Governance mandates, outside directors, and acquirer performance

Jay Dahya, Andrey Golubov, Dimitris Petmezas and Nickolaos G. Travlos

Journal of Corporate Finance, 2019, vol. 59, issue C, 218-238

Abstract: We use hand-collected board data around the issuance of two distinct government-led board structure mandates in the U.K. to establish the effect of outside directors on acquirer performance. Increases in outside director representation are associated with better acquirer returns in deals involving listed targets, but not when the target is private. These results are consistent with greater outside director reputational exposure when publicity is high. While we do not advocate mandated board structures, our evidence suggests that the particular diktats we examine were associated with improved acquirer performance in public firm takeovers. We present corroborating evidence from the U.S. around a similar reform period.

Keywords: Board structures; Mergers; Corporate governance (search for similar items in EconPapers)
JEL-codes: G14 G34 G38 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:59:y:2019:i:c:p:218-238

DOI: 10.1016/j.jcorpfin.2016.11.005

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