When a deal goes wrong, the first question is never “what happened?” but “who knew, and when?” In 2020, auditors of the German payments company Wirecard could not verify about EUR 1.9 billion in supposed cash balances, and the company collapsed into insolvency within days. The case became a lesson in what happens when records, approvals and oversight cannot be trusted. If you are a director, CFO, general counsel or deal lead, this article is for you. It explains what transparency and accountability mean in a transaction, where they usually break down, and the concrete practices that restore them: clear roles, documented decisions, controlled disclosure and verifiable records. It also shows how modern data rooms create the audit trail that boards, regulators and counterparties increasingly expect.
Transparency and Accountability: Two Sides of One Problem
The two words are often used together but do different jobs.
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Transparency means that relevant information is available, accurate and understandable to those entitled to see it: the board, shareholders, regulators, counterparties and advisers.
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Accountability means that specific people are responsible for decisions and outcomes, and that their actions can be reviewed afterwards.
Transparency without accountability produces piles of data nobody owns. Accountability without transparency produces responsibility for things people cannot see. A transaction needs both.
Why Transactions Are Especially Vulnerable
Deals compress months of analysis into weeks. Many parties are involved, information is partial, and incentives differ: sellers want the best price, buyers want certainty, and advisers are often paid on completion. Harvard Business Review has reported that 70 to 90 percent of acquisitions fail to meet expectations, and weak information and oversight are recurring contributors.
Where Transparency and Accountability Break Down
Common failure points include:
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Unclear decision rights. Nobody knows who can approve a price change, a disclosure or an exception.
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Scattered records. Documents live in inboxes and personal drives, so the full picture cannot be reconstructed.
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Selective information. Some directors or bidders see more than others without a reason.
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Verbal agreements. Important concessions are made in calls and never recorded.
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Conflicts of interest. Advisers, executives or board members benefit from the deal without disclosure.
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Version confusion. People negotiate from different drafts of the same agreement.
Each of these can be addressed with simple, deliberate practices.
Practice One: Define Roles and Decision Rights
Before the deal begins, document who does what.
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Name a deal lead with day-to-day authority and a single point of contact for each counterparty.
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Create a responsibility matrix (often called a RACI chart) showing who is responsible, accountable, consulted and informed for each workstream.
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Set approval thresholds. For example, any change to price, warranties or exclusivity requires board approval.
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Establish a transaction committee of independent directors where conflicts exist, such as management buy-outs.
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Record delegations in writing so authority can be demonstrated later.
Managing Conflicts of Interest
Ask every participant to declare relevant interests: shareholdings, advisory fees contingent on closing, family links or prior relationships with the counterparty. Record the declarations and decide how each conflict will be managed, whether by recusal, independent review or disclosure to shareholders.
Practice Two: Keep a Single, Controlled Record in Data Rooms
If information is scattered, it cannot be verified. Build one authoritative repository for the transaction.
What a Good Record Includes
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The index of all documents disclosed, with dates and versions
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Questions asked by counterparties and the approved answers
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Board papers, minutes and written resolutions
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Valuation reports and fairness opinions
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Correspondence summaries for key negotiations
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Records of who had access to what, and when
Why Data Rooms Help
Modern data rooms are built for exactly this purpose. They combine an indexed folder structure, permissions by user group, structured Q&A and detailed activity logs, so that every disclosure and access event is recorded automatically. For a board asked later to show that it acted with care, or for a seller facing a warranty claim, that log is evidence rather than recollection.
Practice Three: Disclose Fairly and Consistently
Fair disclosure protects both sides.
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Give all bidders the same core information. If one bidder receives an answer that materially affects value, share it with the others, subject to confidentiality.
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Stage sensitive information, releasing it only as parties commit, and record each release.
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Approve answers before release. A reviewer, often the deal lead or lawyer, checks each Q&A response for accuracy and consistency.
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Update and correct. If earlier information proves wrong, say so promptly and document the correction.
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Respect legal limits. Competition law restricts exchange of competitively sensitive information between rivals before completion, and listed companies must manage inside information under the EU Market Abuse Regulation.
Practice Four: Document Decisions and Reasons
Accountability depends on being able to show why a decision was made, not only what was decided.
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Record the options considered, key assumptions and advice received.
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Minute board discussions so they show challenge and independent thought.
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Keep copies of valuation models with version history.
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Note dissenting views.
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Link decisions to the information available at the time.
Directors in many jurisdictions owe duties of care and loyalty, and a well-documented process is the best protection if a decision is later questioned.
Practice Five: Use Independent Checks
Independent verification builds credibility.
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Commission vendor due diligence or an independent fairness opinion.
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Use external auditors or accountants to verify critical figures such as cash, debt and revenue.
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Engage an independent adviser to review related-party arrangements.
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Ask counsel to review disclosure processes, particularly in competitive auctions.
The Wirecard case shows why independent evidence matters: figures that cannot be confirmed with third parties, such as bank confirmations, should never be accepted on trust.
Practice Six: Control Access and Protect Information
Transparency does not mean open access to everyone. Controlled access is part of accountability, because it lets you show that information went only to authorised people.
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Apply least privilege: each person sees only what they need.
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Require multi-factor authentication for all users.
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Use view-only mode and watermarks for sensitive files.
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Review logs weekly during active diligence.
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Revoke access promptly when parties withdraw.
IBM’s 2024 Cost of a Data Breach report put the global average breach cost at USD 4.88 million, and Verizon’s 2024 report attributed 68 percent of breaches to a human element, so strong controls support both confidentiality and the integrity of the process.
Practice Seven: Report and Review
Visibility to oversight bodies should be built into the timetable.
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Give the board a regular dashboard: milestones, open issues, key risks and spend against budget.
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Report diligence findings in categories: deal-breakers, price adjustments and post-closing actions.
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Hold a pre-signing review confirming that approvals, conflicts declarations and disclosures are complete.
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After closing, carry out a post-transaction review comparing assumptions with results.
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Archive the record under agreed retention rules.
A Simple Quarterly Test
Ask: if a regulator or shareholder questioned this transaction in two years, could we reconstruct who decided what, on which information, and who saw which documents? If the answer is no, improve the record now.
Practice Eight: Build the Right Culture
Procedures fail without culture. Leaders should encourage people to raise concerns, reward early reporting of problems and avoid pressure that makes teams hide bad news. Brief everyone on confidentiality rules and reporting channels at kick-off. Make clear that accuracy matters more than speed or comfort.
Common Mistakes to Avoid
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Allowing decisions by informal agreement without records
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Giving one bidder privileged information without a reason
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Treating the data room as storage rather than as the official record
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Ignoring conflicts of interest because “everyone is professional”
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Failing to preserve logs and decision records after closing
Conclusion
Transparency and accountability in corporate transactions are built through ordinary disciplines: clear roles, one controlled record, fair disclosure, documented reasoning, independent checks, restricted access, regular reporting and a culture that values honesty. Technology helps, particularly where data rooms provide the permissions, Q&A and activity logs that turn good intentions into verifiable evidence. Start your next transaction by drawing the responsibility matrix and agreeing what the record must contain. The effort is modest, and it protects directors, sellers and buyers alike when someone later asks who knew what, and when.