TY - JOUR
T1 - Governance, CEO power, and acquisitions
AU - Oler, Derek
AU - Olson, Bradley
AU - Skousen, Christopher J.
PY - 2010
Y1 - 2010
N2 - 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.
AB - 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.
KW - Acquisitions
KW - CEO power
KW - Corporate governance
KW - Diversification
UR - http://www.scopus.com/inward/record.url?scp=84897130119&partnerID=8YFLogxK
U2 - 10.22495/cocv7i3c4p3
DO - 10.22495/cocv7i3c4p3
M3 - Article
AN - SCOPUS:84897130119
SN - 1727-9232
VL - 7
SP - 430
EP - 447
JO - Corporate Ownership and Control
JF - Corporate Ownership and Control
IS - 3 E
ER -