__smbhome.uscs.susx.ac.uk_tb263_Desktop_BJM_SMBO_accepted_14_Feb_18.pdf (1.09 MB)
Sustaining the buyout governance model: inside secondary management buyout boards
journal contribution
posted on 2023-06-09, 12:10 authored by Ranko JelicRanko Jelic, Dan Zhou, Mike WrightWe examine the impact of private equity (PE) directors and their human capital on operating performance in a unique hand collected sample of 200 secondary management buyouts (SMBOs) during 2000-2015. We show that PE directors’ human capital tends to play statistically and economically important role in performance. Financial (rather than operational) experience of PE directors in acquiring PE firms tends to have a substantial impact on post-SMBO profitability while high level business education is especially important in post-SMBO growth performance enhancement. Complementary expertise, provided by directors in buying and selling PE firms, plays an important role only in post-SMBO growth improvements. Overall, our results provide evidence that governance benefits of the buyout model tend not to be exhausted in the primary buyout stage but the effects in the secondary buyout phase depend on the nature of PE directors’ human capital resource, notably in respect of the balance between board monitoring and advisory roles. Our study therefore adds to growing evidence on how ownership and life-cycle nature of firms affect sustainability of boards fulfilling their roles. The results are robust to sample selection bias, different types of PE firms and different measures of human capital.
History
Publication status
- Published
File Version
- Accepted version
Journal
British Journal of ManagementISSN
1045-3172Publisher
WileyExternal DOI
Issue
1Volume
30Page range
30-52Department affiliated with
- Accounting and Finance Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2018-02-15First Open Access (FOA) Date
2021-01-30First Compliant Deposit (FCD) Date
2018-02-15Usage metrics
Categories
No categories selectedKeywords
Licence
Exports
RefWorks
BibTeX
Ref. manager
Endnote
DataCite
NLM
DC