An Exploration of Boards of Directors' Quality: The Development of an Index for Directors Attributes and the Relation with Firm Value and Performance

Corporate Board: Role, Duties & Composition, V. 7, I. 2, 2011

23 Pages Posted: 18 Jul 2012 Last revised: 7 Feb 2015

Date Written: October 12, 2009

Abstract

In an environment with poor quality of Corporate Governance Mechanisms, the quality of directors’ attributes might exert an important role to improve firm’s value and performance. I developed an index to explore the quality of Board of Directors based on Brazilian and international corporate governance codes to measure directors qualitative attributes. The sample consist in 24 Brazilian firms that traded at NYSE in the period over 1999-2006. The results show us that board of directors with high types of attributes can improve value measured individually and by the quality index. The main results indicate that firm value improved with high types of professionals, accountants seated in boards, directors with high level of education and that participated in executive training.

Keywords: Board of Directors’ Quality, Corporate Governance, Firm Value, Directors Qualitative Attributes

JEL Classification: G34, G30, M40, C33, G39, M41, M49

Suggested Citation

Almeida, Jose Elias Feres de, An Exploration of Boards of Directors' Quality: The Development of an Index for Directors Attributes and the Relation with Firm Value and Performance (October 12, 2009). Corporate Board: Role, Duties & Composition, V. 7, I. 2, 2011, Available at SSRN: https://ssrn.com/abstract=2111323

Jose Elias Feres de Almeida (Contact Author)

Federal University of Espirito Santo (UFES) ( email )

Av. Fernando Ferrari, n. 514, Goiabeiras
Centro de Ciências Jurídicas e Econômicas
Vitoria, Espírito Santo 29075-910
Brazil
+5527992248737 (Phone)

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