Corporate Boards in OECD Countries: size, composition, functioning and effectiveness

Pablo De Andres, Valentin Azofra and Félix López-Iturriaga ()
Authors registered in the RePEc Author Service: Pablo de Andrés Alonso

Corporate Governance: An International Review, 2005, vol. 13, issue 2, 197-210

Abstract: In recent years, the debate about the efficiency of corporate governance mechanisms has focused on the activity of the corporate boards of directors. This paper analyses the effect of the size of the board, its composition and internal functioning on firm value in a sample of 450 non‐financial companies from ten countries in Western Europe and North America. The econometric method combines uniequational regression analysis with simultaneous equations in order to control for the possibility of board size and composition endogeneity. The results show a negative relationship between firm value and the size of the board of directors. This relation holds when we control for alternative definitions of firm size and for board composition, the board's internal functioning, country effect and industry effect. We find no significant relationship between the composition of the board and the value of the firm. These results are consistent with previous relevant papers and show that companies with oversized boards of directors have poorer performance both in countries where internal mechanisms of governance dominate and in countries where external mechanisms are predominant.

Date: 2005
References: View complete reference list from CitEc
Citations: View citations in EconPapers (103)

Downloads: (external link)
https://doi.org/10.1111/j.1467-8683.2005.00418.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:corgov:v:13:y:2005:i:2:p:197-210

Ordering information: This journal article can be ordered from
http://www.blackwell ... ref=0964-8410&site=1

Access Statistics for this article

Corporate Governance: An International Review is currently edited by William Judge

More articles in Corporate Governance: An International Review from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().