The Deal Stakeholder Map: Every Audience It Touches

A transaction stakeholder map lists every audience the transaction touches and records two things about each: what that audience can do about the transaction, and the point by which it must know. The map is the input to a communication plan rather than a version of one, and an audience missing from the map is an audience the plan cannot sequence.

Start with what a transaction actually does to the world around it. Harivansh Packaging Limited is buying the whole of Sundarban Polymers Private Limited, for an equity value of Rs 1,140 crore, and on the morning that completes, a long list of people wake up to a fact that none of them chose. A few of them could have stopped it. Most of them could not have moved it by an inch. Separating those two groups honestly, in writing, before anybody drafts a single announcement, is the whole of the work.

Take it out of the boardroom first. A household decides to sell the shop it has run for thirty years. Ask the household who matters and the answer comes back in about four seconds: the four people who work there, some of them for two decades; the regular customers who have been coming since the shop opened; the cousin who put money in years ago. The affection list is sincere and it is completely useless for getting the sale done. The person who can actually stop the sale is the landlord, whose lease says the shop cannot be transferred without written permission, and the household has not thought about the landlord once. Nobody in that household is being careless. The household ranked the list by affection. Affection is the ranking a human being reaches for, and it has nothing to do with who holds the pen.

A transaction runs on the same fault line, with more zeroes. The record of this one locks three conditions that have to be satisfied before completion: a regulatory approval, the absence of a material adverse change, and consents from two counterparties whose contracts change hands. The record locks the funding as well, being Rs 140 crore of Harivansh Packaging Limited's own cash and Rs 1,000 crore of new borrowing, and the two together make the Rs 1,140 crore paid to the sellers. And it locks the span, twenty two weeks from term sheet to completion, of which the conditions period is the last nine. Every one of those locked facts creates an audience, and two of them create audiences that can stop the transaction dead. A list built from affection will not find them.

Devyani Kulkarni, the chief financial officer of Harivansh Packaging Limited, and Ashwin Rege, who leads the transaction team, are the two people who have to answer for the list being complete. Their discipline has three parts: the reading that produces the list, the arithmetic that decides where each audience sits, and the specific way the exercise goes wrong when it is run as a workshop instead of as research.

What is a stakeholder map, and how is it different from the communication plan?

A stakeholder mapA written list of every group a transaction affects or that can affect the transaction, with a recorded note against each one saying what it is able to do and by when it has to be told. and a communication plan are frequently treated as the same document with two names, and they are not. The two documents answer different questions, they are built by different work, and one of them has to exist before the other can be written at all.

The map answers two questions and stops. Who does this transaction touch, and what can each of them do about it. Answering them is research. The answers come from reading the conditions, reading the register, reading the contracts and reading the funding papers. The answers are sitting in documents rather than in opinions, so two careful people doing that reading independently should produce nearly the same map.

The plan answers a different pair. Who tells each of them what, and when, and through what channel. Answering that pair is judgement, and it belongs with the communication plan and its four fields, worked separately. The plan is a set of choices about sequencing and wording, and reasonable people choose differently, so two careful people will not produce the same plan.

Now put the two in order. The order is the entire point. The plan is written for the audiences the map lists. The plan has no other source of audiences. If an audienceAny group with a shared relationship to the transaction, so that one message drafted once will reach all of them and mean the same thing to each. Employees of one business are an audience; two unrelated counterparties are two. is not on the map, no line of the plan exists for it, nobody is assigned to it, and the first time anybody thinks about it is the moment somebody stumbles into it. Building the plan before the map means the plan gets written for the audiences somebody happened to remember. Such a list is shorter than the real one, and shorter in a predictable direction.

The direction is worth naming. Memory produces the audiences that are emotionally close and the audiences that are institutionally famous: staff, customers, shareholders, the regulator. Memory does not produce the counterparty to a supply agreement signed six years ago by somebody who has since left. The forgotten counterparty is not on anyone's mind, and on this transaction it may be holding one of the two consents that completion depends on.

