Journal of Financial and Quantitative Analysis Vol. 60 No. 3 2025

Does CFO Board Membership Benefit Shareholders? The Case of Corporate Acquisitions

Zhong Chen¹; Zicheng Lei¹; Chunling Xia²

¹ King’s College London King’s Business School · ² Queen Mary University of London School of Business and Management

Abstract

We investigate whether chief financial officers (CFOs) serving on U.S. corporate boards benefit shareholders in M&A transactions. We find that acquisitions made by firms with CFOs on boards have significantly better acquirer announcement returns. This is due to the CFO director’s ability to select targets with better strategic and financial fit. CFO board membership can create shareholder value if there are effective governance regimes restraining managerial entrenchment and CFOs’ interests are closely aligned with those of shareholders through equity ownership. Furthermore, sitting on boards enables CFOs to secure more and cheaper financing for their acquisitions.

DOI

10.1017/s0022109024000061

Volume

60

Issue

3

Pages

1558-1585

Language

en

Sources

openalex crossref

Cite

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