Staggered Boards, Corporate Opacity and Firm Value
57 Pages Posted: 10 Aug 2013 Last revised: 20 Apr 2014
Date Written: August 20, 2012
We explore the effect of corporate opacity on the relation between staggered boards and firm value. We find that through mitigating takeover pressure, staggered boards become increasingly beneficial to firm value as opacity increases. In addition, we document that staggered boards reduce value only in transparent firms. Additional tests indicate that, as opacity increases, staggered boards bear an increasingly positive relation to research and development and CEO pay-performance sensitivity. Taken together, these results suggest that corporate opacity affects the value impact of takeover protection.
Keywords: Staggered boards, Antitakeover provisions, Corporate opacity, Performance
JEL Classification: G3, K2
Suggested Citation: Suggested Citation