ESG and Board-Shareholder Engagement in M&A

Board-Shareholder Dialogue: Policy Debate, Legal Constraints and Best Practices (Luca Enriques & Giovanni Strampelli eds., 2023, Cambridge University Press), Forthcoming

21 Pages Posted: 23 Dec 2022

See all articles by Afra Afsharipour

Afra Afsharipour

University of California, Davis - School of Law ; European Corporate Governance Institute (ECGI)

Date Written: December 13, 2022

Abstract

Corporate governance debates have undergone a fundamental shift, with environmental, social and governance (“ESG”) issues coming to the forefront of decision-making by boards, executives and shareholders. Across a spectrum of stakeholders, companies and their boards face pressure to incorporate ESG considerations into their business strategies, including strategies around merger and acquisition (“M&A”) transactions. This chapter addresses how the growth of ESG is poised to affect board and shareholder engagement in M&A. For boards evaluating M&A deals, ESG factors are emerging as critical to all aspects of dealmaking, including selection of targets and buyers, due diligence, governance and integration, and financing. The ESG pressures on M&A deals also influence corporate governance in M&A—implicating board strategy and oversight in M&A, as well as shareholder engagement in M&A. In an ideal world, ESG information can help enhance board and shareholder decision-making around M&A. Yet, whether ESG considerations are likely to do so remains uncertain.

Keywords: Shareholder Engagement, Corporate Governance, ESG, Board of Directors, Institutional Investors, Corporations, Mergers, Acquisitions, M&A, Takeovers

JEL Classification: G30, G34, G38, K22

Suggested Citation

Afsharipour, Afra, ESG and Board-Shareholder Engagement in M&A (December 13, 2022). Board-Shareholder Dialogue: Policy Debate, Legal Constraints and Best Practices (Luca Enriques & Giovanni Strampelli eds., 2023, Cambridge University Press), Forthcoming, Available at SSRN: https://ssrn.com/abstract=4301453 or http://dx.doi.org/10.2139/ssrn.4301453

Afra Afsharipour (Contact Author)

University of California, Davis - School of Law ( email )

Martin Luther King, Jr. Hall
Davis, CA CA 95616-5201
United States

HOME PAGE: http://law.ucdavis.edu/people/afra-afsharipour

European Corporate Governance Institute (ECGI) ( email )

Belgium

HOME PAGE: http://www.ecgi.global/users/afra-afsharipour

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