As global competition increasingly turns on technology, brand reputation, and specialised knowledge, a new study has found that corporate boards are pivotal in unlocking the full value of intangible assets, particularly during international expansion through acquisitions. Published in the Global Strategy Journal, the research by Xavier Martin of Tilburg University and Tao Han of emlyon business school examined 675 cross-border acquisitions by U.S. public companies to understand how intangible assets influence overseas performance and under what conditions their impact is maximised.

The study reveals that while firms with high levels of R&D and advertising intensity tend to experience stronger market reactions to foreign acquisitions, these benefits are significantly amplified when the board is structured for effective governance. “Intangible assets such as proprietary technologies and strong brands are central to global competitiveness,” said Professor Martin. “Yet they often lose some of their value when transferred across borders. Without the right strategic oversight at board level, companies risk leaving substantial gains unrealised.”

Using event-study methodology, the researchers focused on two key types of intangibles—technology, measured by R&D intensity, and marketing, measured by advertising intensity. Each acquisition was assessed across four dimensions of board effectiveness: independence (greater non-executive representation and separation of CEO and chair roles), expertise (directors with international management experience), bandwidth (fewer overcommitted directors serving on multiple boards), and motivation (higher director share ownership to align interests with shareholders).

The findings show that companies whose boards score highly across these measures enjoy greater abnormal stock returns following acquisition announcements, especially when deploying technology-intensive strategies abroad. Effective governance, the study suggests, equips firms to overcome the inherent challenges of internationalising intangible assets, including bridging information gaps, adapting to unfamiliar markets, and making informed disclosure and strategy decisions.

These insights are particularly timely in an era marked by fierce global competition for innovation leadership, notably in fast-moving sectors such as artificial intelligence. As firms devote increasing investment to intangibles, the ability of boards to provide oversight, expertise, and incentive alignment will be critical in turning those assets into sustained competitive advantage. For corporate leaders, investors, and policymakers, the message is clear: strong board governance is itself a strategic asset—one that can determine whether intangible investments abroad fulfil their potential.

More information: Xavier Martin et al, Board effectiveness and internalization benefits: Theory and evidence from value creation in cross-border acquisitions, Global Strategy Journal. DOI: 10.1002/gsj.1524

Journal information: Global Strategy Journal Provided by Strategic Management Society