Competition For Board Seats Following Stock-For-Stock Mergers


  • Wallace N. Davidson III,

  • Sameh Sakr,

  • Yixi Ning

  • We would like to express our thanks to William T. Moore (the executive editor), Neil Arthur of the University of Sydney (the reviewer), and to participants at a workshop at the University of Richmond for many comments. We also thank Adel Alkabone for programming assistance. All errors are the responsibility of the authors.


We examine the board structure of firms following stock-for-stock mergers. We find that former target inside (outside) directors are more likely to join the combined firm board when target insiders (outsiders) have a relatively strong position on the pre-merger target board. The relative size of the target firm, target firm profitability, and target blockholder ownership also influence whether target directors join the combined board. We conclude that competition for board seats on the combined board is won by target directors with greater bargaining positions.