Columns
- The Board’s Strategic Role in Operationalizing Innovation
- When AI Algorithms Control Earnings Reactions
- Point/Counterpoint: To Go Public or to Stay Private?
- Why Mergers Fail When Strategy Is 'Right'
- Transforming Governance into a Growth Strategy
- How the Board Can Get the COO Position Right
- Beyond ROI: A Conversation with Purvee Kondal
- Onboarding
Director Advisory
- Human Capital Governance and the Compensation Committee’s Remit
- Strengthening Board Engagement as Volatility Tests Strategy
- Four Overlooked AI Signals Every Director Should Watch
- A Mid-Cycle Guide for Compensation Committees
-
How Boards Influence Successful Carve-Outs
- The Hidden Costs of CEO Succession
- Governing the Convergence of AI and Cyber Risk
Directorship Magazine
How Boards Influence Successful Carve-Outs
Key Points
- Value in a carve-out is often lost in the months leading up to the deal due to compressed timelines and a lack of operational preparation.
- Boards should challenge management on deal perimeter clarity and the true run-rate costs required for the divested business to operate independently.
- A credible transition plan serves as a vital pricing lever that reduces buyer scrutiny and prevents value leakage.
This AI-generated summary, based on content on this page, was reviewed by NACD editors for accuracy.
Speed is often mistaken for efficiency in corporate divestitures. However, for many middle-market carve-outs, a compressed timeline without rigorous preparation does not create value; it simply shifts it to the buyer. While management teams and advisors focus on the mechanics of the transaction, boards have a unique opportunity to act as the ultimate safeguard of shareholder value by engaging long before the course is set.
This article outlines how directors can apply pattern recognition and sound judgment to bridge the gap between internal assumptions and market reality. From accelerating the exit of transition service agreements to ensuring the business is truly "ready to sell," learn how early board intervention transforms a standard carve-out into a strategic success.
Thank you for your interest in this page.
Member-Only Content
For full access, please log in, or explore membership options.
Scott Barcroft, CPA, is a partner in RSM US LLP’s Deal Services practice, where he advises clients on buy- and sell-side transactions, financial diligence, and operational considerations that inform strategic decision-making.
RSM is a NACD partner, providing directors with critical and timely information, and perspectives. RSM is a financial supporter of the NACD.
Explore All Directorship Issues