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Do females on boards affect acquisition outcomes and target selection: a replication and extension of Levi, Li and Zhang (2014)
Abstract
We replicate and extend the 2014 study by Levi, Li and Zhang in the Australian setting and examine whether female representation on corporate boards affects acquisition outcomes. Consistent with the original study, we find that bidders with female representation on their boards make fewer acquisitions and pay lower premiums, on average. We also document that bidders with female representation on their boards prefer to select target firms that also have female representation on their boards. These results are robust to propensity score matching and instrumental variable estimation.
... Acquisitions by firms with high managerial ability generated better abnormal returns at the announcement as well as better post-announcement abnormal returns than firms with low managerial ability did (Chen and Lin, 2018). Bachmann and Spiropoulos (2021) proposed that bidders with female board members preferred to target firms that also have female board representation. ...
The role of the CEO in an enterprise's management decisions renders their individual characteristics influential in decisions about mergers and acquisitions (M&As). Personal characteristics are based on many aspects, therefore, we provide a multi-angle insight into the personal characteristics of managers. Drawing on the upper echelons theory, we examine whether CEOs' proactive personality affects merger and acquisition decisions. The fuzzy-set qualitative comparative analysis (fsQCA) is performed using a sample of 64 listed firms in China for the period 2010–2019. There are three solutions for cross-industry mergers, and five for intra-industry mergers. The results suggest that: (a) proactive and overconfident CEOs are inclined toward cross-industry mergers; (b) non-proactive and low-educated CEOs are inclined toward intra-industry mergers; (c) emerging industry enterprises tend to choose intra-industry mergers; (d) overconfident CEOs are more likely to undertake cross-industry mergers in traditional industries.
Boards of directors play a central role in governing corporate strategic change. We systematically review corporate governance research on strategic change published over the past 40 years, differentiating between strategic change types and board characteristics. We identify three developments: a focus on specific strategic change types, board composition and structure, and North American listed firms as a dominant study context. Yet, our analysis of the literature shows that research on board governance of interrelated strategic changes, on different board roles and behaviour, and on the governance of strategic changes across different contexts remains underdeveloped. To address these research gaps, we suggest three future research avenues: (1) examining how boards govern interrelated changes in a strategic change portfolio and its evolution over time; (2) studying the mediating relationship between board governance (particularly different board roles and behaviour), strategic changes, and corresponding outcomes ; and (3) gaining a better understanding of the role of context in board governance of interrelated strategic changes. We contribute to corporate gov-ernance research by developing a framework that synthesizes extant research on the relationships between different board governance variables and strategic change types, highlights important research gaps, and outlines several future research directions to address these gaps. Our framework and literature overview serve as analytical tools to examine whether boards are well-designed and prepared to govern multiple and interrelated strategic changes.
This study examined the effects of organisational culture and leadership styles on job satisfaction and organisational commitment in samples of Hong Kong and Australian managers. Statistically significant differences between the two samples were found for measures of innovative and supportive organizational cultures, job satisfaction and organizational commitment, with the Australian sample having higher mean scores on all these variables. However, differences between the two samples for job satisfaction and commitment were removed after statistically controlling for organizational culture, leadership and respondents' demographic characteristics. For the combined samples, innovative and supportive cultures, and a consideration leadership style, had positive effects on both job satisfaction and commitment, with the effects of an innovative culture on satisfaction and commitment, and the effect of a consideration leadership style on commitment, being stronger in the Australian sample. Also, an “initiating Structure” leadership style had a negative effect on job satisfaction for the combined sample. Participants' level of education was found to have a slight negative effect on satisfaction, and a slight positive effect on commitment. National culture was found to moderate the effect of respondents' age on satisfaction, with the effect being more positive amongst Hong Kong managers.
The purpose of this article was to examine the following three questions: Are women’s leadership styles truly different from men’s? Are these styles less likely to be effective? Is the determination of women’s effectiveness as a leaders fact-based or a perception that has become a reality? Conclusions revealed: Question one: Yes, women’s leadership style is, at this point, different from men’s but men can learn from and adopt “women’s” style and use it effectively as well. In other words, effective leadership is not the exclusive domain of either gender and both can learn from the other. Question two: No, women’s styles are not at all likely to be less effective; in fact, they are more effective within the context of team-based, consensually driven organizational structures that are more prevalent in today’s world. Question three: The assessment that a woman’s leadership style is less effective than a man’s is not fact-based but rather driven, by socialization, to a perception that certainly persists. The inescapable reality is that, within the senior ranks of corporate north America (and elsewhere), women remain conspicuous by their absence.
