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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | When Do Boards of Directors Contribute to Shareholder Value in Firms Targeted for Acquisition? A Group Information-Processing Perspective |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Organization Science |
| Publisher | Institute for Operations Research and the Management Science |
| Geographical Reach | international |
| ISSN | 1047-7039 |
| Volume | 34 |
| Number | 5 |
| Page Range | 1759 - 1776 |
| Date | 2023 |
| Abstract Text | We draw on group information-processing theory to investigate how target boards of directors may contribute to target value capture during the private negotiations phase in acquisitions. We view target boards as information-processing groups and private negotiations as information-processing tasks. We argue that target board meeting frequency is associated with increased processing—gathering, sharing, and analyzing—of acquisition-related information, which improves target bargaining and, ultimately, target value capture. We further posit that this value-enhancing effect of target board meeting frequency is more pronounced when target board composition improves the ability of target boards to process acquisition-related information. Finally, we expect that meeting frequency is more consequential for target bargaining and value capture when acquisition complexity imposes high information-processing demands on the target boards during private negotiations. Empirical evidence from a sample of acquisitions of publicly listed firms in the United States offers support for our group information-processing perspective on board contribution to shareholder value in firms targeted for acquisition. |
| Official URL | https://pubsonline.informs.org/doi/full/10.1287/orsc.2022.1643 |
| Digital Object Identifier | 10.1287/orsc.2022.1643 |
| Other Identification Number | merlin-id:23492 |
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