Governance Guru: How can my board effectively manage a merger?

The process involved many of the same elements as a merger: navigating legal and regulatory requirements, developing a fit-for-purpose constitution and policies, negotiating with the auspice agency over finances, and engaging staff and members in shaping new governance and operational structures.

What anchored us through all that complexity was a shared commitment to our purpose and values. But I’ll be honest, at the time it felt more like flying by the seat of my pants than a well-planned strategic process. We got through it, but not without some avoidable missteps.

Organisational change, especially something as complex as a merger or acquisition, really can’t be left to improvisation. That’s why it’s essential for boards to take the lead with a clear, strategic approach.

When I first encountered Knoster’s model for managing complex change during my Diploma of Governance with the Institute of Community Directors, it was a lightbulb moment. Suddenly, I could see exactly where I’d gone wrong and why there had been confusion, resistance, stress and frustration. The model laid it all out so clearly.

Knoster’s model is a powerful framework for navigating a change such as a merger. It ensures you’re not just ticking compliance boxes, but also managing culture, communication and capacity. Let’s break it down in the context of not-for-profit mergers.

Vision

You need a clear and compelling vision that explains why the merger is happening and what the future organisation will look like. Without this, confusion will quickly take hold.

This is especially important for NFPs, where mission matters deeply. The new vision must show how the merger will strengthen that mission and build on the legacies of both organisations. If the alignment isn’t obvious or well communicated, you risk losing the support of key stakeholders, especially staff and members.

Boards should prioritise regular, transparent communication and get people involved in meaningful ways to build buy-in even when tough changes, such as redundancies, are on the table.

Skills

Successful change needs the right mix of skills, both in-house and external. Clearly communicating how you’re addressing skills gaps helps reduce anxiety.

A combination of staff and board training, plus bringing in external expertise, sets a merger up for success. Legal, financial and HR know-how are essential, but so are governance, risk management and conflict resolution capabilities.

It’s often wise to form a merger working group or advisory group, made up of board members, staff and independent experts. This helps keep the organisation’s focus on strategy, mission and vision, rather than getting bogged down in personal losses or legacy responsibilities.

Incentives

Boards must go beyond the big-picture benefits of the merger and consider the personal impact on individuals. Support for the change is more likely when people see what’s in it for them, whether that’s greater community impact, new opportunities, or longer-term sustainability.

But it’s equally important to acknowledge fears, such as job losses, changes in leadership roles, or a loss of organisational identity. Open and honest communication can help reduce resistance. Not everyone will stay on post-merger, but feeling included in the process helps people feel respected and reduces friction.

Resources

Let’s be honest: when NFPs merge, it’s not because they’re overflowing with resources. But a lack of resources can’t become a reason to skip planning or withhold support.

Mergers need investment: financial, human, legal and technical. You’ll need flexible plans, contingencies and expert advice. Talk to other organisations that have gone through mergers. And make sure your funders are on board, because they need to understand how their support will be used during and after the transition.

A well-resourced plan reduces frustration for everyone involved.

Action plan

A merger needs a clear, coordinated action plan with defined responsibilities, timelines and contingencies. This should cover:

• governance transition
• legal and structural changes
• stakeholder communication
• financial audits and reporting.

Consistency in leadership is also crucial. You don’t want the process derailed by a sudden change at the top. Make sure continuity is part of your planning.

Throughout the implementation, keep people in the loop. Share elements of the action plan when appropriate. Transparency builds trust.

Mergers are complex and go well beyond everyday governance and operations. That’s why Knoster’s model is such a helpful starting point – it prompts the right conversations and keeps you focused on the big picture.

Use it as a diagnostic tool to track your progress and troubleshoot along the way. With thoughtful planning, clear communication and purposeful leadership, you can manage change in a way that honours your mission and maximises your future impact.