EconPapers    
Economics at your fingertips  
 

Corporate governance structure and strategic change: evidence from major acquisitions

Seung Hee Choi and Samuel H. Szewczyk

Managerial Finance, 2018, vol. 44, issue 2, 222-240

Abstract: Purpose - When major reallocations of the firm’s assets are necessary, a balance in the corporate governance structure favoring the CEO can be a necessary condition for planning and initiating major strategic moves. The purpose of this paper is to examine firms making major acquisitions to identify corporate governance elements that are particular to undertaking major strategic initiatives. Design/methodology/approach - The authors test the proposition that firms making major strategic acquisitions will exhibit a corporate governance structure that is different in a number of its governance elements from firms making other acquisition decisions. The authors categorize the elements of corporate governance structures into CEO characteristics, internal monitoring, external monitoring and CEO compensation. Findings - The authors find the propensity of acquiring firms to make major strategic acquisitions is abetted by the CEO’s attributes and compensation, by the structure of the audit committee and compensation committee, and by the firm’s prior financial performance. Originality/value - The analysis of firms making major acquisitions presents the corporate governance dynamics of an environment that is conducive to strategic risk taking.

Keywords: Corporate governance; Corporate finances; Corporate strategy; G30; G32; G34 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.emeraldinsight.com/10.1108/MF-05-2017-0 ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:mfipps:mf-05-2017-0169

Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://emeraldgroupp ... s/journals.htm?id=mf

Access Statistics for this article

Managerial Finance is currently edited by Professor Don T Johnson

More articles in Managerial Finance from Emerald Group Publishing
Bibliographic data for series maintained by Virginia Chapman ().

 
Page updated 2019-03-02
Handle: RePEc:eme:mfipps:mf-05-2017-0169