Board Composition and Corporate Performance: How the Australian Experience Informs Contrasting Theories of Corporate Governance

17 Pages Posted: 13 Dec 2003

See all articles by Geoffrey C. Kiel

Geoffrey C. Kiel

University of Notre Dame Australia - School of Business

Gavin J. Nicholson

Queensland University of Technology - QUT Business School

Abstract

In many respects, Australian boards more closely approach normative "best practice" guidelines for corporate governance than boards in other Western countries. Do Australian firms then demonstrate a board demographic-organisational performance link that has not been found in other economies? We examine the relationships between board demographics and corporate performance in 348 of Australia's largest publicly listed companies and describe the attributes of these firms and their boards. We find that, after controlling for firm size, board size is positively correlated with firm value. We also find a positive relationship between the proportion of inside directors and the market-based measure of firm performance. We discuss the implications of these findings and compare our findings to prevailing research in the US and the UK.

Suggested Citation

Kiel, Geoffrey C. and Nicholson, Gavin J., Board Composition and Corporate Performance: How the Australian Experience Informs Contrasting Theories of Corporate Governance. Corporate Governance: An International Review, Vol. 11, pp. 189-205, July 2003. Available at SSRN: https://ssrn.com/abstract=465516

Geoffrey C. Kiel (Contact Author)

University of Notre Dame Australia - School of Business ( email )

Mouat Street
Fremantle, WA 6959
Australia
+61 8 9433 0630 (Phone)
+61 8 9433 0640 (Fax)

Gavin J. Nicholson

Queensland University of Technology - QUT Business School ( email )

GPO Box 2434
Brisbane, Queensland 4001
Australia

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