In today’s briefing:
- Effectiveness of MBO Special Committee Is Linked to Effectiveness of Independent Directors
Effectiveness of MBO Special Committee Is Linked to Effectiveness of Independent Directors
- The key is whether the effectiveness of special committee can fairly guide MBO, but whether the independent outside directors are truly independent, properly informed, and skilled is an important assumption.
- Since companies with high foreign shareholdings generally have higher corporate governance practices, there are concerns about practices in MBO cases for many companies that do not have high foreign shareholdings.
- When a company whose “goal is IPO” conducts MBO when the stock price is lower than at IPO, there are concerns about whether the special committee will guide MBO fairly.
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