Private supervision

Does the presence of private equity professionals on the boards of big public firms serve any constructive purpose? Researcher Ugur Celikyurt found that among the companies sampled, at least a third had a PE director on board, and that their presence meant decreased spend on R&D, capex and investment in general in future. On the bright side, the firms were extremely selective with prospective M&As, especially side-stepping risky ones. Benefiting from the experience brought in by the PE directors, the boards were also able to create value for the firms.

Title: Private Equity Professionals on Public Firm Boards

Source: Social Science Research Network