What are the two axes an audience is placed on?

Two, and choosing these two rather than the familiar pair is what makes the placement checkable. The first axis is what this audience can do about the transaction. The second is the point by which this audience must know.

The familiar pair is how interested somebody is and how much influence they have, arranged in a grid of four squares. The interest and influence grid is a serviceable frame for a project inside a business. On a transaction it fails, and it fails for a specific reason rather than a stylistic one. How interested somebody is has no factual answer. Ask three people in a room how interested the workforce is in this transaction and three sincere numbers come back, none of which can be checked against anything, and the placement then becomes an argument about adjectives that the loudest person wins.

Now ask the other question. Can this audience stop the transaction. The power question has an answer, and the answer is written down somewhere. Either a consent from this counterparty is a condition to completion or it is not. Either the funding of Rs 1,000 crore is committed without further discretion or it is not. Either the record gives this group a vetoThe ability to prevent something from happening by withholding agreement, without needing to persuade anybody. A veto does not require a majority or a good reason, only the right to say no. or it does not. Both axes have factual answers that can be checked against a document. Checkable answers are what turn a workshop exercise into research with a right answer.

The first axis is not a simple yes or no, though, and flattening it to one loses something real. Work it in four rungs, from the top down.

Can stop completion. An audience on the top rung withholds something the transaction cannot complete without, and no amount of goodwill elsewhere substitutes for it. Can slow it or change its terms. An audience on the second rung cannot end the transaction but can extend it, add a step, or force a change in what is agreed. Can change what the buyer ends up holding. An audience on the third rung cannot touch the transaction at all, and can still change the value of the business being bought, by acting on the news in the ordinary course of its own business. Cannot affect completion. An audience on the bottom rung is carried along by the transaction and has no lever on it whatsoever. Having no lever says nothing at all about how much the transaction does to them.

The second axis, by when must this audience know, is a deadline rather than a preference. Some of these deadlines belong to the transaction team and are theirs to choose. Some do not. A consent that arrives after completion is not a consent to anything, so the deadline for telling the counterparties whose consents are conditions is set by the conditions themselves. The deadline for the holders of the listed shares in Harivansh Packaging Limited is set by a disclosure obligation. The obligation belongs to the Securities and Exchange Board of India (SEBI) at sebi.gov.in and is checked there rather than decided in a meeting. Recording which deadlines the transaction sets and which are set for it is half the value of the second axis.

Who are the audiences on this transaction?

Not a template. The list below is built from the record of this transaction, and the reason each entry is there is a specific locked fact rather than a general truth about deals.

The holders of the listed shares in Harivansh Packaging Limited. The promoter and promoter group hold 58.0 per cent, so the free floatThe part of a listed company's shares held by anybody outside the promoter and promoter group, and therefore able to change hands freely on the market. is 42.0 per cent. On 18.00 crore shares that is 10.44 crore shares held inside the promoter and promoter group and 7.56 crore in the float, and at the illustrative Rs 300/- a share carried in this transaction's record it is Rs 3,132 crore of market value against Rs 2,268 crore. The promoter group and the float are two audiences, not one. Different obligations tell them different things, and they can do different things.

The sellers of Sundarban Polymers Private Limited. The sellers are a counterparty rather than a bystander, and until the day they sign they can simply decline the whole thing.

The employees of both businesses. Two audiences again, and they are separate because the message is separate: one workforce is being added to, and the other is being bought.

The two counterparties whose contracts change hands. Their consentWritten permission from somebody outside the transaction, required because a contract they signed says their agreement is needed before the thing being done can be done. is written into the record as a condition to completion. One clause in a contract places them above everybody else on the first axis, and no judgement about their importance went into it.

The lenders funding the new borrowing. Rs 1,000 crore of the Rs 1,140 crore paid to the sellers comes from them, or 87.7 per cent of the price. Harivansh Packaging Limited's own cash of Rs 140 crore covers the remaining 12.3 per cent, and nothing else in the record covers anything.

