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Governance, CEO Power, and Acquisitions

41 Pages Posted: 22 Jun 2007 Last revised: 18 Sep 2009

Derek Oler

Texas Tech University - Rawls College of Business

Bradley Olson

University of Lethbridge - Faculty of Management

Christopher J. Skousen

Utah State University - School of Accountancy

Date Written: September 14, 2009

Abstract

We examine whether governance matters for acquisitions. Acquisitions are frequently beneficial to the CEO of the acquiring firm, but can often be value-destructive to acquirer shareholders and other stakeholders such as employees. We find that corporate governance does not appear to influence whether a firm will become an acquirer after controlling for CEO power, but superior governance is associated with greater relatedness between the target and acquirer. We also find that the effect of CEO power on a firm’s acquisition activity varies according to the source of that power. Our results suggest that the relationships between governance, CEO power, and acquisition activity are complex.

Keywords: Governance, CEO Power, Acquisitions

JEL Classification: G34, L20, G24, G31, G32

Suggested Citation

Oler, Derek and Olson, Bradley and Skousen, Christopher J., Governance, CEO Power, and Acquisitions (September 14, 2009). Available at SSRN: https://ssrn.com/abstract=993855 or http://dx.doi.org/10.2139/ssrn.993855

Derek Oler (Contact Author)

Texas Tech University - Rawls College of Business ( email )

P.O. Box 42101
Lubbock, TX 79409
United States
806-834-2354 (Phone)
806-742-3182 (Fax)

Bradley Olson

University of Lethbridge - Faculty of Management ( email )

Department of Management
4401 University Drive
Lethbridge, Alberta TIK 3M4
Canada

Christopher J. Skousen

Utah State University - School of Accountancy ( email )

College of Business
Logan, UT 84322-3540
United States

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