Suchergebnisse

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.

Chinese listed companies adopt a two‐tier board structure, a Board of Directors (BoD) and a Supervisory Board. They are also required to provide in their annual reports a supervisory board report (SBR). However, Congquin, a listed company, failed to issue a SBR in its 1998 annual report. This study specifically investigates the usefulness of the SBR by examining the stock market reaction to Congquin's SBR omission. The study also examines the Supervisory Board's reporting process and users' perceived usefulness of the SBR through interviews with directors, supervisory board members and senior executives of 16 listed companies. Discussions were also held with financial analysts, regulatory officials and academics. Our event study suggests that the absence of the SBR in Congquin's 1998 annual report caused a negative market reaction suggesting that investors had considered the SBR and the Supervisory Board important and were discouraged by the problems manifested by the absence of the SBR. Our interviews reveal that the usefulness of the SBR depends on the role that the Supervisory Board plays in corporate governance. If the Supervisory Board is an honoured guest, a friendly advisor, or a censored watchdog, it is unlikely that the SBR will convey much useful information. By contrast, if the Supervisory Board acts as an independent watchdog, then the SBR would be useful. Given the fact that the Supervisory Board in most of the companies that participated in the interviews fell into the first three categories, there remains a strong need to improve the usefulness of the SBR and strengthen the functioning of the Supervisory Board.