The Impact on Dual Directors on Value Creation in Spinoffs

This paper examines the governance implications of dual directors on the value accrued from a corporate spinoff transaction. It is known that firms divest into independent spinoffs to create value for themselves and shareholders. However, we theorize that the governance presence of dual directors serving on both parent and spinoff board serve to contradict this value creating action. Through a study involving 135 publicly traded firms in the Fortune 500 between the years 1995 to 2016, we find support that highlight the contradicting effects of dual directors on value accrued from a spinoff transaction.