Board Composition, Corporate Performance, and the Cadbury Committee Recommendation

CFA Digest ◽  
2008 ◽  
Vol 38 (2) ◽  
pp. 24-25
Author(s):  
Daniel J. Larocco
Keyword(s):  
Corporate Performance ◽  
Board Composition

scholarly journals Board Composition, Corporate Performance, and the Cadbury Committee Recommendation

2007 ◽  
Vol 42 (3) ◽  
pp. 535-564 ◽  
Author(s):  
Jay Dahya ◽  
John J. McConnell
Keyword(s):  
Stock Prices ◽  
Corporate Performance ◽  
Peer Group ◽  
Operating Performance ◽  
Board Composition ◽  
Outside Directors ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
The World

AbstractDuring the 1990s and beyond, countries around the world witnessed calls and/or mandates for more outside directors on publicly traded companies' boards even though extant studies find no significant correlation between outside directors and corporate performance. We examine the connection between changes in board composition and corporate performance in the U.K. over the interval 1989–1996, a period that surrounds publication of the Cadbury Report, which calls for at least three outside directors for publicly traded corporations. We find that companies that add directors to conform with this standard exhibit a significant improvement in operating performance both in absolute terms and relative to various peer group benchmarks. We also find a statistically significant increase in stock prices around announcements that outside directors were added in conformance with this recommendation. We do not endorse mandated board structures, but the evidence appears to be that such a mandate is associated with an improvement in performance in U.K. companies.

Does Diversity in The Boardroom Add Value to a Firm?

2018 ◽  
Vol 18 (5) ◽  
Keyword(s):  
Firm Performance ◽  
Panel Data ◽  
Firm Size ◽  
Significant Influence ◽  
Negative Influence ◽  
Positive Influence ◽  
Future Research ◽  
Board Composition ◽  
Board Diversity

This study examines whether board diversity affects firm performance. We investigate this study using panel data of a sample of S&P 500 firms during a 12 year period. After controlling for industry, firm size, and other board composition variables, we find that all three board diversity variables of interest – gender, ethnicity, and age have a significant influence on firm performance. While ethnicity and age have a positive influence on firm performance, it was found that gender has a negative influence. Implications for future research are discussed.

Corporate Performance Measurement

Controlling ◽  
2005 ◽  
Vol 17 (11) ◽  
pp. 645-652 ◽  
Author(s):  
Bernard Marr
Keyword(s):  
Performance Measurement ◽  
Corporate Performance
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