The Fairness Committee and Internal Approval

What this video covers

• Why the fairness committee is internal to the investment bank, never a committee of the client's board, and how to eliminate answer choices that blur that line
• The four required elements of written procedures: selection process, member qualifications, balanced review, and valuation appropriateness
• Why "compensation review" is a fraudulent substitute for valuation appropriateness on the exam
• What balanced review actually requires: non-deal team personnel must participate, but the deal team is not banned from committee membership
• Who receives the fairness opinion presentation after internal approval: standard board for arm's length deals, special committee of independent directors for going-private and related-party transactions
• Why conflicted management on the full board necessitates bypassing them in favor of the special committee in going-private deals
• How conflicts confirmed during the internal fairness committee meeting flow into the written opinion letter and ultimately into the proxy or prospectus