The Corporate Governance Program

Board composition and economic performance

This project examines how firm behavior relates to a wide range of externally observable board characteristics, such as the directors' equity stake, the board's independence of the CEO, board size, directors' tenure, other directorships (network), director age, employee directors, and gender mix. We also include controls, such as other governance mechanisms, firm risk, and firm size. This project will contribute by being among the very few studies to include board independence, network, and diversity as determinants of board behavior. Second, the richness of the data set allows for a test design which captures both the interactions between many different characteristics, their behavior over time, and a possible reverse causation between board characteristics and firm performance. Third, whereas most extant studies are from the US, our European setting reflects a quite different institutional environment.