Boardroom shuffles and Strategic moves: unraveling the link between board replacement and the decision to divest
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2024-06-26
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en
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Abstract
This study investigates the impact of board of director replacements on the decision to divest. The empirical analysis reveals that general board replacements do not significantly influence divestment decisions. However, the departure of individual board members is positively correlated with an increased probability of divestitures, especially within the same year as the departure. This suggests a temporal correlation but not necessarily causation, indicating that both events may be driven by an underlying factor. The findings emphasize the need to differentiate between overall board replacements and individual departures when evaluating their effects on corporate strategic divestitures. Despite limitations such as data constraints, the study provides valuable insights into the strategic implications of board composition changes. It suggests that while broad board replacements may have limited direct effects, individual director departures can significantly influence divestment strategies, highlighting their critical role in organizational decision-making.
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Faculteit der Managementwetenschappen