Abstract
We assess to what extent Chinese MBOs of listed corporations enable a balance to be achieved in terms of facilitating growth while maintaining the interests of other (minority) shareholders. Using novel, hand-collected data from 19 MBOs of listed corporations in China, we examine to what extent boards of directors are changed to bring in executive and outside directors with the skills to grow as well as restructure a business, and to what extent outside directors become involved in actions to develop the business versus actions relating to fostering the interests of all shareholders. We find little evidence that outside board members have the skills to add value to the MBO firms. Boards appear to focus mainly on related-party transactions with some more limited attention to growth strategies. Outside directors do not seem to openly disagree with incumbent managers on the disclosure of their actions but may express their views and exert pressure behind the scenes.
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Wright, M., Li, Y., Scholes, L. (2013). Management Buyouts and Board Transformation in China’s Transition Economy. In: Cressy, R., Cumming, D., Mallin, C. (eds) Entrepreneurship, Finance, Governance and Ethics. Advances in Business Ethics Research, vol 3. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-3867-6_17
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DOI: https://doi.org/10.1007/978-94-007-3867-6_17
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