The authority whose approval is a condition. Which approvals attach to a transaction of this kind, and what they require, is set by SEBI at sebi.gov.in and by company law administered by the Ministry of Corporate Affairs at mca.gov.in. The record locks one thing about the authority. An approval is one of the three conditions, and one locked condition is enough to place the audience.

The customers both businesses already serve. Here is the entry that separates a real map from a template, and it is worth stopping on. The shared customers are on this map because of a specific fact about these two businesses, that Sundarban Polymers sells to some of the same customers as Harivansh Packaging, and not because customers appear on every stakeholder map ever drawn. That overlap is the reason the transaction exists at all. The overlap is also the reason a customer who hears about it early can do something no other powerless audience can do. A shared customer can quietly spread its purchasing across a second supplier before anybody has announced anything, and reduce the value of exactly what is being bought.

Nine entries, then, and the placement of each one traces back to something written down: a register, a condition, a funding line, or a fact about who buys from whom.

Which audiences hold a veto, and why are they a different kind?

Four entries on that map sit on the top rung, and grouping them with everybody else is the most expensive mistake available on a stakeholder map. The four are the two counterparties whose consents are conditions, the authority whose approval is a condition, the lenders whose Rs 1,000 crore is 87.7 per cent of the price, and the sellers, who can end the whole thing by declining to sign right up until the moment they do sign.

The four are not a different kind because they are more important. The relationship with them is not a communication relationship at all. A veto holder is not an audience to be informed, it is a counterparty to be managed, and the difference shows up in who is assigned to it, what is asked of them and what a good outcome looks like.

Sit with the practical difference for a second. The difference is not abstract. For an audience to be informed, the transaction team drafts a message, chooses a moment, sends it and records that it went. Success is that the message was received and understood. For a counterparty to be managed, somebody senior is assigned, a request is made, terms may be discussed, and success is a signature on paper. Success for the first is that they know. Success for the second is that they agree. The two are different jobs with different owners and different failure modes, and a single list that mixes them together will get the first one done for both.

Mixing them is exactly how a transaction reaches the middle of its conditions period having diligently sent progress updates to a party it should have been negotiating with for two months. Nobody was negligent. The party was on the list, the list said the party should be kept informed, and the party was kept informed. The list never said that this particular party could refuse.

The lenders are the entry a reader is most likely to place too low. The temptation is to treat a funder as a service provider who has already said yes. Run the arithmetic instead. The price paid to the sellers is the Rs 1,140 crore equity value, being the Rs 1,320 crore enterprise value less the Rs 180 crore of net debt sitting inside Sundarban Polymers Private Limited. Against that Rs 1,140 crore, Harivansh Packaging Limited brings Rs 140 crore of its own cash, or 12.3 per cent. The other Rs 1,000 crore, 87.7 per cent, is new borrowing at a contracted 9.0 per cent, and the borrowings of Harivansh Packaging Limited move from Rs 740 crore to Rs 1,740 crore as a result, a rise of 135.1 per cent. An audience providing 87.7 per cent of what is being paid is not a service provider, and the map records that with a number rather than with an adjective.

Which audiences turn up late, and what makes them late?

Every transaction that discovers an audience halfway through discovers the same species of audience. The late audience is never the workforce and never the shareholders. The late audience is a party whose power sits inside a document that nobody in the room has read.

Three shapes account for most of them. A change of control clauseA term inside a contract saying that if the shares in one of the signing companies pass to a new holder, the other side may end the contract or must first give its written permission. in a supply agreement turns an ordinary trading relationship into a consent that has to be asked for. A consent buried in a lease stops the building the target operates from passing across without the landlord agreeing. A joint arrangement partner holding a right of first refusalA term giving somebody the chance to buy something on the same terms before it can be sold to anybody else, so a sale cannot simply proceed past them. means the transaction may have to be offered to that partner first.

