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The influence of powerful non-executive Chairs in Mergers and acquisitions

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  • Ghannam, Samir
  • Matolcsy, Zoltan P.
  • Spiropoulos, Helen
  • Thai, Nathan

Abstract

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.

Suggested Citation

  • Ghannam, Samir & Matolcsy, Zoltan P. & Spiropoulos, Helen & Thai, Nathan, 2019. "The influence of powerful non-executive Chairs in Mergers and acquisitions," Journal of Contemporary Accounting and Economics, Elsevier, vol. 15(1), pages 87-104.
    • Handle: RePEc:eee:jocaae:v:15:y:2019:i:1:p:87-104
    DOI: 10.1016/j.jcae.2018.12.003
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