CORPORATE GOVERNANCE AND INDEPENDENT DIRECTORS: MUCH ADO ABOUT NOTHING? THE EVIDENCE BEHIND PRIVATE EQUITY INVESTMENT PERFORMANCE

摘要

Recourse to independent directors by private equity investors is not tied to performance increases. We draw this conclusion from analyzing a unique data set representative of the European context: all deals made by Italian closed-end funds from 1999 to 2003. Our study shows,in fact,that corporate governance does not impact the rate of return on a deal. Performance,instead,is driven by the characteristics of an initiative (exit-way,holding period and shareholding). Further,we find that independent directors are involved in deals requiring greater skills and knowhow. They tend to resign when performance is unsatisfactory. Moreover,these professionals improve deal performance if their commitment with the management company lasts throughout the deal and if there is a continual turnover of these directors.