Does good governance matter to institutional investors? Evidence from the enactment of corporate governance guidelines
David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
Learn more about PhilPapers
Journal of Business Ethics 65 (1):55 - 67 (2006)
Corporate governance guidelines are a mechanism that a firm can enact which should reduce agency costs and better align the interests of boards and the suppliers of capital. This study examines stock price reactions primarily attributable to institutional investors occurring when corporations announce the enactment of corporate governance guidelines. A final sample of 77 firms was derived from the first announcement of corporate governance guidelines exclusive to the SEC-EDGAR database. The results indicate that good governance does matter. Firms that announced the enactment of corporate governance guidelines experienced increased stock prices following the announcements. There was an immediate (days 1–4) reaction for firms that provided all or part of the guidelines’ substance; a delayed (days 8–10) reaction occurred for those firms that only referenced the guidelines’ enactment. Additionally, firms with either a potentially greater following or that had a previous history of acrimonious relations with stakeholders were rewarded by the announcement of the enactment of guidelines.
|Keywords||corporate governance guidelines institutional investors transparency|
|Categories||categorize this paper)|
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
|Through your library|
References found in this work BETA
No references found.
Citations of this work BETA
Francesco Perrini, Angeloantonio Russo, Antonio Tencati & Clodia Vurro (2011). Deconstructing the Relationship Between Corporate Social and Financial Performance. Journal of Business Ethics 102 (S1):59-76.
Karen L. Benson, Marion Hutchtnson & Ashwin Sriram (2011). Governance in the Australian Superannuation Industry. Journal of Business Ethics 99 (2):183 - 200.
Similar books and articles
Stephen Yan-Leung Cheung, J. Thomas Connelly & Piman Limpaphayom (unknown). Determinants of Corporate Disclosure and Transparency: Evidence From Hong Kong and Thailand. Philosophical Explorations:313-342.
Emmanuel Adegbite, Kenneth Amaeshi & Olufemi Amao (2012). The Politics of Shareholder Activism in Nigeria. Journal of Business Ethics 105 (3):389-402.
Olufemi Amao & Kenneth Amaeshi (2008). Galvanising Shareholder Activism: A Prerequisite for Effective Corporate Governance and Accountability in Nigeria. [REVIEW] Journal of Business Ethics 82 (1):119 - 130.
Krishna Reddy, Stuart Locke, Frank Scrimgeour & Abeyratna Gunasekarage (2008). Corporate Governance Practices of Small Cap Companies and Their Financial Performance: An Empirical Study in New Zealand. International Journal of Business Governance and Ethics 4 (1):51-78.
Jennifer Bremer & Nabil Elias (2007). Corporate Governance in Developing Economies the Case of Egypt. International Journal of Business Governance and Ethics 3 (4):430-445.
Flávio M. Rabelo & Flávio C. Vasconcelos (2002). Corporate Governance in Brazil. Journal of Business Ethics 37 (3):321 - 335.
Bryan W. Husted & Carlos Serrano (2002). Corporate Governance in Mexico. Journal of Business Ethics 37 (3):337 - 348.
G. J. Rossouw, A. van der Watt & D. P. Malan Rossouw (2002). Corporate Governance in South Africa. Journal of Business Ethics 37 (3):289 - 302.
Richard Leblanc (2007). Corporate Governance and Board Effectiveness 2. International Journal of Business Governance and Ethics 3 (2):106-112.
Viet Ha Hoang (2006). Securities Market and Corporate Governance of Privatised Firms. International Journal of Business Governance and Ethics 2 (s 3-4):254-279.
Added to index2009-01-28
Total downloads13 ( #120,462 of 1,101,076 )
Recent downloads (6 months)3 ( #115,886 of 1,101,076 )
How can I increase my downloads?