Corporate Governance in the Small Firm: Prescriptions for CEOS and Directors

Authors

  • Catherine M. Daily The Ohio State University
  • Dan R. Dalton Indiana University

Abstract

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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Published

1994-01-09

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Section

Articles