Face-to-Face Board Meetings and Board Effectiveness in M&A Decisions

Abstract

This study examines how board meeting formats, specifically face-to-face versus remote or hybrid, are associated with board decision outcomes in mergers and acquisitions (M&A). While prior research highlights the benefits of remote meetings, we provide new evidence on the underexplored role of face-to-face interaction in strategic board decisions. Drawing on a unique dataset of board meeting formats from Chinese A-share companies, we find that face-to-face board meetings are significantly associated with higher M&A completion rates and more positive market reactions at announcement. For completed deals, face-to-face meetings are correlated with stronger announcement returns and greater post-acquisition performance. By applying a Heckman two-step model, we address potential selection bias in meeting format and confirm the robustness of our results. Cross-sectional analyses further show that the observed associations are more pronounced in completed M&A transactions involving greater informational frictions due to geographically distant or unrelated targets. Overall, our findings underscore the importance of meeting format as a contextual factor in corporate governance, highlighting the value of face-to-face communication in complex strategic decision-making.

Keywords: Corporate Governance, Board Effectiveness, Board Meeting Formats, Face-to-Face Meetings