Notice what those three have in common. Not one of them is discoverable by asking the transaction team who matters. All three are discoverable by opening a filing cabinet. The audiences that arrive late are the ones whose power was written into a contract years earlier by people who are no longer in the room, and the only way to find them is to read the contracts.

Which is one of the things confirmatory diligence exists to do. A diligence findingSomething discovered while examining the target's papers that changes what the buyer knows, and therefore may change the price, the conditions or the drafting. is usually thought of as a risk item, a number to be adjusted or a liability to be covered in the paper. A diligence finding is also an audience generator, and treating it as one changes who reads the diligence output. If the only readers of a contract review are the people pricing the transaction, the audiences hiding in those contracts are found only when somebody trips over them.

Compare it with the household selling the shop. Ask them who matters and the landlord never comes up. Ask them to bring every document that has a signature on it, and the lease appears in the first five minutes, with the transfer clause on the third printed side. Same household, same shop, different question. The fix is not a better meeting, it is a different source: build the map partly from the contracts rather than entirely from memory, and make finding the veto holders a diligence task with a named person answering for it.

How does the map change as the transaction moves?

The map changes, and it changes in a way that is predictable enough to schedule. An audience can acquire power it did not have, and another can lose power it held from the beginning, and both of those things happen on the same day.

Take the two counterparties whose consents are conditions. During confirmatory diligence they hold nothing. The two counterparties are parties to a contract with Sundarban Polymers Private Limited, and nobody has told them the transaction exists. At signing, their consent becomes one of the three conditions to completion, and in that moment they acquire a veto. Nothing about them changed. A document they never saw is what changed.

Now take the sellers, moving the other way on the same day. Up to signing the sellers can walk away from the whole transaction. Walking away is the most complete power anybody on this map holds. Once they have signed they are bound by what they signed, and their entry drops several rungs. The map at week 12 and the map at week 14 are different maps, and week 13 is where the swap happens.

So the map is a live documentA document that is expected to change during the work it supports, and is deliberately revisited at set moments rather than written once and filed. rather than a workshop output. A map fixed at the start describes a transaction that has since moved, so the map is reviewed at each milestone. The milestones are the natural review points and there is no need to invent others: approach and confidentiality, indicative offer and term sheet, confirmatory diligence, documentation, signing, the conditions period, completion.

Two of those reviews earn their place more than the others. The review after confirmatory diligence earns its place. By then the contracts have been read and the hidden audiences are findable. The review at signing earns its place as well. Signing is when vetoes change hands.

What does a map organised by importance get wrong?

Almost everything, and it gets it wrong in a consistent direction. A consistent direction is what makes the error worth naming rather than just avoiding.

Importance is a judgement about how much a group matters to the business. Importance is a real thing and it belongs in the business. Importance has no connection whatsoever to whether a group can stop a transaction. Once that sentence is accepted, the standard failure becomes obvious. The most important audience on nearly every map anybody draws is the shareholder body. On this transaction the shareholder body cannot stop anything the record describes, and the audience that can stop everything is a counterparty most people would not have listed at all.

Be precise about the shareholders. The distinction here is real and easy to overstate. The holders of the 42.0 per cent free float in Harivansh Packaging Limited are, on the illustrative Rs 300/- a share carried in this record, holding Rs 2,268 crore of market value, against Rs 3,132 crore held inside the promoter and promoter group. The numbers are large and the holders are real people. The record of this transaction locks three conditions to completion, and none of the three is a vote of the shareholders. Whether any approval or disclosure is required of Harivansh Packaging Limited as a listed company, and when, is set by SEBI at sebi.gov.in and by company law administered by the Ministry of Corporate Affairs at mca.gov.in, where the current text is published. The map records what the record locks. The shareholders are an audience with a timing obligation set outside the transaction, and not one of the three conditions runs through them.

