The influence of powerful non-executive Chairs in Mergers and acquisitions

Samir Ghannam, Zoltan P. Matolcsy, Helen Spiropoulos and Nathan Thai

Journal of Contemporary Accounting and Economics, 2019, vol. 15, issue 1, 87-104

Abstract: This paper examines the influence of the non-executive Chair of bidding firms on various takeover outcomes. We study this in the Australian context due to its unique institutional setting where only 5% of Chair and CEO roles are combined, compared to 60% in the U.S. Based on a sample of 316 acquisitions by ASX listed firms between 2004 and 2014, we find that firms with a powerful Chair pay lower bid premiums and are also less likely to revise the initial offer price. Furthermore, Chair power is found to have a positive association with the bidding firm’s market reaction to the takeover announcement. Our evidence is robust with respect to alternative tests and variable specifications.

Keywords: Chair; Power; M&As; Non-executive director; Board independence (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:15:y:2019:i:1:p:87-104

DOI: 10.1016/j.jcae.2018.12.003

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Journal of Contemporary Accounting and Economics is currently edited by Agnes C.S. Cheng, P. Clarkson, F.A. Gul, Zoltan Matolcsy, Dan Simunic and Ben Srinidhi

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