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The Composition of Semi‐Two‐Tier Corporate Boards and Firm Performance
Author(s) -
Rose Caspar
Publication year - 2005
Publication title -
corporate governance: an international review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.866
H-Index - 85
eISSN - 1467-8683
pISSN - 0964-8410
DOI - 10.1111/j.1467-8683.2005.00460.x
Subject(s) - corporate governance , accounting , shareholder , business , danish , composition (language) , sample (material) , finance , linguistics , philosophy , chemistry , chromatography
After the emergence of the Cadbury Report in 1992, several countries in the EU, including Denmark, issued their own guidelines of corporate governance. However, whether such recommendations benefit shareholders is a controversial question. This article presents an empirical analysis of financial performance and the composition of semi‐two‐tier boards using a unique sample of Danish listed firms. It is shown that board size, proportion of insiders and positions held by board members in other firms do not significantly impact performance. Only the average age of the board has a significantly negative impact on performance. Thus, it is argued that board structure only plays crucial role when a firm is in financial trouble or faces a major threat – not under normal circumstances.