Corporate Governance in the Small Firm: Prescriptions for CEOS and Directors
Examinations of boards of directors of smaller corporations have been largely absent from the academic literature. This study addresses this void by examining several aspects of commonly prescribed board configurations for entrepreneurial (high growth) and small (stable growth ) corporations. Specifically, we address board composition and board leadership structure, as well as the impact of officer and director stock holdings and institutional holdings. Stepwise multiple regression analysis reveals that these governance variables significantly add to the explanation of financial performance for both sets of firms. The implications of these findings for Chief Executive Officers (CEOs) and boards of directors are discussed.
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