Implications of CEO Structural And Ownership Powers, Board Ownership And Composition On The Markets Reaction To Antitakeover Charter Amendments

Abstract

This study analyzes how the CEOs structural and ownership powers, along with the board of directors ownership and composition influence the markets reaction to antitakeover charter amendments. We find conditional support for both the agency and stewardship theories, each being relevant depending on governance mechanisms. The market evaluates the potential effect of the amendments on the balance of power between the CEO and the board of directors, and whether there are any countervailing forces to assure shareholders rights are being protected.