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The Impact of Board Changes on Shareholder Wealth: some UK evidence
Author(s) -
Fox Alan,
Opong Kwaku
Publication year - 1999
Publication title -
corporate governance: an international review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.866
H-Index - 85
eISSN - 1467-8683
pISSN - 0964-8410
DOI - 10.1111/1467-8683.00169
Subject(s) - shareholder , business , affect (linguistics) , accounting , on board , share price , monetary economics , demographic economics , corporate governance , economics , finance , psychology , communication , stock exchange , engineering , aerospace engineering
This paper examines the impact of the entry and exit of board of directors on the share price of United Kingdom listed firms. Unlike previous studies in the area, this study distinguishes between the different type of board changes. The results of the study suggest that changes in the composition of management boards affect shareholders wealth. Small but significant positive abnormal returns are experienced on the day of the announcement. The results also indicate that the informational effects of new appointments are perceived differently by the market from resignations from the management board.