The link between performance and changes in the size and stability of a firm's officers and directors

Richard Heaney*, Tony Naughton, Thanh Truong, Sinclair Davidson, Tim Fry, Michael McKenzie

*Corresponding author for this work

Research output: Contribution to journalArticle

3 Citations (Scopus)


If corporate governance works effectively, size and stability of the firm's officer/director group will be sensitive to firm performance. This should be most evident during periods of unusual firm performance and so we focus on a sample of 9817 firms drawn from 52 countries with 2001 performance measures and officer/director effects in the following 12-month period. Cross-sectional analysis indicates a positive relationship between prior period performance and changes in size and stability of the officer/director group. While the change in size relationship appears to be explained by the USA firms in the sample, the stability relationship is more broadly based. We also find that these results are sensitive to legal system with a firm's officer/director group showing greater sensitivity to past performance in common law countries.

Original languageEnglish
Pages (from-to)16-29
Number of pages14
JournalJournal of Multinational Financial Management
Issue number1
Publication statusPublished - Feb 2007



  • Corporate governance
  • Management group size
  • Management group stability
  • Performance

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