Board structure, mergers, and shareholder wealth: a study of the mutual fund industry

Tufano, Peter, Khorana, Ajay and Wedge, Lei (2006) Board structure, mergers, and shareholder wealth: a study of the mutual fund industry. Harvard Business School Working Paper.

WarningThere is a more recent version of this item available.

Abstract

We study mutual fund mergers between 1999 and 2001 to understand the role and effectiveness of fund boards. Some fund mergers—typically across-family mergers—benefit target shareholders but are costly to target fund directors. Such mergers are more likely when funds underperform and their boards have a larger percentage of independent trustees, suggesting that more-independent boards tolerate less underperformance before initiating across-family mergers. This effect is most pronounced when all of the fund's directors are independent, not the 75% level of independence required by the SEC. Higher-paid target fund boards are less likely to approve across-family mergers that cause substantial reductions in their compensation.

Item Type: Other Working Paper
Keywords: Mutual funds; Mergers; Governance
Date Deposited: 28 Oct 2011 09:25
Last Modified: 17 Sep 2018 15:53
URI: http://eureka.sbs.ox.ac.uk/id/eprint/942

Available Versions of this Item

Actions (login required)

Edit View Edit View