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Agency or steward:The target CEO in a hostile takeover : can a condemned agent be redeemed?

Angwin, Duncan and Stern, Philip and Bradley, Sarah (2004) Agency or steward:The target CEO in a hostile takeover : can a condemned agent be redeemed? Long Range Planning, 37 (3). pp. 239-257. ISSN 0024-6301

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Abstract

This article examines the differences, tensions and overlaps between agency and stewardship theories of corporate governance. The context is a hostile bid for Blue Circle Industries, a FTSE 100 company, and the focus is upon its Chief Executive Officer’s actions in response. CEOs occupy a position of pivotal importance during such takeover bids, and it is salient to examine their resultant motivations and payoffs. While agency theory suggests that CEOs may act in self-interested ways, diverging from the interests of shareholders, ongoing stewardship theory sees CEOs as fundamentally honest and caring about their company and shareholders’ interests. The hostile bid is an opportunity for the target CEO to fight at any cost, or to act in the best interests of stakeholders. In examining the target CEO’s actions, this article suggests there is more complexity than these two theories acknowledge and the relationship between them is not one of simple opposition. The article identifies a framework for making sense of CEO/stakeholder relationships, and highlights the importance to boards of understanding how CEOs manage differential stakeholder pressures over time.

Item Type: Article
Journal or Publication Title: Long Range Planning
Uncontrolled Keywords: Hostile Takeover ; Top managment retention ; Takeover tactics ; M&A negotiation process
Subjects:
Departments: Lancaster University Management School > Lancaster University Management School - Other > Centre for Strategic Management
ID Code: 76270
Deposited By: ep_importer_pure
Deposited On: 21 Oct 2015 15:06
Refereed?: Yes
Published?: Published
Last Modified: 21 Sep 2017 01:16
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/76270

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