01
Time Horizon
Do they think in quarters or decades?
Whether executive incentives, capital allocation, and planning practices support value creation across multiple periods or prioritize extraction in the current period.
Pre LOI Governance Diagnostic
Identifying Change Absorption and Integration Risk Before You Commit Capital
Acquisition underwriting is highly developed in finance, tax, and commercial diligence. SGI measures the one source of risk after closing that remains unmeasured: whether a target organization can actually absorb the changes required by your investment thesis. Designed for lower middle market acquirers using standard pre LOI materials without slowing the deal.
Request Early Access70 to 90%
M&A Underperformance
Deals that fail to meet expectations after closing (Wharton studies).
60%
Governance & Culture Alignment
Failures after closing directly traced to unmeasured governance misalignment.
>$5M
Value Lost
Destroyed in nearly 1 of every 4 misaligned acquisitions.
The Material Risk
One material risk remains unmeasured before capital is committed.
A target may have credible financials, capable managers, attractive customers, and a sound market position. After closing, however, the organization may defend legacy arrangements, delay new operating discipline, retain informal veto points, or select leaders who preserve the prior model.
This is not simply a generic culture problem. It is a governance problem: how the organization allocates attention and capital; how leaders interpret problems; how it selects successors; and whether it recognizes the interests and power relationships that can block change.
The Four Dimensional Profile
A four dimensional profile, not a single composite rating.
The dimensions are independently scored because an organization can be strong in one area and fragile in another. That pattern, not an average, is what matters in an acquisition.
02
Decision Range
Do they look at problems from multiple perspectives?
Whether leadership brings genuinely different strategic lenses or reproduces a single dominant worldview through similar backgrounds and habits.
03
Advancement Culture
Do they hire the same type of executive over and over?
Whether hiring, promotion, and succession patterns create adaptive capacity or repeatedly reinforce existing institutional logic.
04
Power Aware Design
Critical Gate
Do they acknowledge where informal power sits?
Whether leadership identifies formal and informal sources of blocking power and designs change initiatives around stakeholder interests and decision rights.
Why Four Scores Matter
A single score hides the shape of governance risk.
A 5/5/1/5 profile and a 4/4/4/4 profile can produce similar averages, but they represent very different operating realities. SGI does not collapse those realities into a misleading composite number.
Profile A
5 / 5 / 1 / 5
Time Horizon
5/5
Decision Range
5/5
Advancement Culture
1/5
Power Aware Design
5/5
High strategic capacity, but constrained by leadership that reproduces itself.
Profile B
4 / 4 / 4 / 4
Time Horizon
4/5
Decision Range
4/5
Advancement Culture
4/5
Power Aware Design
4/5
Balanced adaptive capacity across all governance dimensions.
Application & Use Cases
Four moments where authority changes hands.
PE & Strategic M&A
Diligence before the deal sitting alongside financial, legal, and operational workstreams.
Lender Diligence
Assessing governance risk in a credit before capital is extended.
Family Business Succession
Testing whether the organization was built to outlast the founding leadership.
Board Self Assessment
A candid evaluation of board capacity ahead of major leadership transitions.
Director & Acquirer Access
Will this target's governance culture enable the changes your investment thesis requires, or absorb, delay, or neutralize them?
Early access is limited to active PE acquirers, search fund principals, and transaction advisers.