Entrenchment (management)
- Entrenchment (management)
Entrenchment Management is referred to as a hypothesis for anti-takeover in the Corporate Business. This idea emerged in the 80s when several actions to hostile takeover a company were occurring and several companies started planning actions on how to protect themselves from being bought by a hostile takeover.
Entrenchment Management in Corporate Governance
Entrenchment Management and Corporate Governance go along on hand to hand, where according to the Corporate Governance is how the Entrenchment Management will occur.
Nowadays there are several articles and essays on how to accomplished a proper Entrenched Management without hurting the shareholders, yet not abuse of them, like when a board of directives is given the power to take the corporate decisions in certain matters where the corporate will be protected against hostile takeovers. Nonetheless this form of Corporate Governance may cause distinct reactions on the shares prices, this is why Entrenchment Management is not an easy concept to accomplish that along with Corporate Governance will take a lot of research and good management of the Corporates market, vision and mission.
References
* "Management Entrenchment, Corporate Governance and Accounting Arbitrage" by Allan Hodgson and Peta Stevenson-Clarke
* http://www.financeprofessor.com/governance/Corporate%20Governance.html
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