy with other Records & Information Management (RIM) challenges. Be prepared by having checklists you can follow to save time, money, and energy. Update your checklists after a MAD as you learn what worked and what didn’t to fine tune your processes for the future. RIM MAD checklists will enable you to get started as soon as possible, reduce risks, use repeatable strategies, and minimize disruption during integrations.
Have a strategy for combining RIM programs following a merger.
Records & Information Management programs will need to be integrated following a merger. Try to get involved as early as you can. This is often difficult as must you wait until the merger is approved and RIM is usually brought in later.
Pre-merger discussions between Records Managers on topics such as technologies used or number of employees should be fine but check with your legal department if you have any questions about what can be discussed. Your strategy should include an assessment of the incoming RIM program. This will allow you to determine strengths, weakness, and where alignment is needed or improvements can be made. Knowing what technologies and vendors the acquired company uses will enable you to move forward with your integration strategy - consolidate RIM software, compare current contracts for offsite records storage, etc.
An acquired company may not have a formal RIM program. Records analysis and classification/retention mapping will be more difficult as you’ll have to go in without a guide and work directly with records creators and staff. This can be even more challenging when employees from the acquired company leave or are let go as it creates a knowledge vacuum.
Know when and how to receive and divest records.
Work with Legal and Privacy to redact PII and sensitive information from records that need to be divested. You should only divest records/PII when necessary. This not only avoids giving up a competitive advantage but also mitigates the risk of sensitive records being subject to a data breach after a divesture. Don’t just take all records offered to you. Make sure you know what physical and electronic records you’re bringing in, how you’ll be able to find these records (classification), and how long you’ll need to keep them (applying retention).
GARP is your guide through MAD.
RIM challenges do not change during a MAD. ARMA International’s Generally Accepted Recordkeeping Principles® are intended to set forth the characteristics of an effective information governance program and form the basis upon which every effective information governance program is built, measured, and judged. The Principles were designed to be flexible no matter the unique circumstances of an organization’s size, sophistication, legal environment, and resources. Keep the principles in mind when doing any MAD activity such as creating checklists, developing a MAD strategy, mapping classification/retention, divesting/receiving records, etc. Every action you take should be in support of one of the Principles (Accountability, Integrity, Protection, Compliance, Availability, Retention, Disposition, Transparency).
MAD can be a tough time but also an opportunity to test your RIM program’s abilities during an integration, assess the tools, policies, and procedures of other RIM programs involved with your MAD, enhance your RIM program, and improve your own RIM skills.
ARMA International and the Generally Accepted Recordkeeping Principles®
ARMA International (www.arma.org) is a not-for-profit professional association and the authority on information governance. Formed in 1955, ARMA International is the oldest and largest association for the information management profession with a current international membership of more than 10,000. It provides education, publications, and information on the efficient maintenance, retrieval, and preservation of vital information created in public and private organizations in all sectors of the economy. It also publishes Information Management magazine, and the Generally Accepted Recordkeeping Principles®. More information about the Principles can be found at www.arma.org/principles.