The Value Maximizing Board

Posted: 20 Sep 1998

See all articles by Robert H. Gertner

Robert H. Gertner

University of Chicago - Finance; National Bureau of Economic Research (NBER)

Steven N. Kaplan

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); University of Chicago - Polsky Center for Entrepreneurship

Multiple version iconThere are 2 versions of this paper

Date Written: December 1996

Abstract

This paper compares board and director characteristics of reverse leveraged buyout (LBO) firms controlled by LBO specialists to those of an industry- and size-matched comparison sample. We consider the boards of the reverse LBOs to be value-maximizing because of the strong incentives the LBO specialists have to structure those boards in a way that maximizes shareholder value. Relative to the comparison firms, we find that the boards of the reverse LBOs are smaller, control larger equity stakes, and meet less frequently. Relative to directors of the comparison firms, directors of the reverse LBOs are younger, have shorter tenures, are less likely to be women, and are at least as likely to serve on other boards.

Suggested Citation

Gertner, Robert H. and Kaplan, Steven Neil, The Value Maximizing Board (December 1996). Available at SSRN: https://ssrn.com/abstract=10563

Robert H. Gertner (Contact Author)

University of Chicago - Finance ( email )

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National Bureau of Economic Research (NBER)

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Steven Neil Kaplan

University of Chicago - Booth School of Business ( email )

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Chicago, IL 60637
United States
773-702-4513 (Phone)
773-702-0458 (Fax)

National Bureau of Economic Research (NBER)

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United States

European Corporate Governance Institute (ECGI) ( email )

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Belgium

University of Chicago - Polsky Center for Entrepreneurship

Chicago, IL 60637
United States

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