Governance, CEO power, and acquisitions

Derek Oler, Bradley Olson, Christopher J. Skousen

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

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.

Original languageEnglish
Pages (from-to)430-447
Number of pages18
JournalCorporate Ownership and Control
Volume7
Issue number3 E
DOIs
StatePublished - 2010

Keywords

  • Acquisitions
  • CEO power
  • Corporate governance
  • Diversification

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