Abstract
We investigate the impact of board's quality as defined by a Score published in a Canadian National Newspaper on the performance of the firm. Based on the current literature, we ranked the boards of 219 Canadian firms in terms of four board characteristics: composition of the board, compensation of board members, shareholder rights, and disclosure. Then, we defined firm performance by using traditional accounting‐based measures such as ROI, ROE, EPS, and Market‐to‐book ratio and value creation‐based measures such as EVA(R) and MVA. To test the effects of board's quality on firm performance, we adopted different models of univariate and multivariate statistical analysis.Our results show no significant relationships between corporate governance and performance when using traditional performance measures, such as ROI, ROE, EPS and Market‐to‐book. However, they reveal significant links between board's quality and performance when the latter is captured by value performance measures, such as market value added and economic value added.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
