An Empirical Investigation of the Relationship between Corporate Governance Mechanisms, CEO Characteristics and Listed Companies’ Performance

摘要

This paper examines the impact of corporate governance mechanisms and CEO characteristics on U.S. listed companies’ performance. The corporate governance mechanisms are: shareholdings of insiders, shareholdings of the institutional investors and mutual funds, board size and the number of independent directors in the board. We used as performance measures the following: Tobin’s Q, return on assets, return on equity, price to book value and price earnings ratio. Additionally, we considered the impact of CEOs characteristics on companies’ performance. These characteristics are: CEO status regarding the possibility of holding multiple functions, the CEO’s possibility of being the founder of the company that he manages, state of residence, age and tenure in CEO position. Also we controlled for firm size, firm age and gearing. Our findings suggest mixed results between corporate governance and firm performance.