Ownership and Board Structures in Publicly Traded Corporations

Abstract

We examine the equity ownership structure and board composition of a sample of 583 firms over the ten-year period 1983-1992. Our evidence suggests that a substantial fraction of firms exhibit large changes in ownership and board structure in any given year. These changes are correlated with one another and are not reversed in the subsequent three years. Ownership and board changes are strongly related to top executuve turnover, prior stock price performance, and corporate control threats, but only weakly related to changes in firm-specific determinants of ownership and board structure. Moreover, large ownership and board changes are typically preceded by economic shocks and followed by asset restructurings. These findings provide new insights into how ownership and board structures evolve in public corporations.

JEL Classification: G32, G34