TY - JOUR

T1 - Agency or steward

T2 - The target CEO in a hostile takeover : can a condemned agent be redeemed?

AU - Angwin, Duncan

AU - Stern, Philip

AU - Bradley, Sarah

PY - 2004/6

Y1 - 2004/6

N2 - 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.

AB - 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.

KW - Hostile Takeover

KW - Top managment retention

KW - Takeover tactics

KW - M&A negotiation process

U2 - 10.1016/j.lrp.2004.03.006

DO - 10.1016/j.lrp.2004.03.006

M3 - Journal article

VL - 37

SP - 239

EP - 257

JO - Long Range Planning

JF - Long Range Planning

SN - 0024-6301

IS - 3

ER -