Independent Director Death and CEO Acquisitiveness: Build an Empire or Pursue a Quiet Life?

Strategic Management Journal, Forthcoming

23 Pages Posted: 22 Oct 2014 Last revised: 26 Feb 2016

See all articles by Wei Shi

Wei Shi

University of Miami; University of Miami - Department of Management

Robert Hoskisson

Rice University

Yan Zhang

Rice University - Jesse H. Jones Graduate School of Business

Date Written: November 17, 2014

Abstract

This study examines the relationship between an independent director’s death and CEO acquisitiveness. Using a sample of large U.S. public firms, we find that CEOs who have experienced an independent director’s death undertake fewer acquisitions in the post-director death period, in particular fewer large acquisitions. Our findings are consistent with the prediction of posttraumatic growth theory that mortality awareness can induce CEOs to reevaluate their life priorities and reduce the importance of extrinsic goals in their decision making. This study contributes to the strategic leadership literature by highlighting the influence of the death of CEOs’ social peers on CEOs’ strategic decisions.

Keywords: Strategic leadership; mergers and acquisitions; CEOs; board of directors; social peers

JEL Classification: G34

Suggested Citation

Shi, Wei and Shi, Wei and Hoskisson, Robert and Zhang, Yan Anthea, Independent Director Death and CEO Acquisitiveness: Build an Empire or Pursue a Quiet Life? (November 17, 2014). Strategic Management Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2512775 or http://dx.doi.org/10.2139/ssrn.2512775

Wei Shi (Contact Author)

University of Miami ( email )

FL FL
United States

University of Miami - Department of Management ( email )

United States

Robert Hoskisson

Rice University ( email )

6100 South Main Street
Houston, TX 77005-1892
United States

Yan Anthea Zhang

Rice University - Jesse H. Jones Graduate School of Business ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States

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