Journal of Business Ethics

, Volume 16, Issue 15, pp 1651–1659

An Antitakeover Amendment for Stakeholders?


  • Nancy L. Meade
    • Department of AccountingPamplin College of Business
  • Robert M. Brown
    • Department of AccountingPamplin College of Business
  • Dana J. Johnson
    • Department of AccountingPamplin College of Business

DOI: 10.1023/A:1017916018955

Cite this article as:
Meade, N.L., Brown, R.M. & Johnson, D.J. Journal of Business Ethics (1997) 16: 1651. doi:10.1023/A:1017916018955


The non-financial effects (NFE) antitakeover amendment addresses the duties of company directors and management when faced with a possible takeover bid. The NFE amendment either permits or requires managers to consider the interests of the company's stakeholders during takeover bids. Other types of antitakeover devices have been viewed as protecting either stockholder or management interests. The NFE amendment would appear to protect a broad spectrum of interests including those of company employees, creditors, and the community in which the company operates. Positive market returns to the adoption of NFE amendments provide some evidence that investors approve. The percent of both management and institutional ownership are positively related to the market reaction to the NFE amendment adoption. To the extent that institutional ownership proxies for the broad spectrum of stakeholder interest, NFE devices, unlike some other amendments that have been studied, appear to be in the interests of more than a single interest group.

Copyright information

© Kluwer Academic Publishers 1997