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The Value-Maximizing Board

Posted: 9 Jun 1997  

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)

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.

JEL Classification: L29, M19

Suggested Citation

Gertner, Robert H. and Kaplan, Steven N., The Value-Maximizing Board (December 1996). Available at SSRN: https://ssrn.com/abstract=10975

Robert H. Gertner

University of Chicago - Finance ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Steven Neil Kaplan (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-4513 (Phone)
773-702-0458 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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