Ownership Structure, Board Composition and Non-Hostile Take-Overs in the UK: An Empirical Analysis
42 Pages Posted: 2 Sep 2002
Date Written: August 14, 2002
Abstract
This paper analyses the board composition and ownership structures of a sample of companies that have been acquired by friendly take-over and those of a matching control sample that have not. We find significant governance differences between the friendly take-over targets and the control sample. Firms with the following characteristics were more likely to be acquired in a friendly take-over: they had the same person acting as CEO and chair, a higher proportion of non-executive directors, (as well as more independent, and recently appointed, non-executive directors), larger institutional shareholdings, higher executive director shareholdings and, more specifically, higher CEO shareholdings. These results are consistent with two agency-derived hypotheses, financial incentives and effective monitoring. We also find that targets exhibit lower growth potential but do not have worse accounting performance.
JEL Classification: G30, G34, G32, L20, L21
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Audit Committee, Board of Director Characteristics, and Earnings Management
By April Klein
-
Audit Committee, Board of Director Characteristics, and Earnings Management
By April Klein
-
Audit Committee Composition and Auditor Reporting
By Joseph V. Carcello and Terry L. Neal
-
Corporate Governance and Accounting Scandals
By Anup Agrawal and Sahiba Chadha
-
Audit Committee Characteristics and Auditor Reporting
By Joseph V. Carcello and Terry L. Neal
-
Earnings Management and Corporate Governance: The Roles of the Board and the Audit Committee
By Biao Xie, Wallace N. Davidson, ...
-
Restoring Trust after Fraud: Does Corporate Governance Matter?
-
Board Characteristics, Accounting Report Integrity, and the Cost of Debt
By Ronald C. Anderson, Sattar Mansi, ...
-
Does the Market Value Financial Expertise on Audit Committees of Boards of Directors?
By Mark L. Defond, Rebecca N. Hann, ...
-
Does the Market Value Financial Expertise on Audit Committees of Boards of Directors?
By Mark L. Defond, Rebecca N. Hann, ...