Purpose

Board faultlines, which reflect intrinsic divisions of board members into relatively homogeneous subgroups, are associated with poor firm performance. This paper aims to extend the existing board faultline research by examining how acquisition deal size moderates the negative implications of board faultlines.

Design/methodology/approach

This paper uses a sample of acquisitions and a quantitative research approach to conduct statistical analysis.

Findings

Using a sample of acquisitions announced between 2007 and 2016, this paper finds evidence suggesting that strong faultlines are associated with poorer acquisition outcomes in the long-term, but not in the short term. Further, this paper finds that the effect of faultline strength on long-term acquisition outcomes is weaker for larger acquisition deals than smaller acquisition deals. The findings are consistent with deal size moderating the relation between faultlines and acquisition outcomes.

Research limitations/implications

This paper addresses possible endogeneity through firm fixed effects and instrumental variable analysis. Although this paper provides evidence on the moderating role of deal size in the context of faultlines, future research could examine the role of additional moderators, such as pro-diversity, trust, board leadership and board and task characteristics.

Practical implications

The findings suggest that boards need to be aware of situations where the negative effects of faultlines are more likely to come to the fore. For example, faultlines are more likely to play a role in more routine, obscure monitoring than for high-profile strategic decisions.

Originality/value

The study is multidisciplinary as it draws on the management, organizational behaviour and psychology and finance literature. It contributes to the developing literature on faultlines in several important ways. First, this paper supports their view that faultlines have adverse effects on board performance by showing that faultlines negatively impact discrete strategic investment decisions. Second, this paper provides evidence that deals size moderates the faultline-acquisition performance relation, indicating that the role of faultlines is contextual. Third, this paper finds evidence that suggests investors do not factor in board faultlines when responding to acquisition announcements.

中文翻译：

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交易规模能否缓和董事会断层线的影响？收购证据

目的

董事会断层线反映了董事会成员内在划分为相对同质的子群体，与糟糕的公司业绩有关。本文旨在通过研究收购交易规模如何调节董事会断层线的负面影响来扩展现有的董事会断层线研究。

设计/方法/方法

本文采用收购样本和定量研究方法进行统计分析。

发现

本文使用 2007 年至 2016 年间宣布的收购样本，发现证据表明强断层线与长期较差的收购结果相关，但在短期内则不然。此外，本文发现断层强度对长期收购结果的影响对于较大的收购交易比较小的收购交易要弱。调查结果与交易规模调节断层线与收购结果之间的关系一致。

研究限制/影响

本文通过坚定的固定效应和工具变量分析解决了可能的内生性。尽管本文提供了断层背景下交易规模调节作用的证据，但未来的研究可以检验其他调节因素的作用，例如支持多元化、信任、董事会领导以及董事会和任务特征。

实际影响

调查结果表明，董事会需要意识到断层线的负面影响更有可能出现的情况。例如，断层线更有可能在更常规、更模糊的监控中发挥作用，而不是在高调的战略决策中发挥作用。

原创性/价值

该研究是多学科的，因为它借鉴了管理、组织行为和心理学以及金融方面的文献。它在几个重要方面为关于断层线的文献的发展做出了贡献。首先，本文通过证明断层线对离散战略投资决策产生负面影响来支持他们的观点，即断层线对董事会绩效有不利影响。其次，本文提供的证据表明，交易规模可以调节断层线 - 获取性能关系，表明断层线的作用是上下文相关的。第三，本文发现的证据表明，投资者在回应收购公告时并未考虑董事会的断层线。