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- W2184156988 abstract "We extend the literature on boards of directors and corporate governance by studying the use of special committees of disinterested directors by target firms in the course of a takeover. Special committees provide a response to conflicts of interest but they potentially impede information flow between the target management and potential bidding firms. The use of a special committee is a voluntary choice that is not subject to federal mandates. Our analysis covers the postSarbanes Oxley the period of 2003-2007, in which all firms are required to conform to a new regulatory regime and is characterized by a high level buyout activity that can increase potential conflicts. Our results show that special committee use is positively related conflicts and negatively related to factors and situations where insider knowledge is particularly valuable. Moreover, the propensity to form a committee is negatively related to the board’s overall independence; hence special committees substitute for the monitoring not found in the overall board composition. Special committees, on average, are formed well in advance of the merger agreement, employ additional financial advisors, and are more likely to run an auction process. Collectively, provide the ability of boards to adapt to situational conflicts, which may help explain when independent directors matter for corporate governance." @default.
- W2184156988 created "2016-06-24" @default.
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- W2184156988 date "2012-01-01" @default.
- W2184156988 modified "2023-09-26" @default.
- W2184156988 title "Analyzing the Advising and Monitoring Roles of Corporate Boards: The Choice of Special Committees in Corporate Takeovers" @default.
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