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Chinese management buyouts and board transformation

journal contribution
posted on 08.01.2016 by Yao Li, Mike Wright, Louise Scholes
We assess the extent to which Chinese MBOs of listed corporations enable a balance to be achieved between facilitating growth and supporting the interests of minority shareholders other than the buyout organization. Using novel, hand-collected data from 19 MBOs of listed corporations in China, a matched sample of 19 non-MBOs and the population of listed corporations, we examine the extent to which boards of directors are changed to bring in executive and outside directors with the skills to grow as well as restructure a business. We also examine the extent to which outside directors become involved in actions to develop the business rather than actions related to fostering the interests of all shareholders. We find in fact 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.

History

School

  • Loughborough University London

Published in

Journal of Business Ethics

Volume

95

Issue

S2

Pages

361 - 380

Citation

LI, Y., WRIGHT, M. and SCHOLES, L., 2010. Chinese management buyouts and board transformation. Journal of Business Ethics, 95 (S2), pp. 361 - 380.

Publisher

© Springer

Version

VoR (Version of Record)

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

Publication date

2010

Notes

Closed access

ISSN

0167-4544

eISSN

1573-0697

Language

en

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Categories

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