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Board composition, share ownership, and ‘underpricing’ of U.K. IPO firms
Author(s) -
Filatotchev Igor,
Bishop Kate
Publication year - 2002
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.269
Subject(s) - initial public offering , corporate governance , business , accounting , sample (material) , affect (linguistics) , power (physics) , ex ante , monetary economics , finance , economics , linguistics , chemistry , philosophy , physics , chromatography , quantum mechanics , macroeconomics
Using a sample of 251 IPOs in the United Kingdom, this paper examines interlinks between executive and nonexecutive characteristics, share ownership, and short‐term performance measured in terms of share offer ‘underpricing.’ It argues that executives' power and previous experience directly affect ex ante choice of nonexecutive directors and their ownership interests in the firm. These endogenously developed governance factors may be used by IPO teams strategically to reduce the extent of underpricing. However, there is a selective response of investors to different board characteristics and share ownership structure. Copyright © 2002 John Wiley & Sons, Ltd.