ABSTRACT
This chapter challenges the widely held view, especially among economists, that corporate takeovers are generally beneficial. Corporate managers are no different than other individuals. Self-interest should be expected to dominate their decision-making. In addition to "takeover artists" and "entrenched managers", there is a third private sector force in battles for corporate control—the firms' own boards of directors. Unfortunately, many boards still view their prime task as supporting the management. The corporation's board of directors is elected to represent the shareholders. It is the responsibility of the board of the target firm to decide when an offer for the corporation's shares is sufficiently attractive to accept over the protestation of the existing management. The traditional view of the key role of corporate boards is to deal with the succession problem. Surely, cultivating, and selecting the firm's chief executive is a fundamental task.
