70 to 90%
of M&A deals underperform expectations
Multiple academic and consulting studies, via Wharton
The Solon Governance Index
Measuring the Governance Capacity of a Company Before You Buy It
Gregory Sparzo, Founder & CEO, Solon Governance Index, Inc.
The Gap
Due diligence tells you what a company has done. It says almost nothing about what its people will do.
60%
of failures after closing trace to cultural and governance misalignment
Directors & Boards
>$5M
in value lost in nearly 1 of every 4 misaligned deals
Directors & Boards
No instrument that exists can predict the likely outcome of a prospective and complex deal using information already available in the deal room. SGI fills that gap.
The Fourth Lens
A fourth lens alongside financial, legal, and operational diligence.
- Financial DiligenceStandard practice
- Legal DiligenceStandard practice
- Operational DiligenceStandard practice
- Governance Diligence: SGIThe fourth lens
The Solon Governance Index is a structured, evidence based assessment of the governance capacity of a target company's board and senior leadership, conducted before a transaction closes.
It does not ask leadership to describe itself. It asks what the organization's own records and decisions demonstrate over years of operating history: whether authority is distributed or concentrated, whether change is absorbed or resisted, whether power is accountable or not.
The Four Dimensions
Four dimensions of governance behavior.
01
Time Horizon
Do decisions build lasting institutional strength, or extract immediate value at its expense?
02
Decision Range
Is authority and information distributed through the organization, or concentrated in one or two people?
03
Resistance to Change
Does the track record show completed change and lessons learned, or quiet resistance that stalls it?
04
Power Aware Design™
Critical Gate
Can bad news travel upward safely? Is control accountable, or does one person's exit unwind everything else?
Why No Single Score
A single score hides exactly the risk a buyer needs to see.
The Tempting Shortcut
82
One blended number. Strong capacity elsewhere quietly absorbs a severe, unaccountable power divergence.
What SGI Reports Instead
Time Horizon
80/100
Decision Range
75/100
Resistance to Change
85/100
Power Aware Design
40/100
Power Aware Design flags severe risk even though the other three dimensions are strong.
Use Cases
Where the index applies.
PE & Strategic M&A
Primary Use CaseDiligence before the deal, sitting alongside the financial, legal, and operational workstreams.
Lender Diligence
Assessing governance risk in a credit before it is extended.
Family Business Succession
Testing whether the business was built to outlast the founder currently running it.
Board Self Assessment
A candid look at a board's own capacity ahead of a leadership transition it can see coming.
Current Standing
Where the index stands today.
- 01
Formed as a Delaware C corporation, structured for QSBS eligibility under IRC Section 1202.
- 02
Full indicator framework built across all four dimensions; proprietary scoring architecture developed and held confidential.
- 03
SGI Lite specification complete: 24 core indicators across the four dimensions, run through a nine stage pilot workflow, now in build with the implementation team.
- 04
Early customer validation conversations underway with Wall Street contacts, following a structured validation discipline before outreach.
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.
Research library: View the white paper