What Public Company Directors Should Know About Going Private

Abstract

In a panel moderated by the President of the New York Chapter of the National Association of Corporate Directors, a prominent M&A banker and a veteran independent director discuss the role of “special committees” in managing conflicts of interest faced by top management when faced with (or seeking) bids to take their companies private. Among the board's most important responsibilities are establishing and maintaining a competitive bidding process—one that is equally open to all potential buyers—while regulating the flow of information in such a way that the amount released is commensurate with the “seriousness” of the bid. In the end, the special committee must satisfy itself that its decision to sell—or not to sell—the company reflects the diverse preferences and risk profiles of its unaffiliated shareholders.