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THE IMPORTANCE OF BOARD COMPOSITION AND COMMITTEE STRUCTURE: THE CASE OF POISON PILLS
Download This ArticleWallace N. Davidson III, Ted Pilger, Andrew Szakmary
Abstract
We examine board composition, characteristics, and structure for firms whose boards adopt poison pills. We find that board composition is unrelated to the stock market’s perception of poison pill adoption. However, the percentage of shares held by blockholders, the tenure of independent outsiders on the board, and the proportion of outsiders on the executive committee do seem to influence whether a poison pill adoption is perceived as management entrenching or not. We also find that when boards have absolute control of the sample firms, this control is related to board shareholdings, board tenure of outsiders, and the proportion of outsiders on the board committees. It is not related to the market reaction for poison pill adoption.
Keywords: Board Composition, Poison Pills, Management Entrenchment, Outsiders
How to cite this paper: Davidson III, W. N., Pilger, T., & Szakmary, A. (2004). The importance of board composition and committee structure: The case of poison pills. Corporate Ownership & Control, 1(3), 81-95. https://doi.org/10.22495/cocv1i3p8