Based on 173 acquisitions in the U.S. manufacturing industry, this study examines the impact of organizational differences between acquiring and acquired firms on post-acquisition performance. The findings indicate that differences in top management styles have a negative impact on performance in acquisitions characterized by both high and low levels of post-acquisition integration. However, no such relationship was observed between differences in the reward and evaluation systems and post-acquisition performance in either the high or low integration subgroups. Implications of the findings, along with directions for future research, have been discussed in the concluding section of this paper.
Skin hyperpigmentary disorders, commonly including melasma and post‐inflammatory hyperpigmentation, are frequent dermatologic problems with higher prevalence in people with darker Fitzpatrick skin type.1,2 The current gold standard treatment is triple combination cream containing hydroquinone, retinoid and topical steroids3 but concerns over its long‐term use including exogenous ochronosis, along with the lack of guidelines on the management of hyperpigmentary disorders, have contributed to the inconsistent practice amongst dermatologists.
We investigate whether powerful chief executive officers (CEOs) influence the conditions of their cash bonus contracts. Specifically, we examine (i) the association between CEO power and the proportion of ex ante cash bonus to base salary (bonus ratio), (ii) the association between CEO power and the relative use of non‐financial to financial targets in cash bonus contracts, and (iii) the performance consequences of incorporating non‐financial targets in cash bonus contracts. Results show that powerful CEOs are associated with greater ex ante bonus ratios and higher proportions of non‐financial performance targets compared to less powerful CEOs. Furthermore, the use of quantitative and CSR‐related non‐financial performance targets is positively associated with subsequent firm performance, and the use of undefined non‐financial performance targets is associated with negative subsequent firm performance. These results are robust to alternative econometric specifications and variable definitions. This article is protected by copyright. All rights reserved
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.
This paper examines the association between the presence of female directors on a corporate board and mergers and acquisitions (M&As). Using acquisition bids initiated by S&P 1500 firms during the period 1997-2009, we find that each ten percent of female directors on a board is associated with a reduction in the number of a company’s acquisition bids by 7.6 percent. Furthermore, using over 450 acquisition bids for which we have data on bidder and target firm characteristics and their boards, we find that each ten percent of female directors on a bidder board is associated with a reduction in the bid premium by 15.4 percent. We discuss possible interpretations of our findings.
We show that female directors have a significant impact on board inputs and firm outcomes. In a sample of US firms, we find that female directors have better attendance records than male directors, male directors have fewer attendance problems the more gender-diverse the board is, and women are more likely to join monitoring committees. These results suggest that gender-diverse boards allocate more effort to monitoring. Accordingly, we find that chief executive officer turnover is more sensitive to stock performance and directors receive more equity-based compensation in firms with more gender-diverse boards. However, the average effect of gender diversity on firm performance is negative. This negative effect is driven by companies with fewer takeover defenses. Our results suggest that mandating gender quotas for directors can reduce firm value for well-governed firms.
Although some argue that tokenism drives the selection of female directors, we show that they have a significant impact on measures of board effectiveness. In a large panel of data on publicly-traded firms from 1996-2003, we find that (1) the likelihood that a female director has attendance problems is 0.29 lower than for a male director, (2) male directors have fewer attendance problems the greater the fraction of female directors on the board, (3) firms with more diverse boards provide their directors with more payperformance incentives, and (4) firms with more diverse boards have more board meetings. We also show that the positive relationship between corporate performance measures and gender diversity documented by previous studies is not robust to attempts to address the endogeneity of diversity. Instead, the average effect of gender diversity on both market valuation and operating performance appears to be negative. This negative effect is driven by companies with greater shareholder rights. In firms with weaker shareholder rights, gender diversity has positive effects. Our results suggest that diverse boards are tougher monitors. Nevertheless, mandating gender quotas in the boardroom may not increase board effectiveness on average, but may reduce it for well-governed firms where additional monitoring is counterproductive.