Research and articles


  • An encyclopaedia on boards

    Adams (2017): “Boards, and the Directors Who Sit On Them
    Handbook of the Economics of Corporate Governance, Volume 1

    • What do directors do? What is the relative importance of CEO hiring firing, approving acquisitions, strategic advice?
    • How are boards structured? How have structures evolved over time, and how do they differ between the US and the rest of the world?
    • What is the relationship between firm value and board size, board independence, staggered boards, and other characteristics?
    • How do boards actually work? What is the role of subcommittees, and who sets the agenda?
    • How does regulation affect board structure?
    • What characteristics make for good directors?
  • Board independence

    Weisbach (1988): “Outside Directors and CEO Turnover
    Journal of Financial Economics

    • When a board has more independent directors, a CEO is more likely to depart after poor performance
    • ­ ­
  • Board size

    Yermack (1996): “Higher Market Valuation of Companies With a Small Board of Directors
    Journal of Financial Economics

    • When a board is smaller, a company has a higher valuation, its CEO’s pay is more sensitive to performance, and its CEO is more likely to depart after poor performance ­
  • Does one board structure fit all?

    Coles, Daniel, and Naveen (2008): “Boards: Does One Size Fit All?
    Journal of Financial Economics

    • There is no universally optimal board structure – one size doesn’t fit all
    • Larger boards can be associated with higher company valuation – if the firm is complex (i.e. is diversified, large, and relies on debt financing) and the board size arises from a greater number of independent directors
    • Inside directors can be associated with higher company valuation – if the firm is R&D-intensive, as then firm-specific knowledge is more important
  • Overboarding / busy boards

    Fich and Shivdasani (2006): “Are Busy Boards Effective Monitors?
    Journal of Finance

    • When a board is busy (most outside directors have at least three directorships), a company has lower valuation and is less profitable, and a CEO is less likely to depart after poor performance
    • Independent directors are only valuable if they are not busy
    • When a busy director departs, a company’s stock price goes up. If a director of firm A takes a board appointment at another firm B, firm A’s stock price falls
  • Co-opted boards (directors appointed after the CEO assumed office)

    Coles, Daniel, and Naveen (2014): “Co-opted Boards
    Review of Financial Studies

    • Studies “co-opted” directors, who were appointed after the CEO assumed office The idea is that they are beholden to the CEO for their appointment and thus less likely to monitor him/her
    • When a board has more co-opted directors, a CEO is less likely to depart after poor performance. The CEO’s pay is higher, but not more sensitive to performance
    • The fraction of “independent and non-co-opted” directors is a better measure of board independence than the fraction of independent directors
  • Board diversity

    Ahern and Dittmar (2012): “The Changing of the Boards: The Impact On Firm Valuation of Mandated Female Board Representation
    Quarterly Journal of Economics

    • Studies the 2003 Norwegian law that required boards to have a minimum of 40% of female directors
    • The law caused stock prices to fall immediately, and long-term valuations to decline. It also led to experienced boards, higher leverage, more acquisitions, and lower profitability
    • To show causation rather than just correlation, the results compare “treated” firms (that had no female directors before the law, and so were more affected by it) to “control” firms (who already had female directors)


  • Does Gender Diversity on Boards Really Boost Company Performance? (Katherine Klein)
    - ­ Non-technical summary of the findings of hundreds of studies on the link between diversity and firm performance
  • Response to the UK Corporate Governance Code consultation (Alex Edmans)
    ­- ­ Highlights the basic flaws in frequently-quoted evidence that diversity improves firm performance, but argues that diversity is desirable even if without such evidence
  • Workers on boards: momentum builds, but the jury's out (Tom Gosling)
    - There’s causal evidence that employee directors lead to worker jobs being protected in a downturn, and worker wages falling to compensate for this insurance
    - Despite lower wages, there is no effect on firm performance
    - The mixed evidence suggests that the value of workers on boards is situation-specific – they are neither universally harmful nor universally beneficial