Co-opted boards and anti-takeover provisions in US firms: Do better financial outcomes and dynamic governance matter?
Article
Miah, MD, Hasan, R, Mollah, S et al. (2026). Co-opted boards and anti-takeover provisions in US firms: Do better financial outcomes and dynamic governance matter?
. Journal of Corporate Finance, 101 10.1016/j.jcorpfin.2026.103064
Miah, MD, Hasan, R, Mollah, S et al. (2026). Co-opted boards and anti-takeover provisions in US firms: Do better financial outcomes and dynamic governance matter?
. Journal of Corporate Finance, 101 10.1016/j.jcorpfin.2026.103064
This research examines the relationship between co-opted boards and firms' anti-takeover provisions (ATPs). Analyzing 5585 US firm-year observations for the period 2012–2022, we document a positive relationship between co-opted boards and ATPs. We further illustrate that the positive relationship is stronger in firms that exhibit subpar performance and compensate senior executives and directors more than the industry average. Furthermore, our research finds that good governance, board and executive gender diversity, gender equality, and board cultural diversity moderate the positive relationship between co-opted boards and ATPs. Our results remain robust across a battery of tests. The findings of this research have important implications for corporate boards and managers. The study contributes to the mainstream agency theory by demonstrating that co-opted boards exacerbate firms' agency problems by blocking the potential of external disciplinary mechanisms.