Set that against the counterparty holding a consent. The counterparty may be a modest business with a supply agreement, an entry on a schedule nobody reads, and no shareholding in either company. The same modest business can stop the whole thing. Rank the map by importance and it appears near the bottom, if it appears at all. Rank it by what each audience can do and it appears first.

The inversion runs the other way too, and this half is the more human one. The employees of both businesses have the most at stake of anybody on the map, by a wide margin, and they can do nothing at all about the transaction. A single axis conflates that with power and mislabels them either way: rank them by stakes and the map says handle them like a veto holder, rank them by power and the map says they barely matter. Both readings are wrong. Two axes keep stakes and power apart, and keeping them apart is precisely what two axes are for.

What does the map of this transaction actually look like?

Build it properly, one row at a time, with the reason in the row. The table below is the deliverable, and it is a table rather than a diagram because it has to be read, argued with and updated by people who were not in the room when it was drawn.

Now read it. A map that is filed without being read has done nothing. Two readings come out of this table and neither of them was available before it was built.

The first. The audience with the most power on this transaction is a counterparty most people would never have listed. The counterparty is not large, it is not famous, it holds no shares in either business, and its consent is one of three things standing between this transaction and completion. If Ashwin Rege's team had built the list from memory in one meeting, that entry would not be on it.

The second. The audience with the most at stake, by any honest measure, is the workforce of Sundarban Polymers Private Limited. Their employer is changing hands. The workforce has less power over the outcome than anybody else in the table, including a customer who may not even have noticed. A map organised by who matters would have inverted both of those readings, putting the powerless at the top and burying the entry that can stop everything at the bottom.

One more reading, quieter than the other two. Look down the last column. Every answer in it points at a document. A pointer to a document is the test of whether a map has been built or merely composed. If a row's justification is a sentence about how significant somebody is, that row has not been researched yet.

Finally, the honest gap, and it matters more than it looks. The record of this transaction does not name the two counterparties and does not name the authority. So the map places them by function, as the holders of the two consents and as the grantor of the approval. A made up name looks researched and is not, so a map carrying one is worse than a map with a functional description. Where the record is silent, the map states the audience's function and leaves the name blank for somebody who can fill it in from the papers.

How does a lender, an analyst or a household read this?

Three readers, three different first questions, and none of them is asking what the transaction team is asking.

A lender reads the map as a list of the things that can stop it getting its money out again. The Rs 1,000 crore it is being asked to advance turns into borrowings of Rs 1,740 crore at Harivansh Packaging Limited, against Rs 740 crore before, and leverage on the acquirer's own earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 477 crore moves from 1.26 times to 3.65 times. On the combined position, net debt of Rs 1,920 crore over combined EBITDA of Rs 609 crore is 3.15 times. Its first question about the map is not who is important. A purchase that half completes is the worst outcome on the lender's sheet, so its first question is which of these audiences can prevent the business it is lending against from ever coming together.

An analyst covering Harivansh Packaging Limited reads the map as a probability question and a timing question at once. Four entries can stop completion. The analyst cannot see the consents, cannot see the approval and does not set the timetable, so what the map gives is the shape of the risk rather than its size: this transaction turns on parties outside it, and the nine week conditions period is when that is settled. Combined revenue of Rs 4,060 crore against Rs 3,180 crore standalone is the prize; the map is the list of things standing in front of it.

Devyani Kulkarni reads it as a workload and an assignment sheet. Four counterparties to be managed, each needing a named senior person and a live conversation. Five audiences to be informed, each needing a message and a moment, all of it the communication plan's job rather than hers to redo. Her instinct, and it is the right one, is to check the last column of the table before anything else. A row justified by a document is a row somebody has actually done the work on.

And the household version of all this, the same reflex without the vocabulary. Before agreeing to sell the shop, the household walks the papers rather than the memories. Who has signed something that lets them say no. Who has lent money against it. Who has a key. The paper list is short, it is checkable, and it is not the list anybody would have written from the heart.