Abstract Several theories have been proposed to explain how corporate boards are structured. This paper groups these theories into four hypotheses and tests them empirically. We utilize a unique panel dataset that tracks corporate board development from the time of a firm's IPO through 10 years later. The data support three distinct but mutually compatible hypotheses of board development: (i) board size and independence increase as firms grow in size and diversify over time; (ii) board independence is negatively related to the manager's influence and positively related to constraints on such influence; and (iii) board size reflects a trade-off between the firm-specific benefits of monitoring and the costs of such monitoring. The data do not support the view that boards are structured inefficiently or to facilitate managers' consumption of valuedecreasing private benefits. These results indicate that board structure does not result from a mechanical process that can easily be improved by uniform rules on board size and composition, but rather, reflects a dynamic process involving the particular and changing nature of the firm's competitive environment and managerial team.

This paper is a survey of the literature on boards of directors, with an emphasis on

This paper empirically investigates the determinants of firms ’ decisions where to incorporate. We find that states that offer stronger antitakeover protections are substantially more successful both in retaining in-state firms and in attracting out-ofstate incorporations. We estimate that, compared with adopting no antitakeover statutes, adopting all standard antitakeover statutes enabled the adopting states to more than double the percentage of local firms that incorporated in state (from 23 to 49 percent). Indeed, we find no evidence that the incorporation market has even penalized the three states that passed antitakeover statutes, which are widely viewed as detrimental to shareholders. We also find that there is commonly a big difference between a state’s ability to attract incorporations from firms located in and out of the state, and we investigate several possible explanations for this home-state advantage. I.

Corporate Governance and Equilar Inc. for providing a portion of the data used in this paper,

Using rich and accurate data from Oslo Stock Exchange firms, we find that corporate governance matters for economic performance, insider ownership matters the most, outside ownership concentration destroys market value, direct ownership is superior to indirect, and that performance decreases with increasing board size, leverage, dividend payout, and the fraction of non–voting shares. These results persist across a wide range of single–equation models, suggesting that governance mechanisms are independent and may be analyzed one by one rather than a bundle. In contrast, our findings depend on the performance measure used and on the choice of instruments in simultaneous equations. The lack of significant relationships in tests allowing for endogeneity may not reflect optimal governance, but rather an underdeveloped theory of how governance and performance interact.

Abstract This study investigates whether accrual quality, earnings persistence and earnings predictive ability are affected by the adequacy rather than the strength of corporate governance. Under the premise that firms that have consistently outperformed their industry counterparts in the past have less residual agency problem, we use past industry-adjusted performance as a measure of the adequacy of corporate governance in place. We use Gompers' index as a measure of the strength of corporate governance. We find that reporting/earnings quality -accrual quality, earnings persistence, and earnings predictability -is higher for firms that have consistently outperformed their industry counterparts in the past regardless of whether the corporate governance levels were strong or weak. We also find that reporting/earnings quality is higher for such firms after controlling for the strength of corporate governance. * We thank Ramji Balakrishnan, Jeff Chen, George Drymiotes, Gerald Lobo, Scott Whisenant, and participants at the 2008 Financial Accounting and Reporting Section Meetings, for many helpful discussions and suggestions. Electronic copy available at: http://ssrn.com/abstract=1014243 On the Association between Corporate Governance and Earnings Quality Abstract This study investigates whether accrual quality, earnings persistence and earnings predictive ability are affected by the adequacy rather than the strength of corporate governance. Under the premise that firms that have consistently outperformed their industry counterparts in the past have less residual agency problem, we use past industry-adjusted performance as a measure of the adequacy of corporate governance in place. We use Gompers' index as a measure of the strength of corporate governance. We find that reporting/earnings quality -accrual quality, earnings persistence, and earnings predictability -is higher for firms that have consistently outperformed their industry counterparts in the past regardless of whether the corporate governance levels were strong or weak. We also find that reporting/earnings quality is higher for such firms after controlling for the strength of corporate governance.

Link to publication Citation for published version (APA): Goergen, M., Manjon, M. C., & Renneboog, L. D. R. (2004). Recent Developments in German Corporate Governance. (CentER Discussion Paper; Vol. 2004-123). Tilburg: Finance. General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.? Users may download and print one copy of any publication from the public portal for the purpose of private study or research? You may not further distribute the material or use it for any profit-making activity or commercial gain? You may freely distribute the URL identifying the publication in the public portal Take down policy If you believe that this document breaches copyright, please contact us providing details, and we will remove access to the work immediately and investigate your claim. Download date: 18. mei. 2016

65,000 words in length, exclusive of tables, figures, appendices, references and footnotes. This thesis contains no material that has been accepted for the award of any other degree of diploma in any university or institution. To the best of my knowledge, this thesis contains no material previously published or written by another person, except where due reference has been given.

We study corporate philanthropy using an original database that includes firm-level data on dollar giving, giving priorities, governance, and managerial involvement in giving programs. In the context of an agency cost explanation for corporate giving, we find that: larger boards of directors are associated with significantly more cash giving and with the establishment of corporate foundations; consistent with effective monitoring by creditors, firms with higher debt-to-value ratios give less cash to charities and are less likely to establish foundations. The empirical work controls for corporate performance, industry effects, and for state efforts to regulate corporate behavior through both fiduciary responsibility laws and philanthropy laws. We also analyze variations in firm philanthropic priorities and in the governance structures of giving programs.

2005. [32] pages. Under contract SBAHQ-04-M-0136 Agency problems * arise when a corporate organization (the principal) employs a professional manager (the agent) and thereby separates the business owner(s) from control of the business. Most previous studies of such agency problems used data from publicly traded companies. Applying these study results to small owner-controlled business reveals two limitations. First, in most publicly traded companies, the largest shareholders seldom own more than 50 percent; therefore, the results may not be applicable to problems faced by smaller, family/owner-managed firms. Second, since control is not separate from ownership, these small firms should, by definition, have no agency problem. Family shareholders usually are less likely to expropriate bondholder wealth than other shareholders; family firms may also have incentive structures that result in fewer agency conflicts between equity and debt claimants. The author hypothesizes that agency problems suffered by larger firms are not statistically significant for smaller owner-manager or family-owned